Refinitiv, an LSEG business, one of the world’s largest providers of financial markets data and infrastructure, has published the findings of its global risk management survey. The report highlights how the COVID-19 pandemic substantially increased customer and third-party risks, and that technology holds the potential to help organisations respond to the risk challenge.
The survey found that respondent organisations were under mounting pressure to increase revenue (73%) and profits (65%) due to the COVID-19 pandemic. As their organisations were burdened to keep operations and disrupted supply chains running, the survey found that 65% of organisations took shortcuts with KYC and due diligence checks – significantly increasing their risk exposure.
Only 44% of respondents conducted initial formal customer or third-party due diligence checks, a 5% drop compared to Refinitiv’s 2019 survey (49%). When it comes to due diligence checks, by region, Europe was the lowest performing (40%) while Sub-Saharan Africa (56%) the highest. A focus on rapidly forging new third-party relationships also created an environment with reduced sanctions screening, with only 40% of organisations making screening a priority and 56% of respondents admitting they did not fully manage risks related to sanctions screening.
Regulators also eased pressure on organisations; compared to Refinitiv’s 2019, pressure from governments (75%), regulators (67%) and corporate boards (64%) was considerably lower during the pandemic.
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