AML Conversations
Beyond Legal Risks in Third-Party Risk Management
Feb 19, 2025
Mossimo Bronzetti, a seasoned legal expert in AML and third-party risk management, discusses the evolving landscape of third-party risk. He emphasizes the critical importance of reputational risks, especially in the age of social media, while outlining how these risks can significantly impact consumer-focused businesses. The conversation also delves into emerging legal risks tied to new regulations like the EU Corporate Sustainability Reporting Directive, highlighting the need for organizations to adapt their risk assessments to ensure sustainability and ethical standards.
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Quick takeaways
- Organizations must prioritize reputational risks alongside legal compliance in their risk management strategies due to the speed of social media impact.
- Comprehensive due diligence on third-party relationships is essential for managing reputational concerns and adapting to evolving regulatory standards.
Deep dives
The Growing Importance of Reputational Risks
Reputational risks have become increasingly critical for organizations managing third-party relationships. The impact of social media has amplified the speed and scale at which reputational damage can occur, often outweighing the consequences of criminal liability. For instance, a company may be acquitted of legal charges, but a scandal's negative publicity can linger and disrupt its operations immediately, thus affecting customer perception and trust. Organizations must recognize that reputational concerns should be prioritized alongside traditional legal compliance in their risk management frameworks.
