Can you outline why your team embarked on this project and the problem that needed to be solved?
Aligned with the Bank’s vision for being a leading Central Bank, the Bank had an objective to design and implement the Next Generation of its Third Party Risk Management Program informed by best practices and adapted to meet the needs of a central bank.
How were things done originally and what was the inspiration to innovate the process?
While there were many good practices in third party risk management across the organization, there was an opportunity to improve the consistency and methodology, more clearly define roles and responsibilities, and increase integration and efficiency, thereby enhancing the overall effectiveness of third party risk management practices.
What KPIs did you use to measure success for this project? (For example: performance, customer satisfaction, revenue, sales or relevant financial gains?)
The project had three overall measures of success that were articulated by the working group
- Improved process (clarity of process, consistency and objectivity)
- Integrated tools (repeatable process and tools that support lifecycle management)
- Stronger risk management (risk-based approach, and role clarity)
How you plan to ensure that the new model remains relevant and adapts to the future needs of the market?
We will learn forward from stakeholder feedback and risk events that affect the bank and others. We will also ensure regular reviews and continued benchmarking with like organizations.
What advice do you have for those who may want to implement this innovative approach in their own organizations?
The key to success for this project was engagement of all key stakeholders – starting with the engagement of executive management to be pro-actively involved in decision-making. A working group consisting of both first and second line stakeholders ensured that the design of the program and tools met their needs and objectives.
How did your team assess the risks/potential for your third party management strategy?
The combination of experience and expertise, an “ask” versus “tell” approach and integration of existing best practices minimized the project risk and delivered a solution that is tailored to the needs of each stakeholder group in a Central Bank.