Financial institutions are managing larger vendor inventories with leaner teams while confronting emerging risks, such as those presented by artificial intelligence, according to a new report on third-party risk management by the compliance platform provider Ncontracts.
The survey of financial services professionals found that two-thirds (63%) of organizations had just one or two dedicated employees in their third-party risk management programs, and another 13% had no dedicated staff. At the same time, more than half (53%) managed at least 300 vendors, “creating ratios where individual professionals oversee 100-plus vendor relationships.”
The survey also found that nearly three in four institutions (72%) were only partially aware of which vendors are using AI. Not a single organization said they were “extremely confident” in managing AI-related risks, according to the report. The majority felt either slightly confident (38%) or moderately confident (31%), with larger institutions reporting the least confidence.
Nearly three-quarters (73%) of organizations felt pressure to improve third-party risk management. Thirty-eight percent cited internal management and board pressure, while 31% cited regulatory pressure.
