Financial services third-party risk management is no longer just about operational efficiency, it’s a regulatory compliance imperative.
Banks, insurers, and investment firms are under increasing pressure from OCC, EBA, Dora and PRA guidelines to demonstrate robust oversight of their vendor and supplier networks.
The challenge? Private suppliers, which make up a significant share of these networks, are often less transparent and disproportionately at risk of financial distress.
RapidRatings Financial Services Risk Calculator gives you instant visibility into your most critical third-party sectors and insights your business needs to accurately prioritize risk assessment.
The Current State of Financial Services Supplier Risk
RapidRatings’ analysis of a representative financial services organisation shows:
- 21% of all suppliers are in financial distress before tariffs
- Private suppliers have a 27% higher frequency of distress than public suppliers
- Tariffs push overall distress up with certain sectors seeing sharper increases
- In some key supplier sectors, private company distress is more than double public company distress rates
Where Third-Party Risk Is Concentrated
Key supplier sectors for financial services with elevated third-party risk include:
- Software Publishers: private supplier distress at 39%
- Computing Infrastructure & Data Processing: private distress at 30%
- Computer Systems Design: private distress at 25%
- Credit Intermediation & Related Activities: distress levels over 20%
Run the risk calculator to see more supplier sectors.
These aren’t minor vendors, they’re critical to banking infrastructure, cybersecurity, payments, and client service delivery.
Why This Matters for Compliance and Resilience
Regulatory frameworks and guidelines expect financial institutions to:
- Identify financially at-risk suppliers proactively
- Assess risk beyond contractual performance metrics
- Demonstrate contingency planning for supplier failure
- Monitor risk continuously, not just at onboarding
RapidRatings supports these requirements by providing:
- Full supply chain visibility across both public and private suppliers
- Quantitative ratings of private and public suppliers based on their financial statements
- Benchmarking against industry peers to identify exceptional exposure
- Portfolio analysis to monitor trends over time
Turning Third-Part Risk Data to Action
With early warning signals like cash ratio, leverage, and operating margin gaps, you can:
- Flag suppliers needing deeper due diligence
- Inform board-level risk reporting and disclosures
- Build evidence for regulatory audits
- Target supplier diversification where it matters most
Third-Party Failure and Regulatory Scrutiny
In financial services, the cost of a supplier failure isn’t limited to operational downtime, it can mean regulatory fines, reputational damage, and client trust erosion.
RapidRatings Financial Services Risk Calculator gives you a data-backed view of where your third-party risk is highest.
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Run the Risk Calculator now, for free, then talk to RapidRatings about how we can protect your businesses from third-party risk. It’s 60 seconds you won’t regret.
