Markit is launching its Know Your Third Party (KY3P) service hosted by Dell Cloud Services in what should simplify and standardise third party risk management processes around vendor due diligence and on-going monitoring.
KY3P was created in partnership with banks, buy-side firms and third parties themselves. Barclays, HSBC and Morgan Stanley will be working with Markit to on-board their third parties onto the data hub. The KY3P data hub will include standardized due diligence questionnaires, external audit capabilities and Significant Event Notification and Tracking (SENT), enabling firms to manage external events such as cyber-security or business continuity incidents quickly and without duplication.
The due diligence information will include data on financials, stability ratings, audit reports, which can be utilized by financial institutions to conduct their own risk assessments on third parties. “Third party risk management processes are bilateral in nature, time consuming and repetitive. KY3P will transform many aspects of third party risk management,” said Michele Trogni, managing director and co-head of solutions at Markit.
Vendor due diligence can be a cumbersome process and often lacks uniformity. Having an easily accessible data hub will certainly aid the process. Furthermore, regulators are demanding financial institutions undertake more due diligence on their vendors and counterparties.
The UK’s Financial Conduct Authority (FCA) has reviewed the outsourcing practices at asset managers and highlighted they need to ensure that there are viable exit strategies in place in the event of a service provider failure.
Meanwhile, the Securities and Exchange Commission (SEC) has warned firms they need to undertake due diligence on any third parties hosting sensitive data, such as technology firms or administrators, following a series of high-profile cyber-security breaches.
“KY3P is a powerful innovation, not only in the fin-tech ecosystem, but for firms of all sizes who have multiple vendor relationships. Raising the profile of growing fin-tech firms, clarifying standards for customer on-boarding and easing time to market are all critical factors for success,” commented Mark Beeston, managing partner and founder of Illuminate Financial Management, a capital markets fin-tech venture capital firm.
Markit launches vendor management tool
Markit is launching its Know Your Third Party service hosted by Dell Cloud Services in what should simplify and standardise third party risk management processes around vendor due diligence and on-going monitoring.