Effective Risk Management and Assessment

What is Vendor Risk Assessment?

Vendors are an essential and often unavoidable part of modern business. Companies are not always equipped to complete every step of their business operations, so they need to bring in third-party vendors to complete these tasks. Companies can select various lenders to complete practically any aspect of their business operations. 

While third-party vendors provide incredible value, some risks come with vendors. There are risks that potential vendors are not legitimate businesses, or the vendor has issues with data security. Vendor risk assessment is especially important for financial service companies that handle sensitive financial or identifying information on behalf of their clients. 

Fraud and data breaches are also more common than ever before, as hackers and fraudsters constantly challenge systems. Financial services companies must ensure that their vendors have the proper security and reliability to meet these challenges. And vendor risk assessment is perfect for protecting your company from any potential challenges from working with a specific vendor

Essentials for Vendor Risk Assessment

Businesses must tackle many different considerations in order to conduct an effective risk assessment. Companies must ensure that their vendors are financially sound and not at imminent risk of financial problems. Having a vendor fall on hard times means you wasted all the time finding and building a partnership with that vendor and have to spend more time finding a new vendor. 

Companies must be able to assess a wide range of data to adequately determine a vendor. This is essential as vendors vary widely in industry and business operations, and one data set will only fit some potential vendors. You also need to be able to verify the identity and information that you collect from vendors. Fraudsters are constantly compromising companies, and you must ensure that you only work with legitimate vendors. 

Regulation compliance by vendors is another factor companies must consider. This is especially important for financial service companies that have to meet stringent financial regulations. Companies also need real-time monitoring to ensure their vendors are not compromised or pose potential risks to their business

Risk Assessment with Under

With Under, assessing vendors' risk properly is easier than ever. To accomplish this, we provide you with a ton of handy tools that enable you to analyze every risk factor that a potential vendor has. Thanks to our incredible partners and their tools, you can reliably build risk assessments without bouncing around between multiple systems. 


Firstly, you must ensure that the vendors you are considering working with are legitimate businesses. This is especially true for financial services with strict anti-money laundering requirements. Fortunately, our Middesk integration makes it incredibly easy to conduct business verification properly. 

Middesk business verification is very comprehensive and provides extensive information to give you a clear picture of a potential vendor. This information includes web presence, tax ID number, litigations, and bankruptcies. Middesk keeps an extensive database of businesses, allowing business verification to happen in real-time without having to wait for extended periods of time for data to be collected. 

Additionally, Middesk enables your business to monitor this information consistently and be vigilant for any changes. Compliance monitoring is automatic and straightforward, thanks to this feature. Middesk also constantly updates its databases, ensuring you always have the most up-to-date information on your vendors


Understanding a vendor's financial well-being is critical to determining its legitimacy. With iSoftpull, your business can check vendors' credit scores with remarkable ease. More specifically, iSoftpull focuses on providing soft credit score reports that provide various advantages for accurate risk assessment. 

A soft credit score pull requires less information than a hard credit score pull, making it easier to implement. Additionally, these soft pulls do not harm vendors' credit scores, which increases the likelihood of vendors agreeing to have their information pulled in the first place if they know the effort will not harm their credit score. 

You also get access to all the same information you get from a challenging credit score pull. ISoftpull accomplishes this by collecting data from TransUnion, Equifax, and Experian. FICO scores also come with an iSoftpull report, which can be easily updated to reflect the credit state of your vendors


Ekata is another excellent tool you can access with Under. With features such as address verification, you can check whether addresses provided by vendors are associated with any potentially fraudulent activity. This helps prevent fraudsters from using fake identities to pretend they are legitimate vendors in order to access your company's information. 

Ekata accomplishes this by checking whether an address has repeatedly been associated with suspicious business activity. You can also conduct phone verification with Ekata when vendors provide you with a phone number. Like address verification, Ekata checks whether that number has been associated with fraudulent activity. 

Phone verification is also a low-friction way to assess vendor risk, allowing you to begin working with vendors as soon as possible. You can also determine what other businesses have interacted with that phone number. Holistic verification, such as phone number and address verification, are handy for conducting practical vendor risk assessments


Plaid is another incredible identity verification tool you can access with Under. With numerous features, such as anti-money laundering and politically exposed persons, Plaid is a great asset for companies that have to meet intensive regulatory requirements. Plaid also embeds risk analysis directly into its system. 

With Plaid, you can also conduct vendor transaction analysis. You can see transaction histories associated with a vendor's ACH number. This feature can prevent ACH fraud and costly ACH returns. It is also easy to verify a vendor's bank account information and confirm the source of a vendor's funds. 

Plaid's tools are easily scalable, ensuring that you can easily integrate with new vendors as your business grows. Additionally, these features are completed in real-time, allowing you to get started quickly with a new vendor

Final Thoughts

Vendors are an essential part of business, and companies must ensure that they do not put them at risk. That is where Under Steps provides you with so many amazing risk assessment tools from a variety of companies in one integrated system. Together, Under allows you to assess your vendors for risk in real time, maximizing security and efficiency. 

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