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BNY Mellon joins vendor risk consortium TruSight

Fifth major financial to back new angle on third-party risk

BNY Mellon joins vendor risk consortium TruSight

The time and expense of vetting third-party relationships with vendors and partners continues to vex banks of all sizes. A consortium backed by a quartet of large financial companies has been joined by one more large firm and has been attracting interest from banks of all sizes since its launch last year.

Recently BNY Mellon joined American Express, Bank of America, JPMorgan Chase, and Wells Fargo as both an investor in and client of TruSight. The company represents an effort to develop best practices, standardized processes, and comprehensive third-party risk assessment services.

Assessment as a service

Vendor due diligence represents a major expense for banks. Very large financial companies may have tens of thousands of vendor relationships which must be reviewed in detail. Regulatory attention to such due diligence has been steadily increasing.

Since last year’s launch, TruSight CEO Abel Clark has spoken to many national, super regional, regional, and even some smaller banks about the company’s goals. “Everyone cites this as a pain point,” he explains in an interview with Banking Exchange. Risk assessments of vendors chew up a great deal of money and staff time, some of it on massive but basic information gathering.

The idea behind TruSight is to spread some of the burden by centralizing the function and sharing in the development of reports. Clark describes TruSight’s business as a “shared-service model” and “assessment as a service.” TruSight offers a standardized best practices questionnaire for clients through its platform for arranging reports. Beyond that, TruSight offers a wide range of services, including virtual and on-site reviews that that validate a given vendor’s protocols, processes, and practices are operating as designed and described.

The process, which is now live, is not quite as simple as member organizations sharing access to due diligence reports like library members all being able to share the same book. Clark explains that a financial company has to be able to produce an assessment for regulatory review that not only addresses the core issues that would concern all clients of a vendor, but also to specifically address the relationship in terms of the way that the vendor will be engaged by the company.

The reports being put together by TruSight are produced by full-time staff at the firm. The intent is to save time and resources both for clients as well as the vendors. Clients can request additional work beyond the initial report produced by TruSight staff. Unlike a lending library, client companies obtain the “story” they need, Clark explains.

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Steve Cocheo

Steve Cocheo’s 39+ years in financial journalism have taken him to all 50 states and nearly every corner of financial services in companies from fintech startups to community banks to regional and national giants. He is executive editor of Banking Exchange and digital content manager of www.bankingexchange.com. Previously he spent 36 years on the staff of ABA Banking Journal and 22 years concurrently as editor of ABA Bank Directors Briefing. He is the only journalist to have sat in on three federal banking exams, was a finalist for the Jesse H. Neal national business journalism awards, and a winner of multiple awards from the American Society of Business Publication Editors. In 2017 he received three awards from ASBPE: National Gold, National Bronze, and Regional Silver. Connect with Steve Cocheo and Banking Exchange on LinkedIn. Follow Banking Exchange on Twitter

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