5 Signs You’re Wasting Money on Due Diligence

Maximize your due diligence budget by ensuring that you aren’t making these costly mistakes.

1. You aren’t using a risk-based approach

Save your budget for higher risk relationships. Build a defensible due diligence program based on an analysis of risk factors, not your intuition. You may not need to screen all of your third parties. Alternatively, a low level review such as a denied parties/PEP screening may be enough in many cases. TRACEsort, available free of charge to TRACE members, allows users to easily designate risk tiers and initiate the due diligence process automatically.

2. You’re skipping training

You’ve conducted the due diligence screening but are you confident that your third parties are accurately trained to recognize and respond to bribery risk? Working with third parties continues to pose the highest corruption risk for a company so ensuring they are accurately trained is critical to the success of your compliance program. Our customers choose TRACE Certified Due Diligence because it includes global anti-bribery compliance training for up to 40 of the third party’s employees. 

3. You’re not addressing red flags properly

Identifying red flags isn’t enough. That’s why we work directly with third parties to resolve red flags whenever possible and save you time so that you can focus your resources on addressing those that may need to be evaluated based on the nature of a transaction or relationship. To learn more about red flags and what they mean, download this white paper.

4. You’re not asking your third parties to pay for their own due diligence

Increasingly, companies are requiring their third parties to pay for their own due diligence as there are many benefits for the third party (from escaping duplicative reviews to opening the door to new business opportunities). Both TRAC, our 24-hour entry level screening, and TRACEcertification allow multinational companies to shift screening costs to the review candidate. Our customers save over $54,000 annually by incorporating TRACEcertification into their due diligence program.

5. You don’t outsource

By outsourcing the initial questionnaire/data collection and identification of red flags, your in-house compliance team will have more time to:

• review each third party relationship based on your company’s risk profile and appetite;
• develop strategies to mitigate specific risks to your company; and
• conduct additional in-person due diligence and training for higher-risk third parties.

For two decades, TRACE has helped multinational companies spend less while enhancing their compliance and due diligence practices. If you’re reassessing your budget at this time, speak to one of our experts to see how we can help you.