Risk management solution providers and what their customers really want – CreditRiskMonitor

As part of our Q4 research into supplier risk, third-party and supply-chain risk management (TPRM/SCRM) and the solutions that support it, we have not only conducted analyst- and market-led research in the shape of analyses, advisory, definitions and webinars, but taken the pulse of the practitioners who use that technology and who deal with risk on a daily basis (for example here and here). To round off that perspective we’d like to engage the thoughts of the solution providers themselves, particularly in terms of how they believe their customers perceive risk and what they want from today’s solutions.

Visit our In-Depth Guide to Risk Management for an explanation of this complex environment.

For today’s vendor viewpoint we asked Mike Flum, CEO of business intelligence and predictive financial risk analytics firm CreditRiskMonitor:

Have you witnessed a significant change of appetite for risk-related tech over recent years from your customer base and what are their primary areas of risk concern?

“Yes, we have witnessed a noticeable shift in appetite as macroeconomic and geopolitical environments have become increasingly concerning.

“We have noticed that there is a dearth of processes regarding the ongoing financial monitoring of vendors within the supply chain functions. Most organizations seem to assess financial risk as part of an onboarding process and that is the end unless there is a trigger like a quality or logistics issue related to the vendor. In our experience, many companies start showing financial risk warning signs before they have quality fade or logistics issues as typically financial distress causes cost-cutting in QA, personnel, safety, R&D and CapEx (maintenance and expansion). Additionally, scoring private companies is a constant need as well as tier mapping. We have also found that many of the Supply Chain teams are unqualified to conduct financial analysis and have requested text-based narratives to explain the potential issues with a vendor.”

How has the evolution in customer needs influenced your product?

“We have begun work on entity and relationship extraction to support public disclosures of tier relationships that would allow us to surface tier connections currently protected by NDAs with clients. We have launched our Confidential Financial Statements Solution that allows subscribers to securely upload or invite their counterparty to securely upload financial statements to be automatically scored, spread and peer compared for those private companies without coverage by leveraging buyer power. Finally, we are working on using self-hosted AI including more traditional NLP and LLM/SLM models to turn detailed financial ratio information into more easily digestible narratives. We had already provided material questions to ask suppliers based on such figures, but this new version will also include peer norm comparisons and important news.”

Many thanks to CreditRiskMonitor for sharing their observations. At the end of our series our analysts will consider both the vendor and practitioner contributions we have received and summarize the findings from the authors’ perspectives.