TPRM FLOD Centralized-Decentralized Debate

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Global SRN is currently leading a significant market research program on the ‘Impact of Intelligent Automation and Data Analytics on TPRM Operations’.  As the leader of this program, I am in the fortunate position to consolidate the input from our 30 TPRM leaders who comprise the Advisor Team and the now 15 Community Partners. Last week I shared the insight pertaining to the skill challenge impacting TPRM operations. I want to share a second observation concerning FLOD structure.

We have received a tremendous amount of comment on the subject of TPRM FLOD structure. What should be a straight forward 3-tier structure, continues to be an area of confusion and exposure across a surprising number of those providing survey input.

Questions are typically in 2 primary areas:

If your FLOD is ‘centralized’:

  •  How do you make certain your associates are integrated and viewed as a contributor by the line of business team?
  • Are they ‘risk-skilled’ – ‘expert in the assigned LOB’ – Both?

If your FLOD is ‘decentralized’:

  • Do the associates report to the SLOD organization or LOB?
  • Is FLOD activities executed by a full-time associate or are task assigned to existing LOB staff such as vendor management?
  • How do you ensure the FLOD activities are viewed as core versus optional?

Both approaches CAN produce the desired and required results IF LOB leaders and risk leaders work together to carefully identify roles, responsibilities, task and activities. While it is no small undertaking, this extra effort always produces positive results.

 

TPRM Dilemma – Skill Gap Widening

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In my role with Global SRN, I am leading a major market research program to identify the impact Intelligent Automation and Business Analytics is having on current TPRM operations. We are very pleased to share that in all we have 30 TPRM Executives from large global financial organizations, 13 TPRM community partners and 3 academic partners helping develop, distribute and interpret the research results.

As I speak with leaders in each of these areas of the TPRM community, a consistent theme has emerged: TPRM organizations are struggling to secure the skills necessary to support todays operations and are highly concerned about the ability to identify and attract the skills necessary to transform their operations to meet business and regulatory demands. The core issue being how to evolve a community of operational risk professionals from a ‘rule-based’ orientation to a ‘judgment-based’ capability.

With the adoption of Business Analytics and Intelligent Automation, TPRM leaders will require First Line of Defense teams that understand the dynamics of their assigned Line of Business combined with analytical skills to quickly identify patterns and irregularities to take proactive measures. With the population of FLOD associates today primarily having operational risk backgrounds, there is likely a significant re-alignment on the horizon.

Global SRN TPRM Program Launch

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The team at Global SRN (www.globalsrn.org) is pleased to announce the formal kick-off of the research program ‘Impact of Intelligent Automation & Data Analytics on TPRM Operations’.  A true community effort, Global SRN has formed an Advisory Panel of leading TPRM executives along with Academic Partners such as Carnegie Mellon and Community Partners such as KPMG, EY, Grant Thornton, Rapid Ratings, Aravo, WorkFusion and other TPRM participants to develop a comprehensive insight to this emerging issue. If you’re interested in joining the team, please let me know!  

Is Intelligent Automation the Key to Unlock TPRM Value?

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There are multiple operational ‘Maturity’ assessments promoted throughout the Third Party Risk Management community. Each offers a unique perspective and definite orientation on which operational capability and maturity is measured. What most of these assessments seem to have in common, is a mature TPRM organization (Level 4 & Level 5) introduces analytics to their operation.

Currently, the data captured in TPRM & GRC platforms is basic, essential data points. Much of which has been developed to meet or satisfy regulatory requirements. What happens when we take a fresh look at the information TPRM can collect and maintain with an eye toward business value?

Collaboration between IA platform providers, GRC & TPRM platform providers, data feed and dynamic reporting partners and implementation partners offers significant potential to help TPRM and GRC leaders unlock value. Global SRN (www.globalsrn.org) has initiated a research program with Academic and Market partners to facilitate this interaction. If this is an area of interest, please leave a comment in TPRM Forum’s Contact page and we will respond.

Intelligent Automation Impact on TPRM Operations

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The Global Sourcing Research Network (www.globalsrn.org) announces the formation of the TPRM Sub-committee to support members increasing focus and engagement with vendor risk. The initial focus of the TPRM sub-committee is the introduction of a market research effort to identify emerging use case of Intelligent Automation in Third Party Risk Management operations.

As a market survey, Global SRN will engage Academic and Community partners to participate in design, execution and analysis of the results. The goal being to identify current and emerging IA use cases and document best practices to benefit TPRM operations. Potential Academic Partners include Carnegie Mellon University, NC State and others. Community Partners will feature leading Intelligent Automation firms, Governance, Compliance & Risk (GRC) platform, managed service and consortiums as well as advisory firms.

If you are interested to learn more about the Global SRN TPRM sub-committee, please visit Global SRN or TPRM Forum.

 

TPRM Survey Respondent Profile

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Thank you to the 114 risk professionals who completed the IT-TPRM.com survey on the impact of Digital Transformation on TPRM operations. The survey is now closed and we have initiated analysis of the results but wanted to share the typical profile or average demographics of the respondent.

Respondents to the IT-TPRM.com survey are:

  • Members of their TPRM organization
  • Work in the banking and capital market segment
  • On average, have $100 billion assets under management
  • Is being impacted by digital transformation
  • Cloud is the leading digital technology impacting operations
  • Primary operational focus is accelerating support of business operations
  • Most concerned about identifying 4th and 5th parties for business continuity
  • Believes regulators will increasingly focus on capacity and concentration of third parties

We will release final survey results and analysis next week!

Are TPRM Leaders Underestimating Blockchain Impact?

Digital Tech Analysis - Q2

Responses continue to stream in for the IT-TPRM.com survey on the impact of Digital Transformation on TPRM operations. We remain on track to share the full survey Mid-June!

The survey ask respondents to identify the digital technology dynamics impacting their organization currently or in the coming 12 months. To no surprise, Cloud, Cybersecurity  & Automation are consistently identified as the technologies of greatest impact. The surprise so far is how low Blockchain is trending as a key area of focus for TPRM leaders.

At the recent RMW GCOR conference, during the regulator panel they stated the areas of great focus and interest is Cloud, Automation & Distributed Ledger (Blockchain). Are TPRM leaders not seeing what is emerging on the horizon or not clear as yet how it will impact their operations? Share your thoughts! Please take 3 1/2 minutes to take the survey.

Take the Survey