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Due diligence on third parties – potential business partners, prospective businesses\u00a0to be purchased, and prospective customers – is a necessary\u00a0risk mitigation effort\u00a0for companies. Due diligence is also an anti-bribery standard in ISO 37001, where the implementation\u00a0of which\u00a0has also been\u00a0raised by the Indonesian government.<\/p>\n
For large\u00a0companies that may have hundreds of partners to deal with, due diligence has become a chore that consumes time, energy, and costs. In addition, businesses are expected to run\u00a0their due diligence\u00a0quickly and accurately. Luckily, \u00a0automation technology is\u00a0now\u00a0increasingly being applied in due diligence, especially nowadays\u00a0with the\u00a0rapid growth of\u00a0FinTech startups.<\/p>\n
Basically, this technology automates the repetitive tasks of due diligence, for example, adverse media report research as well as identifying beneficial ownership and politically exposed persons (PEP). Regarding automating tasks, companies need to know which elements in the due diligence process can be automated and how these updates are conducted.<\/p>\n
Applying this technology does not mean that human analysts are no longer needed.\u00a0Through automation,\u00a0human analysts can divert their energy to more complicated stages that require judgment. For example, if it was found that an executive at a prospective partner company is apparently under the observation of relevant authorities for alleged money laundering, then judgment and decision from human analysts\u00a0are needed\u00a0on\u00a0whether they will keep the company on the list or take it out.<\/p>\n
Hence, automation streamlines the process so that due diligence is more effective and efficient. However, due diligence is not just a checklist it should be a third-party risk mitigation plan. In integrating the technology to their due diligence program, companies need to at least consider how the program can monitor third parties on an ongoing basis and how the program raises alerts when changes on the third party\u2019s profile put them at risk.<\/p>\n
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Also Read:<\/strong><\/p>\n Preventing Politically Exposed Persons From Exposing Risks to Your Companies <\/u><\/a><\/strong><\/p>\n Vendor Due Diligence: 3 Common Pitfalls Your Companies Must Avoid<\/u><\/a><\/strong><\/p>\n What ISO 37001 ABMS Says About Due Diligence on Third Parties<\/u><\/a><\/strong><\/p>\n Putri<\/p>\n