Risk Management
A Builder's Guide to Third-Party Risk Management (TPRM)
Essential practices for managing vendor and partner risks
Published
Jul 10, 2023
Reading Time
14 min
Author
AskDegree Team
Third-party risk management (TPRM) has always been a critical aspect of the fintech industry. Increased attention from regulatory agencies has put many organizations on notice to beef up their TPRM programs. This comprehensive guide explores the best practices of TPRM, providing you with the knowledge and tools to strengthen your TPRM development strategy.
1. Know Your Regulatory Landscape
The first layer of TPRM oversight involves navigating the complex regulatory landscape. Regulations in the fintech industry are constantly evolving.
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1.1 Building a Regulatory Compliance Framework
Develop a robust regulatory compliance framework that outlines your company's obligations and provides clear guidance on compliance management.
- •Document specific regulations applicable to your business
- •Map vendor activities to regulatory requirements
- •Create vendor assessment criteria based on regulations
- •Establish ongoing monitoring procedures
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Key Insight
The most critical vendors require the most scrutiny. Implement tiered monitoring based on vendor risk classification to optimize your resources.
Conclusion
A robust TPRM program is essential for managing risk in the modern fintech ecosystem. By implementing these best practices, you can build a resilient vendor management program that protects your organization and satisfies regulatory requirements.