RiskTalk: The Impact of AI on third-party risk management

In the latest episode of RiskTalk, the podcast by 3rdRisk, the spotlight is on the role of artificial intelligence (AI) in third-party risk management (TPRM). Experts Harm Kuiper (Deloitte), Lars Wiegers, and Bram Ketting (3rdRisk) share their insights on how AI supports risk professionals in managing risks, the tangible benefits it offers, and the challenges it presents.

1. AI and third-party risk management: A new approach

AI is playing a pivotal role in managing risks within complex supply chains, especially in highly regulated sectors such as financial institutions and large corporations. By moving away from manual processes, businesses can leverage AI to work faster and more consistently. This is critical in a world where risks are becoming increasingly complex.

“When we first started with AI, many processes were slow and time-consuming,” says Bram Ketting. “Thanks to AI, we can now perform complex analyses in just a few minutes, giving our clients a significant edge.”

2. The benefits of AI: Faster, better, and more efficient

AI provides numerous benefits for companies needing to comply with regulations such as DORA and NIS-2—European directives that set higher standards for risk management and cybersecurity. With AI, organisations can meet these requirements more quickly.

For instance, Bram Ketting shares: “At a financial institution, it used to take an average of seven hours to review an assurance report. With AI, we’ve reduced that to just 17 minutes. This time saving allows companies to respond to risks more swiftly and ensure their compliance is in order.”

Speed isn’t the only advantage; AI also ensures consistency. Whether analysing complex questionnaires or drafting action plans for suppliers, AI eliminates much of the repetitive work. “With AI, we can quickly determine the necessary actions based on the information received, providing more clarity and oversight,” says Ketting.

4. Challenges and risks in AI implementation

Despite its advantages, AI also comes with challenges. A common concern is data privacy and storage. Companies worry about how and where their data is processed, especially when dealing with sensitive information. “Everyone fears their data might be used elsewhere, particularly with AI models that don’t operate locally,” explains Ketting. To address this, 3rdRisk offers solutions that allow data to be processed locally, a critical feature for organisations needing to comply with stringent European regulations like DORA and NIS-2.

Another key consideration is that AI is not a one-size-fits-all solution. Harm Kuiper emphasises, “AI can automate many tasks, but the final judgement still rests with the risk professional.” This underscores the need for human expertise to ensure AI outputs are correctly interpreted and tailored to a company’s specific situation. AI should be viewed as a tool that handles repetitive tasks, enabling professionals to focus on strategic decision-making.

5. Practical tips for risk professionals

For businesses considering AI integration, Harm offers a simple first step: “Take a recent report, anonymise it, and use an AI tool to generate a summary. You’ll quickly see how AI can accelerate your work. This hands-on approach allows companies to experience the benefits of AI without significant investment.”

Want to learn more about how AI can enhance your risk management processes? Listen to the latest episode of Risk Talk, where Bram, Lars, and Harm share their insights on the power of AI in third-party risk management.