This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

ISG Research: Financial Services Firms Lack Adequate Governance

Stocks in this article: III

STAMFORD, Conn., Feb. 6, 2013 /PRNewswire/ --  Information Services Group (ISG) (NASDAQ: III), a leading technology insights, market intelligence and advisory services company, today released research concluding that many financial services organizations are ill-equipped to manage risk in their supply chains and poorly prepared to face increased scrutiny from regulatory bodies.

"Financial services institutions face significant supply chain risks due to their reliance on elaborate networks of first-, second- and third-tier suppliers to manage critical processes and operations," said Peter Lauer, Partner, ISG. "At the same time, regulators are subjecting firms to increasingly rigorous compliance audits, through initiatives such as Dodd-Frank, as well as through stricter enforcement of existing standards."

In many cases, Lauer adds, enterprises facing a regulatory audit lack the capability to demonstrate effective oversight and governance of their supplier networks.

"Banks and insurers often don't know what they don't know about their supply chain risks," said Lauer. "While they may have processes and reporting requirements defined, significant gaps exist between what's documented and what's actually used to make decisions and manage suppliers and service delivery."

The growth of multi-sourcing, coupled with increasingly shorter deal terms, has contributed to this problem, as the data collected and processes put in place during pre-contract due diligence quickly become obsolete as contracts expire. Another issue is non-standard systems and reporting requirements that fragment the delivery chain and make it difficult to aggregate information or define accountability when a problem occurs. 

As a result, rather than ensuring coordination between the myriad entities and touch points involved, governance and supply chain risk management efforts are often limited to addressing discrete risks or solving isolated problems.

As a first step in addressing these issues, ISG recommends an assessment of existing governance frameworks to prioritize critical needs and identify potential solutions.  Over the longer term, bringing together client and supplier teams to facilitate collaborative discussion can allow all parties to build a holistic view of service delivery and the interrelationships along the service delivery chain.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs