The Know Your Third Party (KY3P) team recently attended the Community Bankers Conference organized by S&P Global in Frisco, TX. The three-day event attracted an audience of over 150 professionals from community banks across the US. Presentations and panel discussion topics included: the US Economy, Balance Sheet Management, Loan Pricing and Structuring, Deposit Analytics, Regulatory Hot Topics, Human Capital, Third Party Risk Management, and FinTech Vendors.

Focusing on third party risk management (TPRM) issues, we took away three key themes of interest to community bankers in the USA:

1. TPRM continues to be on the shortlist of top risks for banks of all sizes. Although smaller than the regional and money center banks, community banks are subject to the same or similar regulatory requirements on managing vendors. As a result of the recent market turmoil with regional banks, community banks realize that deposits are not as sticky as once perceived - a data breach or cyber event at a supplier can severely damage a community bank's reputation and viability.
2. Personnel overseeing TPRM are aligned to several operational or compliance areas, so there isn't a dedicated focus on one discipline. These resources are giving their best effort to safeguard bank and client data, but in many instances, they lack the experience to identify issues or develop remediation plans.
3. The tools used to manage TPRM programs include applications that are already available inhouse. Teams are finding creative ways to managed shared folders and spreadsheets for conducting and tracking third party risk management activities. However, these solutions tend to be missing the auditing and analytics capabilities necessary for understanding changes in the supplier relationships and identifying risks within the program.

In addition to the formal presentations and panel discussions, we had many conversations with community bank executives in attendance. These conversations solidified our understanding that community banks need simple, out of the box solutions that enable them to quickly establish a full TPRM program to register, risk assess and oversee third parties.

How KY3P® by S&P Global can help:

KY3P® helps you manage your end-to-end vendor portfolio lifecycle on a single platform with on-demand, multi-dimensional vendor risk assessments. Our tools let you continuously monitor risk through partnerships with industry-leading data providers that specialize in financial health, cybersecurity ratings, data-breach analysis, location risk, and more. Our managed services scale your third party risk management program, while minimizing constraints caused by the difficulties of attracting and retaining risk management teams.

S&P Global provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.