Automating Effective Due Diligence

Effective due diligence is a critical process that contributes to efficient business decisions and minimizes risks. However it can be a lengthy and difficult task, particularly in complex transactions. A bad experience can result in substantial financial losses. JPMorgan Chase’s $175m purchase of the startup student loan company Frank is a good example.

Effective due diligence is necessary when assessing a customer or contracting with a third party service provider. This requires a significant amount of information collection that goes beyond the basic compliance checks. It starts with an accurate risk assessment, examining factors like location, geographic area and industry sector. It also includes background checks, including ownership structures and legal history. It also involves evaluating the compliance of the third party with regulations and anti-money laundering policies.

The more a company concentrates on judgment-intensive tasks in its due diligence program and the more likely it is to be able improve its ability. It’s also crucial to automatize the routine data collection to free up time to focus on these task that require judgment.

Due diligence tools can speed up the process and help businesses save time and money while still ensuring that all checks are carried out. The best tools facilitate seamless sharing monitoring and collaboration among teams and other stakeholders. They also provide features such as security settings, version control and audit trails. They also provide an integrated, secure repository ideals for organizing, storing and accessing due diligence documents. This facilitates a smoother and more efficient workflow even across multiple jurisdictions.