Over half of organizations have faced a risk incident due to third-party failure during the COVID-19 pandemic
- Published: Tuesday, 25 May 2021 07:14
A new survey by Deloitte into extended enterprise risk management (EERM) has found that more than half of (51 percent) of responding organizations have faced one or more third-party risk incidents whilst responding to the COVID-19 pandemic. 13 percent of incidents were considered ‘high impact’, severely compromising financial performance and profitability, customer service and, in some instances, put organizations in breach of regulations.
The survey received 1,170 responses, across 30 countries. The findings reflect the views of people accountable for third party risk management activities within their organization. Survey respondents came from a variety of organizations.
Other key findings include:
- 27 percent of organizations that hadn’t adequately invested in third party risk management prior to the pandemic faced a high impact incident over this time, compared to just 2 percent of those that had.
- A year on from the start of the pandemic, almost half (45 percent) of organizations remained in ‘respond’ mode in dealing with the impact of COVID-19, leaving many vulnerable to third party failure without due assessment.
- As workforces also shifted en masse to remote locations, 71 percent of organizations now identify digital risk as their top priority area. Despite this, 42 percent shared concerns over inadequate cyber security investment, topping the list of all emerging risk ‘domains’.
- Over the course the pandemic, organizations have accelerated their investment in technology to gain competitive advantage as they emerge from the pandemic and look towards recovery. Almost half (49 percent) of respondents are now updating their due diligence and monitoring processes using their tech investments to make them ‘intelligence led’ and in real-time, compared to a third (35 percent) last year.