Vendor Risk Management and Due Diligence
Operational disruptions have the potential to threaten the viability of firms causing instability to the products and services that they provide. The impact this can have to consumers and market participants is far reaching and wide as we have witnessed with the onset of the pandemic and other significant and notable market events affecting the financial system in recent years.
As we continue to work with firms in helping them prepare and respond to such unforeseen events we have provided you with an overview of Operational Resilience, Outsourcing and Third Party Risk Management and Identifying Important Business Services. Today, our Senior Director and Regulatory Compliance Lead, Lindsey Domingo at Xcina Consulting, highlights the importance of the requirements for firms to perform appropriate and proportionate due diligence on all potential service providers and to assess the risks of every outsourcing arrangement. We outlined the regulatory expectations and concept of materiality in our edition on Outsourcing and Third-Party Risk Management. But what is due diligence and how does it relate to risk management?
This week’s edition covers the following:
Risk assessment and due diligence are separate concepts, but they are interrelated and work together. Due diligence is a form of risk assessment.