TPRM Summit Highlights the Role of AI and Early Investment in Third-Party Risk Management

New technologies, particularly generative artificial intelligence (AI), took center stage at the recent Third-Party Risk Management (TPRM) Summit organized by Compliance Week in Atlanta. The summit gathered around 300 compliance and risk professionals to explore best practices in TPRM.

One of the key discussions revolved around the potential impact of AI on the TPRM landscape.

Karen Coker, Director of Third-Party Risk and Vendor Management at fintech firm LendingPoint, emphasized the importance of efficient AI solutions in TPRM processes. She stated, "I’m looking for something that’s efficient, going to manage workflows, gather information, and avoid workarounds to the controls we have in place. [...] So, I have to choose something that is going to keep me from getting in trouble."

Investing in TPRM early emerged as a recurring theme during the summit. Attendees were encouraged to start their TPRM journey without intimidation. David Huntley, Senior Executive Vice President and Chief Compliance Officer at AT&T, stressed the significance of upfront investment in automation. Huntley stated, "If you’re smart and starting out, what I would do is spend the money upfront to automate the systems. What you don’t want to do is grow and then have a bunch of antiquated processes that will cost you a ton more money to try to remediate."

The summit also highlighted the importance of considering international regulations in TPRM efforts. Gary Kalman, Executive Director at Transparency International U.S., drew attention to the ease with which bad actors can hide illicit funds in the United States. He stressed the need for robust supply chain and third-party due diligence. Kalman remarked, "Companies that operate internationally do need to be putting in place appropriate supply chain and third-party due diligence to really address these risks."

Independent board oversight emerged as another crucial aspect of TPRM. Debra von Storch, an independent director at various companies, emphasized the need for a high-level understanding of third-party risk management program participants and organization. Von Storch explained, "I don’t want the microdetails, but I need to see a view of who are our third-party risk management program participants and how is it organized."

Furthermore, the summit emphasized the importance of proactive relationships in third-party compliance audits. Angela Crawford, a partner at Crawford & Acharya, highlighted the benefits of collaboration between legal, compliance, and audit teams. Crawford stated, "You want to make this as painless as possible. [...] This is the space we live and play in as compliance professionals, but for a small distributor or businessperson to have somebody come in and ask for all this stuff—it’s a scary experience. It’s not an investigation; do what you can to ratchet it down a notch."

The TPRM Summit provided a platform for professionals to share insights and best practices, with a specific focus on leveraging AI, early investment, international regulations, independent board oversight, and proactive audit relationships. The discussions aimed to equip attendees with practical knowledge to enhance their TPRM strategies and effectively navigate the evolving risk landscape.

By fLEXI tEAM