Banks Scale Back GRC Vendor Reviews Amidst Tightening Third-Party Risk Management
A recent industry survey indicates banks are reducing the frequency with which they evaluate governance, risk, and compliance (GRC) software vendors, signaling a shift in strategy as financial institutions grapple with increasingly complex operational risks.
Banks appear to have curbed the frequency with which they review vendor provision to help manage the top operational risks they face, with even the largest banks inviting fewer formal pitches from governance, risk and compliance (GRC) software providers versus a couple of years ago. The findings, drawn from Risk Benchmarking’s annual operational risk survey – encompassing a record 39 banks – suggest a period of consolidation and a focus on optimizing existing vendor relationships.
According to the data, this trend coincides with a broader tightening of third-party risk management (TPRM) regulations and a more cautious approach to adopting new technologies. While overall GRC vendor reviews are down, TPRM is notably bucking this trend, indicating its growing importance within the financial sector.
The survey reveals a decrease in plans to both pitch and switch vendors, suggesting banks are prioritizing stability and deeper integration with current solutions rather than actively seeking alternatives. One analyst noted that this shift could be attributed to the significant investment and disruption associated with onboarding new GRC systems.
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The trend towards fewer GRC vendor reviews underscores a growing emphasis on efficient risk management and a strategic approach to technology investment within the banking industry.
