Everything You Need to Know About Vendor Risk Assessments

Partnering with third parties—or vendors—is often essential for operational efficiency in today’s financial services landscape. Financial institutions of all sizes and resources are frequently using vendors, specifically financial tech (fintech) and banking-as-a-service (BaaS) providers. Sixty percent of credit unions and 49% of banks in the U.S. believe that fintech partnerships are important.

However, these external relationships come with significant potential risks, from data breaches and other cyber threats to operational disruptions. Moreover, most financial institutions aren’t fully aware of their vendors’ internal risk management practices and compliance standards, which adds another risk layer.

Enter vendor risk assessments, your key tool in identifying, evaluating, and mitigating risks associated with third-party vendors. With the proper vendor risk assessment, careful monitoring, and consistent communication, you can maximize vendor relationships while protecting your organization and customers.

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