Outsourcing Vendors: How to Categorize by Risk
Join BearingPoint Senior Manager Hitesh Anklesaria to explore the importance of categorizing the risks of outsourcing vendors. Whether it’s the local landscaper or the offshore technology support center, financial services organizations outsource various operations to multiple service providers all over the globe. Each vendor presents its own set of operational, financial and security risks to the institution.
Risk assessment helps firms identify risks and establish a baseline risk model for vendors, business partners and service providers. After establishing potential weaknesses through the assessment process, a logical next step is to categorize the vendors based on the risks associated with the specifics of each vendor’s contracted work.
Identifying vendors that pose the greatest risk helps guide actions to reduce exposure and allows the organization to focus effort and resources on increasing risk reduction. Categorizing vendor risks can be difficult for institutions working with hundreds of various providers. Vendor categorization offers a systematic way to analyze and rate provider risks.