Modern businesses are increasingly dependent on third-parties who are geographically dispersed across the globe. And while ongoing risk monitoring with periodic assessments can go a long way in safeguarding data, it might not cover the entire spectrum of potential geographic events that could suddenly disrupt and affect business operations. Here’s why you should start thinking about continuous location risk monitoring.
When talking about third party assessments, we usually refer to periodic assessments of risk parameters such as inherent risk, financial health and cyber risk. These are key parameters to any third-party risk management (TPRM) program, but they can’t mitigate business disruption risks caused by sudden geographical issues, like natural disasters or political unrest.
Even if a company were to increase the frequency of point-in-time assessments, that can’t fully protect it from events that happen in real-time.
Ongoing Versus Real-Time Location Risk Monitoring
Ongoing or continuous risk monitoring consists of performing periodic assessments based on a methodology. They have a certain number of questions, sometimes standardized according to the industry or some regulatory guidelines. Organizations go through these questionnaires and validations on a periodic basis, say once a year, or at the beginning of any new third-party relationship.
However, while that is a good exercise, the risks related to location should be monitored on a real-time basis. Things can change in a second due to natural disasters, political crisis and other location-related events, so the need for real-time location risk monitoring becomes evident. Otherwise, if you assess on an annual basis, how can you guarantee that you will be OK for the remaining 364 days of the year?
Location Risk Monitoring At A Glance
Our ThirdPartyTrust platform shows these sorts of insights at a glance in the main dashboard, so you can detect critical location risks and geopolitical developments that might be risky to the business operation and remediate the risks associated with them.
We’re able to show this information through our integration with Supply Wisdom, who provides real-time and continuous risk intelligence and monitoring on +300 parameters for third-parties and locations.
These inputs come from curated risk intelligence verified through multiple sources, automation & oversight. The ultimate result is insights that are easily consumable, with clear dashboards, executive-level intelligence reports, and risk notification alerts.
Specifically, the location risk parameters are bucketed in the following categories:
- Geo-Political, covering elections, natural calamities, crime, corruption, epidemic outbreaks, etc.
- Legal, covering information technology policy, intellectual property, patents, data privacy, cybercrime, labor laws & unions, frauds, etc.
- Financial, covering labor costs, taxes rates, foreign property investments, fuel/electricity costs, telephone/internet costs, real estate costs
- Scalability, covering revenue and growth, opening of new Tier-I/Fortune 500 companies/captive centers, mergers & acquisitions, skill improvement programs, talent pool, hiring, layoffs, staff turnover rate, etc.
- Macro-Economic, covering credit risk rating, country/state level budget, public spend in sectors like ICT, inflation, interest rates, stock market fluctuations & performance, etc.
- Infrastructure, covering legal & regulatory changes, travel policy, incubation hubs, launch of new technologies, industrial relations, power supply & shortages, transportation, etc.
- Business, covering business atmosphere, investor interest, trade relations, credit coverage, etc.
- Quality of Life, covering pollution & environment warnings, climate conditions, health infrastructure, safety rates (cases of abuse, kidnapping, rape, molestation etc.), quality of life ranking, expat living, etc.
This approach allows you to monitor on a real-time basis the risk level of each location, according to the categories stated above. Thus, going far beyond point-in-time assessments with location risk monitoring data, alerts, analytics, scores and risk reports that are updated in real-time and on a continuous basis.
Use case: early warning to avoid costs
In the case of a strike, political unrest or natural disaster scenario, to name some examples, the alert system will raise the probability of risk and recommend to trigger Disaster Recovery and Business Continuity plans. In this way, your company can take precautions like asking employees to work remotely and increase security around the building perimeter.
To learn more about how ThirdPartyTrust can help you with real-time location risk monitoring, request your demo now: