Five 4th- and 5th-party risks that financial services firms must not ignore

When Silicon Valley Bank collapsed in March 2023, many organizations were surprised by the impact it had on them, given that they didn't use Silicon Valley Bank. The problems arose because those businesses relied on software companies that used the bank as a payroll processor. When the employees stopped being paid, they refused to work and thus stopped providing technology support to clients. This then disrupted the continuity of business operations across the wider supply chain.

It's an example that shows a potential blind spot for many organizations. With supply chains that extend beyond vendors or even vendors’ vendors, it can be incredibly difficult to understand just how far and deep your supply chain risks go. When something goes wrong, it can be sudden and severe.

In this white paper, FiscalNote Global Intelligence explores the nature of these fourth- and fifth-party risks in the financial services sector. We consider the drivers for these oft-hidden risks and their impact on financial services firms including banks, and we discuss the human and technological solutions that can help to mitigate risks and protect business.