Confidence is a positive signal. It shows that organisations are aware of risks and have taken steps to plan for them. But our whitepaper, Supplier Stability in Operational Resilience: Follow-Up Insights and Analysis, in collaboration with CeFPro, reveals that confidence without verification often conceals gaps in control, a reality that continues to define risk management in the financial services industry.
In our survey, while a majority of respondents expressed high or somewhat confidence in their stressed exit plans, closer analysis reveals a nuanced story. Among those who answered “unsure” about who is responsible for mitigating supplier failure, service deterioration, and concentration risk, only 22% reported being highly confident in the completeness of their exit plans. Meanwhile, just 52% said they were fully compliant with regulatory expectations around third-party risk management.
This contrast is the essence of the confidence–capability gap: high confidence does not automatically equate to full compliance or readiness.
Several factors contribute to this disconnect:
In many organisations, third-party risk is distributed across multiple teams. Legal, procurement, IT, and operational risk teams all touch on the same suppliers, but communication gaps can leave accountability unclear.
Organisations often assume that contracts and service-level agreements will hold, without verifying whether critical processes or software can be accessed in the event of supplier failure.
Confidence can arise from familiarity with suppliers or internal plans that haven’t been tested. Plans look robust on paper, but without verification, execution under stress is uncertain.
The result is an overestimation of readiness that regulators and stakeholders, particularly in risk management in financial services, cannot afford to ignore.
Bridging the gap requires turning subjective confidence into measurable capability. That means:
Ensure that responsibilities for mitigating supplier risk are clearly assigned and understood.
Stressed exit plans should be reviewed, tested, and updated regularly. Simulation exercises and scenario planning reveal weaknesses before they become crises.
Escrow adds a tangible layer of control. By independently verifying and storing the assets needed to rebuild or run critical software, organisations can act fast when a supplier fails — reducing disruption and maintaining continuity quicker.
Survey results from the Escode/CeFPro research illustrate the power of verification. Among organisations that requested proof from their Cloud/SaaS providers and reviewed it, 38% reported being highly confident in their stressed exit plans. Compare that with 0% confidence among those who had not requested proof.
That is nearly a fourfold difference. It’s a clear signal: verification isn’t just a regulatory checkbox, it materially impacts confidence in a meaningful, actionable way.
Similarly, compliance mirrors this trend. Organisations that validated supplier arrangements were more likely to report full compliance with third-party risk frameworks, demonstrating that verification is directly tied to regulatory alignment in the financial services industry.
Organisations are actively thinking about resilience and risk, but now is the moment to move from theory into practice.
Focusing on verification, accountability, and visibility transforms confidence into capability. It ensures that stressed exit plans are not only documented but executable under pressure. That is what regulators and customers value: practical, demonstrable resilience across the risk management in financial services industry.
Identify dependencies, single points of failure, and concentration risks.
Make sure someone owns mitigation planning for each critical provider.
Conduct scenario exercises and review evidence from providers, including escrow arrangements.
Use each test or incident to refine processes and strengthen operational capability.
Make verification a regular part of reporting to risk committees, reinforcing accountability.
Confidence without evidence can create blinds spots. Organisations may believe they are prepared, yet struggle to manage the practical realities of supplier failure. Verified escrow and structured governance offer a tangible way to close that gap.
In a fast-moving operational environment, the ability to access critical resources, maintain continuity, and shorten recovery time isn’t optional, it’s a differentiator. Those who embed verification into their resilience planning gain not just confidence, but true control.
Download the Whitepaper: Supplier Stability in Operational Resilience: Follow-Up Insights and Analysis to explore how verification strengthens resilience and closes the confidence–capability gap.
Discover how financial stability and compliance readiness intersect in the supply chains of the financial services industry.
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