Press Release

Refinitiv survey exposes severe lack of due diligence on business supply chains in India

Supply chain

Research in India shows 43% of third-party relationships are not subject to any form of due diligence checks, as companies struggle to monitor third-party risks and protect themselves and their supply chains in the post COVID-19 environment.70% of Indian corporates agree that the current economic climate is encouraging organisations to take regulatory risks to win new business

Refinitiv, one of the world’s largest providers of financial markets data and infrastructure, has published the findings of its fourth Third-Party Risk Survey. The report highlights the pressures that organizations face when managing risk associated with third-party relationships, intensified by managing an average of almost 10,000 of these relationships across the world and reveals the hidden dangers in supplier, distributor, and partner relationships. In particular, the report showcases the significant threats COVID-19 poses to third-party risk management and supply chain stability, potentially exposing companies to fraud and threatening their business operations.


The findings of the report are based on a survey completed by nearly 1,800 global third-party relationships, risk management, and compliance professionals in corporate organizations. Nearly 107 respondents from India at a corporate level contributed to the global survey that was conducted by an independent consulting firm. The research was conducted in February 2020 across 16 countries, including India, UK, USA, Brazil, China, Australia, Germany, France, Singapore, Spain, Hong Kong, South Africa. Russia, Saudi Arabia, the Netherlands, and Canada.


Despite greater regulation and stringent enforcement action, the report finds that organizations are struggling to gain visibility over third-party risks and take appropriate action. Organisations are not adhering to a full third-party due diligence at either onboarding or ongoing monitoring stages. This is compounded by competitive pressures, greater globalization, and increasingly complex supply chains. India specific findings from the survey state that on an average 43% of third parties do not receive appropriate due diligence checks as against 41% in China and 43% globally. Overall there has been an increase of 6% globally compared to the responses garnered in Refinitiv’s 2016 Third-Party Risk Survey.


In order to better understand the risk aspect, organizations will have to report all the breaches. When it comes to reporting a third-party breach, 55% of Indians would report internally, and only 16% said they would report it externally. From a regional perspective, findings from China state that 78% would report a breach internally but are among the least likely to do so externally with only 8%. However, global findings state 53% of respondents would report a third-party breach internally and only 16% would report it externally.


Even with greater regulation and stringent implementation, organizations are finding it difficult to gain visibility of all third-party risks to facilitate suitable action. Nearly 70% of Indian respondents are aware of enforcement action that can be initiated against their company for any third-party risk aspect, as compared to 77% in China. While 50% of all the respondents mention that they are aware of the enforcement action against their company basis of the last survey, the percentage has slightly dropped globally suggesting that while the regulations have become stringent so has the challenge.


COVID-19 is set to have a substantial impact on the risk landscape, particularly in terms of supply chain and third-party risk. The survey reveals, global supply chains can create competitive advantages for businesses and cut costs for consumers, but they also carry significant risks. If businesses do not have a clear insight into all levels of their supply chains and the ability to conduct due diligence quickly and easily,

they cannot hope to mitigate or manage their risk. 71% of Indian respondents have stated they do have the knowledge of the extent to which third parties outsource work while only 57% of respondents in China are aware of the same and globally there has been a slight decrease in the overall percentage.


CSR and supply chain sustainability is identified as being important by nearly a third of respondents in the global survey. The use of green regulations to inform decisions on third party risk management has increased compared to the finding from the last report. Nearly 40% of Indian respondents consider CSR as an important reason to conduct due diligence as compared to 34% in China. The rising importance of green issues is also included in the report. When surveying institutional investors, 84% stated that ‘greenwashing’, by providing misleading environmental credentials, is becoming increasingly common.


Further, the report also captures that only 16% of Indian respondents stated they had sufficient knowledge of the risks associated with pandemic and epidemics and 70% of Indian respondents agree that the current economic climate is encouraging organizations to take regulatory risks in order to win new business. Also, 75% of Indian respondents are aware or suspect that third parties they conduct business with may have been involved in a range of illegal, environmentally damaging activities, globally about 65% of respondents know or suspect that third parties they conduct business with may have been involved in a range of illegal, environmentally damaging activities.

“As regulators increasingly focus on sanctions, corruption, sustainability, and human rights, companies must upgrade their risk management capabilities in order to continue to reap the benefits from working with third-parties”, said Charles Minutella, Head of Enhanced Due Diligence at Refinitiv.

To download the Refinitiv report ‘The Real Risks: Hidden Threats within third-Party Relationships’, please visit:

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