(Reuters) - Bank of America Corp (BAC.N), JPMorgan Chase & Co (JPM.N), Wells Fargo & Co (WFC.N) and American Express Co (AXP.N), have created a company called TruSight to standardize the work of vetting third party suppliers and partners, according to an announcement Tuesday by the newly-formed consortium.
Increasing innovation in financial services has led to more partnerships and more risk events, which are increasingly sophisticated, according to Abel Clark CEO of TruSight and a former Thomson Reuters executive.
“There really is a challenge here that is best responded to by a joined-up industry effort,” Clark said. Financial institutions currently vet potential suppliers by sending them questionnaires with hundreds of questions. They then have to work with the supplier to be sure it understood the questions and provided accurate and detailed answers, according to Clark.
The banks then have to verify the accuracy of the suppliers’ claims through various means, including onsite visits. It is an expensive and time-consuming process with immense potential for banks and suppliers to benefit by sharing best practices and avoiding duplication, Clark said.
While TruSight currently has just four backers, Clark said “a small number” of other financial companies may be invited to invest in it in the future. Clark TruSight will begin working on behalf of clients early next year. Clark declined to disclose how much its backers have invested in the company.
Reporting by Dan Freed in New York