KPMG has launched some potentially groundbreaking analysis into the risks companies face when they enter into new business relationships. KPMG’s Astrus Insights, which analyzes some 8,000 integrity due diligence reports on third party relationships, covering 172 countries, has found that the Financial Services sector is the most exposed of any industry to the threats of fraud, corruption, insider trading, negligence and bankruptcy. Additionally, the analysis has shown that third party risks have an impact across many sectors with bribery and corruption identified as a key risk.
KPMG’s Astrus Insights analysis provides a clear indication that companies need to take extra care in performing appropriate risk-based due diligence of third parties and better manage the risks associated with them, otherwise they could open themselves up to significant risks.
Prevalence of risk: KPMG’s Astrus Insights reveals nine in ten of our integrity due diligence reports on subjects across all sectors identified some kind of risk that warranted further review: 23 percent of reports highlighted significant integrity risks.
Fraud is the number one risk: Fraud is the most prevalent risk associated with third parties.
High bribery and corruption risks: Bribery and corruption remains a key risk in certain sectors. It was a key factor in more than 30 percent of reports across the Technology, Media and Telecommunications; Energy, Natural Resources and Chemicals; and Miscellaneous (general trading) sectors.
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