How can you build trust in your vendor risk management ecosystem? Organisations have three opportunities to build trust in the ecosystem mentioned below:

1. Building Trust at a Policy Development Level

Organizations often have vendor-related policies, but these typically lack detailed ethical guidelines and trust-building measures. Extending ethics and compliance programs to vendors is essential. Data security is a critical aspect, and organizations must ensure robust security protocols before sharing data with third parties. This includes methods like de-identification, encryption, access control, and compliance with standards such as ISO 27001. Sharing best practices with vendors through tutorials and communications can enhance trust and preparedness for data breaches.

2. Trust Building at a Control Monitoring Level

Organizations use various technologies to monitor transactions and mitigate fraud, including ERP systems, data mining tools, and emerging technologies like process mining. Leveraging digital footprints to reconstruct process flows helps detect anomalies and ensure controls are effective, thereby building transparency and collaboration with vendors. Continuous monitoring and due diligence throughout the vendor lifecycle are essential to manage risks and maintain trust. This involves periodic reviews and data analytics to identify potential issues, ensuring that vendor relationships are sustainable and trustworthy.

3. Trust Building at a Professional Relationship Management Level

Aligning interests and compliance standards between internal stakeholders (such as business and compliance teams) and external stakeholders (vendors) is critical. Establishing a culture of compliance through codes of conduct, training on ethical practices, and regular communication helps build trustworthy relationships. Treating vendors as stakeholders in the organization’s growth plans and ensuring transparency in processes and expectations fosters a strong, trust-based professional relationship. This alignment and engagement are key to maintaining compliance and trust within the vendor network.

Interested in reading more about building trust in the vendor risk management ecosystem, please download Deloitte’s full article here.