As much as 43% of third-party relationships are not subject to any form of due diligence checks, finds Refinitiv
World events such as the Covid-19 pandemic together with regulatory developments including the proposed corporate due diligence legislation from the European Commission, have resulted in an unprecedented level of scrutiny on business supply chains.
Despite these pressures, research from Refinitiv shows that as much as 43% of third-party relationships are not subject to any form of due diligence checks. With companies having an average of 10,000 third-party relationships, many organisations are not fully managing supply chain risk.
Refinitiv’s Snapshot reports offer a view of potential risks that can be used to prioritise business relationships, using AI and natural language processing (NLP) to create a consolidated view of public domain information, including company details, risk intelligence from Refinitiv’s World-Check, as well as adverse media and country risk information.
Based on the results, organisations can take a risk-based approach to prioritise and determine their next steps.
“Companies today have an enormous challenge when it comes to onboarding new suppliers and staying on top of the thousands of third-party relationships they may have,” said Charles Minutella, head of Due Diligence Services at Refinitiv. “In addition, the legal, reputational and financial costs of not performing adequate due diligence on supply chains are increasing rapidly around the world, particularly at a time when regulators are looking more closely at corporate due diligence practices.”