Third-party risk management in the financial industry requires careful consideration when developing an operating model. It is essential to consider the regions and regulations that govern. In most of the banking industry, your internal risk culture allows you to easily implement a third-party risk program that methodically measures inherent risk, provides time to assess third party controls and negotiates contracts that enforce controls and mitigates residual risk.
Internal vs. Third-Party
The internal risk culture changes once you enter the world of capital markets where decisions are made quickly, risk is a way of life and patience is a rare quality. Now add the risk of a trade execution platform failing during a stock market dive and counterparties not having the ability to trade for several hours. The outage would be noticed and gain publicity, potentially causing Regulators to investigate. Should this occur and the necessary due diligence steps that would have highlighted this vulnerability were skipped, the repercussions could be costly. Your firm's reputation would be at stake and you most likely will face regulatory scrutiny that could result in fines. Striking a balance between satisfying your firm's need to generate revenue and mitigate third-party risk is an interesting challenge. If your operating model is too slow and cumbersome, your business will most likely attempt to circumvent the process. Careful consideration needs to be taken when aligning your control assessments to the true inherent risk.
SIG University Certified Sourcing Professional (CSP) program graduate Diane Bradley discusses how CSP modules on vendor relations and category management improved her vendor management and negotiation skills.
I would like to start my essay by saying "thank you." BNY Mellon has invested in its employees and is providing us with this training. I feel that is something that should be recognized, and I do appreciate the opportunity to expand my knowledge, which will ultimately increase my value with the bank. With that said, the SIG University training has provided me with a lot of valuable information and has also given me guidance, which I have started applying in my day-to-day activities
I feel the units focusing on vendor relations have been extremely helpful. As I continue to negotiate more and more contracts, I have reminded myself to go into the call with my goals established and I have them written down in bullet points, so they are easy to refer to while on calls. I have also made sure to have internal calls with the stakeholders prior to reaching out to the vendor. So when the call is conducted, I am confident that we are on the same page and present a consistent and concise dialogue. I feel this preparation has given me confidence, and I strongly feel that it is represented in the call. I am also very focused on the partnership that we are building with our vendors. I realize I am an essential aspect of the partnership. My dealings with the vendor will make a significant impact on the success or failure of the relationship.
SIG University Certified Sourcing Professional (CSP) program graduate Angelica Gardner discusses how CSP modules on internal spend analysis and contract negotiation planning improved her approach to identifying cost efficiencies as a procurement buyer.
As everyone is aware, the COVID-19 pandemic has affected a large portion of the economy’s growth ability, especially in the automotive industry, with declining sales of more than 40%. Companies are having to develop strategic ways to cut costs and provide cost-saving solutions. As a buyer in the manufacturing plant, my responsibility is to identify these cost efficiencies.
To accomplish this task, SIG University's CSP program helped me recognize two areas to improve: internal spend analysis and contract negotiation planning. These areas are complementary skills that have helped me improve my approach these types of situations in the future as a procurement buyer.
INTERNAL SPEND ANALYSIS
As a new procurement agent, having followed industry market trends, company earnings and announcing changes within the organization has given me a leg up in my negotiation strategies. Assessing the environment is vital to understanding business requirements, the company’s vision and our department’s functional goals during this critical time.
In one particular situation, management did not agree with a supplier’s new budget proposal and wanted to reduce cost by an overall savings of $86,000. The lesson teaches us to gather as much data required and perform a spend analysis to determine leverage. After completing a spend analysis from the previous year, we discovered the total spend was consistent with what was done in the past.
Certified Professional Accountants (CPAs) who are looking to earn Continuing Professional Education (CPE) credits to maintain their licenses can improve their knowledge in third-party risk management by enrolling in SIG University’s Certified Third Party Risk Management Professional (C3PRMP) program.
SIG was recently approved by the National Association of State Boards of Accountancy (NASBA) as a CEP sponsor. The National Registry of CPE Sponsors recognizes and highlights CPE sponsors that provide CPE programs in accordance with nationally recognized standards.
CPA and equivalent designations who enroll in the CPE-track of SIG University’s Certified Third Party Risk Management Professional (C3PRMP) program will receive 66 CPE credits and graduate with a strong knowledge base of third-party risk management best practices that can be implemented immediately.
CPAs are in possession of highly sensitive client data that cybercriminals and other bad actors could exploit. This program touches on all areas of operational risk, including cyber, business resilience, financial, technology and reputational risk. Anyone who is serious about investing in their team and protecting the wider enterprise will benefit from the program’s focus on governance and oversight best practices, controls and board reporting with a view from the top.
Outlined here is information about the upcoming changes and benefits of your C3PRMP designation, as well as a profile of our students.
What is different about SIG University’s C3PRMP program in 2020?
In January, the duration of SIG University's C3PRMP program was extended from eight weeks to 10 weeks. Multiple-choice review questions at the end of each module will test all students’ knowledge and require a minimum passing score of 80%.
Members of the Global Association of Risk Professionals (GARP) will continue to earn 20 Continuing Professional Development (CPD) credits, GARP’s highest award for a continuing professional development program.
I recently went back to read an article that I bookmarked a while back on the predictions for 2020. Forget self-driving cars and flying cars; Popular Mechanics magazine predicted in 1951 that every family in the 21st century would have at least one helicopter in their garage. They also predicted in 1957 that every road and street would be “replaced by a network of pneumatic tubes,” and your car would only need enough power to get from your home to the newest tube.
Dave Evans, the chief futurist for Cisco Visual Networking, actually predicted in 2012 that he'd be out of a job by this time because, as he forecasted, everyone would be able to predict the future themselves.
Automating Everyday Tasks
I wasn’t alive when Popular Mechanics made its predictions, but I was alive for the statement by Dave Evans. What I know for sure is that while his prediction for companies to make data-informed decisions is slowly coming to fruition, we are far off from a world without futurists. What amazes me is that most automation predictions were in the form of self-driving cars rather than taking place in everyday life.
SIG University Certified Sourcing Professional (CSP)program student Kimberly Morelli works at Driven Brands. She shares how essential components such as soft skills and change management can be and how she is implementing newly polished tools and best practices to tackle organizational challenges.
In the CSP program, students focus on the hard and soft skills of sourcing, including strategic sourcing and outsourcing methodologies, as well as best practices in negotiations.
My enrollment in the CSP Program from SIG University has proven to be timely and I am excited at the opportunity to have lessons that can be readily applied to our procurement organization. I also was heartened to find emphasis by SIG on positive supplier relationships versus an adversarial stance as used to be popular. The procurement team I am on has been in a state of transformation over the past few years, shifting from transactional buying to category management with a specific focus on increasing our sourcing processes. I found the CSP program to have laid a strong framework that is applicable to my organization, both in procurement and business areas.
SIG University Certified Intelligent Automation Professional (CIAP) Program graduate Mike Morsch has led an RPA and IA journey before. He discusses the steps a company must address to ensure a successful Intelligent Automation journey to produce the best long term and sustainable outcomes.
In the CIAP program, students gain knowledge of automation technologies, learn how to identify the correct opportunities to build, run and sustain a successful automation program, and will understand the true potential of IPA technologies when adopted correctly.
I found the CIAP certification training to be an excellent baseline for anybody looking to embark on an intelligent automation (IA) journey. Senior leaders looking to sponsor a program really need to think through how they can best start the program to ensure both leadership and associates understand the focus of the program. It is easy to get caught up in “cost savings” and getting fast and visible results to justify a program. While quick wins are always a good way to show the value of any initiative, the long term benefits available in taking a broader view will pay the most dividends on investment over time. In thinking about my own experience and the lessons learned in the CIAP program, I would suggest to anyone considering IA the following areas of focus to create the best program.
SIG University’s Certified Intelligent Automation Professional (CIAP) program is an online certification program for working professionals who seek to become more efficient and free up team resources by automating repetitive, rules-based activities. An investment in the CIAP designation will provide your team with a holistic understanding of Intelligent Process Automation technologies so they can focus on more strategic business objectives.
Outlined here is more information on the benefits of a CIAP designation, as well as a profile of who would benefit from the program.
What is Intelligent Process Automation?
Intelligent Process Automation (IPA) is an evolving set of software technologies that can be used singly or in combination to automate repetitive, rules-based routine tasks. The Intelligent Process Automation technologies are broadly categorized as:
Robotic Process Automation – Handles repeatable, routine and predictable tasks
Cognitive technologies – Have the ability to be trained to read variable inputs and determine what actions to take under different circumstances.
Workflow orchestration – Manages work between different IPA technologies, legacy systems and human workers.
Virtual agents – Use voice or text chat for direct interaction with users.
The key to true Intelligent Process Automation is how to combine the above-mentioned tools to solve end-to-end business problems.
In highly regulated industries, there are seemingly endless regulatory and compliance requirements and activities, and they often are inseparable from the underlying risk management activities themselves, including those for third parties.
Since the 2008 financial crisis, the U.S. has arguably become the most complex and costly jurisdiction for regulatory compliance. An article published by World Economic Forum on enterprise risk management points out that banks are “less experienced with non-traditional threats such as cyber risk, strategic risk, operational risk, regulatory risk and legal risk. Making matters trickier, these risks aren’t easily quantified.” The authors also note that “the growth in such risks is virtually unprecedented in the history of banking. This puts a premium on firms’ abilities to make connections and to recognize the complex whole is far greater than the sum of its parts.”
The financial services sector leads the pack in terms of the amount of regulation it is subject to, including the compliance challenges, regulations and laws in near and far-flung jurisdictions, as well as the cost and complexity of compliance, risk management and governance practices. This sector is not alone is the endless struggle to balance costs and compliance. Healthcare, oil and gas, and the tech sector are also struggling with the cost and complexity to managing sector-specific risks and compliance.