Global third-party risk management survey 2021
Gaining ground: A digital path to third-party oversight
Our latest research shows that the pandemic has led many organizations to make digital advancements in their approach to third-party risk management (TPRM).
2021 key themes
Digital risks are a top emerging concern
Digital risks arising from increasingly digitized ways of working are a top emerging concern in third-party risk management. This is followed by financial resilience of third parties, and the ability to manage diversity and inclusion, health and safety, the environment, and climate change.
- 71% Digital risk
- 41% Financial resilience in real-time
- 40% Diversity and inclusion
- 38% Health and safety
- 37% Environment risk
- 36% Climate risk
Risk intelligence is a key funding priority
The pandemic highlighted the need for real-time intelligence on third parties. Our survey showed that more than half of organizations want to improve real-time information, risk metrics and reporting in the year ahead so they have a single, up-to-date picture of their third parties and the risk they may pose.
53% want to improve real-time information, risk metrics and reporting.
The pandemic was a wake-up call to improve third-party risk management
Many organizations were unprepared when COVID-19 became a global pandemic. Ten months on, almost half of our survey respondents still felt they were in ‘respond’ mode – they were still reacting to the need for business continuity and resilience throughout their supply chain, customer relationships and digital capabilities. We expected more organizations to have learnt from their experiences and used them to start to inform their TPRM capability by then. The pandemic has disrupted the TPRM maturity journey for many but it has been a wake-up call for organizations to invest in the year ahead.
- 45% were still in the respond phase
- 29% were in the recovery phase
- 26% were in the thrive phase
Cost pressures are preventing insourcing
COVID-19 led many organizations to consider taking outsourced business activities back in-house because they had concerns about third-party failure or losing control of outsourced activity. This idea largely didn’t progress as organizations feel too much pressure to save costs or lack internal capability to deliver the activities.
Pressure to save costs by outsourcing business activities:
- 50% Very high or high
- 36% Neutral
- 14% Low