Know Your Supplier
According to a 2020 report by Refinitiv, an LSEG business, the average organisation today is managing 9,000-10,000 third-party relationships at any given time.
The sheer size of the oversight problem is vast. Increasing national and international supply chain complexity across industries, coupled with the convergence of a wide range of regulations scrutinising supplier relationships, has made supplier management a key challenge for almost every type of organisation.
There has never been a more important time to keep track of your key relationships and suppliers, and also to ensure any customer contact is relevant and adds value.
Tracking company financials, structural changes and risk information will also become increasingly important as the impact of the outbreak evolves.
Ensuring that your business is working with the right suppliers and vendors, and building long-lasting, trustworthy, and mutually-beneficial relationships, is vital for innovation and growth.
As those within banking and other regulated industries are familiar with the term KYC (Know Your Customer), there is a necessity to apply the same due diligence principles to also Know Your Supplier (KYS).
Rather shockingly, according to Refinitiv’s research:
- 43% of third-parties are not subject to adequate due diligence at the onboarding stage
- 60% of organisations are not fully monitoring third-parties for ongoing risks
The key to effective Know Your Supplier (KYS) is data. Unfortunately, most organisations lack a complete view of their third-party relationships and cannot afford the time and resources required to maintain the information necessary to manage these relationships.
Technology like Artesian Connect™ and Refinitiv could provide the answer.
Connect the dots for collaborative supply chain management
It’s not only the supply chains themselves that are complex, so too is the management of them. The wide range of third-party relationships within any supply chain means that all too often risks are managed in silos – by different teams using different processes.
This approach is untenable. A more holistic data-driven approach is needed.
According to Refinitiv, 37% of organisations believe lack of data is the main problem they face in identifying risks in the supply chain. But you need to realise that this is simply not true – data exists and is plentiful.
The main problem is not a lack of data, but harnessing and understanding it.
The key is to combine the know-how that sits within your business (in your people, in your systems and processes) with external structured and unstructured data (including financial stability intelligence, Delphi score, PEPs and sanctions, bribery, corruption and financial crime triggers, adverse media, ethical and CSR insights, as well as broader overview of events happening in the market, competitor analysis and so on) and advanced technology (AI, data science, machine learning) to spot and mitigate risks faster.
Turning once again to Refinitiv and their recent Supply Chain Playbook, if you have the right data and insights, you can start adapting relevant areas of the supply chain with speed and agility – allowing your people to do more, know more, and know faster.
This not only protects your business against financial and reputational damage, but it vastly enhances regulatory compliance, as well as overall operational efficiency and profitability.
Connect the dots for a 360 Degree Supply Chain View
Your business already has a goldmine of know-how hidden in its people, spreadsheets and databases, but this supplier data is often incomplete, outdated, and fragmented across the business – making it impossible to build a complete, reliable view of all your suppliers and entire supply chain.
Fill in the gaps with external data harvested from millions of data points (structured and unstructured) and you get that vital trusted 360-degree KYS view – expanding out the data set for more detailed risk assessment, beyond that held in traditional Enterprise Resource Planning (ERP) and supply chain management (SCM) systems, to achieve advance supply chain oversight for decision-making and an improved ability to spot and mitigate potential problems before a negative event occurs.
Connect the dots to quickly and concisely analyse vast data sets
Of course, sometimes the problem is too much data. KYS information is certainly abundant, but as well as pulling it all together in one place, you must analyse it and quickly put the right insights in front of your people.
Leveraging AI and automation technology means you can quickly and concisely make sense of large data sets, organise and flag the information most relevant to your business and your supply chain.
Receiving a constant stream of analysed and filtered risk-related insights about suppliers and vendors is invaluable when making supply chain decisions, and can help leverage supply chain improvements to boost your market value, customer relationships, reputation and financial stability.
Solutions like Artesian Connect™ also offer the opportunity to customise data analysis, and apply rules to data with flags or triggers.
Not only can you track intelligence from key data suppliers such as Experian, Refinitiv, DnB, Lexis Nexis and more, as well as news, adverse media and social insights, but you can also do so in a way that reflects your own policies and processes for even smarter KYS and supply chain management.
Connect the dots for advanced supplier onboarding
Onboarding third-parties, vendors, or suppliers is a time-consuming and repetitive process – certainly one that is ripe for transformation. Whilst third parties, vendors, and suppliers help enable productivity, they can also expose businesses to unnecessary risks if you are not conducting adequate due diligence.
Refinitiv research suggests that due diligence isn’t adequate in around 43% of cases.
You must work smarter to find ways to streamline manual processes that slow down the supplier onboarding process. It starts with data.
By taking internal KYS know-how, harnessing data science to automate external supplier identification and data collection processes, layering the two together and applying an AI-powered rules engine to flag issues immediately, your business can drive increasingly agile onboarding processes.
Identify and organise third parties at scale, conduct advanced background and integrity checks, and ensure detailed KYS by enabling you to look at every facet of a supplier business from every angle quickly.
In addition, you have the opportunity to improve the supplier onboarding experience for all parties, protect your reputation and financial security, and crucially meet your regulatory requirements by understanding exactly who you are doing business with.
Connect the dots to monitor ongoing third-party risk
60% of organisations are not fully monitoring third-parties for ongoing risks. The pandemic has highlighted just what a threat this lack of oversight poses.
During the pandemic, lots of suppliers were forced to pivot business models, make redundancies/furlough staff, adjust their own supply chains and face a range of new economic and market pressures.
The Refinitiv Supply Chain Playbook rightly points out that as the crisis unfolds, mitigating supplier risk becomes even more critically important.
To do so with speed and efficacy, organisations must have a holistic view of how suppliers are impacted.
Never before has your business required greater transparency, effective management and use of quality data, automated processes, and a systematic approach to monitoring ongoing third party and supply chain risks.
By combining your know-how with advanced data science you will always be in a position to understand what is happening within your supply chain and adapt with speed, efficacy and control when a crisis hits.
Artesian Connect™ for advanced KYS powered by Refinitiv
Artesian Connect™ offers an advanced KYS risk screening and due diligence solution, from initial research, through onboarding, to ongoing monitoring. The ultimate KYS solution, with Artesian Connect’s Know-How Equation you can monitor the now, see the future, reduce third-party supplier uncertainty, and improve regulatory compliance.
“In an increasingly interconnected and globalised world, complex supply chains can create competitive advantages for businesses and cut costs for consumers, but they also carry risks. The supply chain term is an understatement of the real complexity that comes with third-party relationships – often these represent a supplier web, where on every level the availability of information diminishes in return of a geometrical progression in exposure to risk.
Refinitiv plays a key role in providing trusted and accurate data to identify supply chain risk, including sanctions risk, exposure to bribery and corruption, modern slavery and environmental crime. Artesian Connect structures and streamlines the data to pinpoint the areas of higher risk and it is the “marriage” of trusted data and innovative technology that creates competitive advantages for our mutual customers. Our partnership is a response to customer requirements to access the best quality AML/KYC data via the most innovative technology on the market to empower frontline with better insights.”
Teodora Christova, Partner Manager, Refinitiv, an LSEG Business.
