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Streamlining third-party risk management with AI

Streamlining third-party risk management with AI

Streamlining third-party risk management with AI

Companies have been increasingly dependent on third parties year after year to reduce labor costs, improve efficiency, and focus on high value-added operations. However, the new privacy regulations require that we identify, address, and mitigate the risks that may arise from utilizing external third parties. As a result, it is no longer possible to ensure the safety of third parties with only basic contractual agreements and paper evaluations.
This report looks at third-party security based on the results of a recent roundtable session held by KPMG.
The roundtable session was attended by companies of various sizes, markets and industries. Each company's maturity in building third-party security programs varied, but a survey revealed common challenges such as:

Third Party Security Challenges

Cumbersome Processes
Third-party security efforts are a complex manual task due to various bottlenecks. For example, when requesting a security assessment item from a vendor, it is necessary to repeatedly work to get an answer so that the procurement of services and products will not be delayed. Because assessment questions vary from company to company, many vendors are dissatisfied with the limited number of questions that can be applied to the services they offer.

Disconnection between third-party security programs and procurement
Procurement operations and third-party security reviews are closely related, but the two groups have different reporting systems and different processes. If you do not have the time to contract with a vendor, the contract may be concluded without the involvement of a third-party security team. Some security clauses may be inadvertently deleted, which may interfere with the implementation of security controls. Duplicate vendor information from different departments within your organization can also increase the workload of third-party security teams and can be confusing.

Maintaining Consistency
Third-party security programs struggle to evaluate an ever-growing number of vendors. You must also comply with regulations that require vendors to reassess to collect the required data points. Also, as the number of documents required increases, it becomes more difficult to evaluate all vendors at the same level.

Introduction of artificial intelligence AI

Enterprises already have solutions and data to manage third-party security risks, but lack the ability to integrate multiple information systems and automate low-value tasks. The solution is an integrated artificial intelligence (AI) solution that can intelligently and proactively identify and address these challenges.
At the most basic level, let AI digital workers act as a front end to third-party security processes, answering simple questions posed by your internal business team. Anyone in the company can request a vendor deployment, and then an AI digital worker will check to see if the vendor already exists in the system.
With powerful AI capabilities and natural language understanding (NLU), digital workers can further simplify the procurement process by explaining what users want to ask vendors. The AI ​​system then forwards your input to a third-party security team for assessment by the security team. AI digital workers can also answer questions about contracts with vendors and issues found during the assessment process.
Going one step further, let the AI ​​digital worker interact with the vendor's window on your behalf. Advanced digital workers are "smart" enough to take advantage of previously identified issues to ask follow-up questions to vendor responses to assessments. Ultimately, assessment items can be tailor-made for each vendor.

Build an AI business case
The AI ​​digital worker business case needs to address both quantitative and qualitative factors. The overwhelming number of third parties and their associated data are challenges that are becoming increasingly difficult to tackle even in the most mature design of third party risk management programs. AI digital workers are huge in that they enable third-party programs to be more efficient, as well as process large amounts of data, generate insights, and shift focus to key risk areas rather than repetitive tasks. Provide value.
Creating AI business cases requires value propositions that focus on streamlining workflows, streamlining automation, reducing labor costs, reducing training and technology costs, and the return on investment in long-term third-party management. ..
In other words, by introducing AI digital workers as a third-party security measure, it is possible to reduce operating costs, more effectively reduce risks, and reduce labor costs. By freeing up time and resources, companies can refocus their efforts on keeping third-party security programs on the cutting edge.