Often, when due diligence is mentioned, it involves satisfying legal requirements prior to completing a transaction. While that is certainly an integral piece, a properly managed due diligence program also considers third-party risk and documents a mitigation plan to protect you, your third parties, and your customers’ data privacy.
Here’s a look at how enterprises can manage third-party risk by conducting due diligence and ensuring compliance with data residency and transfer regulations.
Automate Information Collecting and Training
When it comes to your organization’s risk exposure, not all third parties present the same level of risk, thus, a risk-based tiered approach is recommended for most organizations. At a minimum, to protect your organization from the most obvious risks, a basic level of due diligence should include a search of sanctions and watch lists, politically exposed persons, and adverse media.
While this cursory search helps identify obvious risk, a well-rounded due diligence program further identifies and segments risk by asking key questions. Gathering information and understanding your third parties’ country, relationships, engagement type, transaction volume, and other key characteristics is crucial in determining risk.
As additional information is collected, the challenge becomes risk segmenting third parties in such a way to effectively allocate resources, conduct an appropriate level of due diligence, provide training, and document the mitigation plan. Fortunately, organizations can leverage technology, such as TDI Diligence Suite, to automate screening, calculate and categorize risk, and implement remediation plans efficiently and effectively within Salesforce.
Streamline Workflow Integrations
Third-party risk management and due diligence are critical elements in maintaining an enterprise’s reputation, compliance posture, and security. While these are critical elements to an effective risk management program, developing and executing the program requires a tailored, risk-based approach enabled by technology and supported by human judgment.
Leveraging automation through the integration of compliance and due diligence process workflows directly into the sales/business development process allows you to seamlessly conduct a compliance review anytime a new customer, business partner, supplier, or distributor is onboarded in Salesforce.
Once these third parties are approved, the analysis can’t stop there, as the risk around third parties is often in flux and affected by an evolving risk landscape. Third-party risk management programs should include a monitoring component that feeds directly into your CRM, product inventory management tool, and other parts of the business. By integrating these tools and functions, you’ll save valuable time communicating and switching between systems, while ensuring your company is not engaging with prohibited entities or shipping products to customers and distributors that have not received compliance approval.
Enable Role-Based Security
Enterprises have a large number of stakeholders, each bringing something unique to the table; thus, not all users should be created equal in your system. Sensitive due diligence, compliance, and risk data must be limited to a strategic, select group of users.
By leveraging tools that offer granular control over record visibility, you ensure that all users can accomplish their role in the due diligence process while circulating sensitive information only among a limited group of users. In the unfortunate event of an information leak, pinpointing the culprit is a speedier process with defined user types.
Ensure Compliance With Global Data Privacy and Data Residency Regulations
Today, nearly every enterprise (and even many SMBs) has a global presence, especially given the advent of remote work. For business leaders, this adds an additional layer of complexity: ensuring your business practices remain compliant with data privacy and data residency regulations across the globe, including GDPR in Europe and PIPL in China. What might fly in New York City or Chicago will face a different level of scrutiny in Beijing or Paris.
The solution? Ensuring that all restricted data and sensitive PII is only shared as permissible across jurisdictions and stored locally as required by local regulations. With a tailored solution, you can automate privacy consent with country-specific data residency, transfer, and privacy consent agreements.
Summary
TDI Diligence Suite provides a solution that allows you to perform due diligence and monitoring for third parties by taking all the above factors into account.
By integrating the tool with Salesforce and leveraging automation, the results are twofold:
- Enterprises can protect themselves from security threats that might be missed or overlooked by traditional background checks or limited Know-Your-Customer (KYC) protocols.
- Customers can ensure they leverage data legally, ethically, and securely, protecting themselves and their customers from bad actors.
A brief demo can be seen here on the Salesforce AppExchange.
