Companies struggle to conduct onsite assessment of vendors, subsidiaries amid pandemic

Mumbai: While many companies have been forced to increase their reliance on outsourcing some of its work due to Covid pandemic, most of them are also struggling in monitoring them.

The increased reliance could also lead to frauds and reputational risks said industry trackers.

Organisations and their customers face a growing number of third-party incidents, coupled with increasing regulatory scrutiny, and therefore, third-party risk is emerging as a key focus area, a research paper by KPMG India said.


“The COVID-19 pandemic has brought unprecedented disruptions across multiple sectors impacting the business activities of organisations and their third parties. The pandemic not only amplified the impact of third-party and supply chain disruption, but also challenged the ability of global organisations to plan and execute key TPRM components such as onsite assessments. This has likely triggered long-term changes in the way organisations conduct onsite assessments, “said Srinivas Potharaju, Risk Transformation Leader and Partner, Risk Consulting, KPMG India.

“Online assessments, which leverage a range of collaboration tools, data sharing platforms and augmented reality/virtual reality (AR/VR), are showing a high degree of effectiveness across traditional onsite control areas, such as policy review, system configuration, and confidential information. There, however, remain limitations in some areas,” said Srijit Menon, Third Party Risk Management Leader and Director, Risk Consulting, KPMG India.

As per the research paper jointly authored by Potharaju and Menon online assessments are expected to mature over time as assessors and third parties become accustomed to the new ways of working. While onsite assessments cannot fully replace onsite ones, the need to define alternatives to existing approaches for onsite assessments has become clear, given the new realities that confront businesses today.