Identifying Concentration Risks in Financial Services Supply Chains
Supply chain cyber attacks are rising, exposing financial institutions to risks hiding deep in their supply chains.
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Despite regulatory mandates, firms struggle to map and analyse their extended supplier ecosystems, leaving both individual organisations and the broader financial system vulnerable.
In a trial project with just six financial institutions, nearly 1,300 suppliers were identified, exposing deep interdependencies across their supply chains. Despite the small number of participants, 47 potential systemic concentration risks emerged, none of which would have been visible to any firm on its own.
This project's findings demonstrate that true cyber resilience and effective third-party risk management can only be achieved through industry-wide collaboration.
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What you will learn in this report
Overview
The key challenges with traditional TPRM and why it is no longer enough, the project objectives in detail and how they relate to new operational resilience regulations such as DORA, and what concentration risks are.
Key findings
How risk Ledger mapped out the extended supply chain dependencies of the participants from the 395 third parties provided, and what we discovered in terms of potential concentration risks at 3rd, 4th and nth party levels.
Challenges
The key challenges participants faced when individually trying to identify concentration risks in their supply chains, and how these can be overcome in future projects.
Recommendations & conclusions
Here, we suggest some recommendations for how concentration risks can be more effectively identified through leveraging the power of TPRM programmes and enhanced industry-wide collaboration.
Defend your supply chain with Risk Ledger.
