In this episode of Third Party Risk Perspectives, Elliot Berman is joined by Christopher Sindik of Blue Umbrella to break down the latest trends shaping due diligence and third-party risk management in 2026. Drawing on real client data and global insights, they explore how shifting supply chains are driving a 15% migration in due diligence activity across regions, particularly toward India and Latin America.
They also discuss the growing demand for deeper investigative methods, including reputational inquiries and on-the-ground site visits, which have seen a notable rise as organizations seek to validate what can’t always be uncovered through desktop research alone.
Finally, the conversation dives into the growing importance of identifying ultimate beneficial ownership (UBO), as organizations go beyond surface-level ownership to uncover hidden risks amid evolving global regulations.
Whether you're navigating new markets or strengthening your compliance framework, this episode offers practical insights to help you stay ahead of emerging third-party risks.
Recent Trends in Due Diligence - Transcript
Elliot Berman: Hi, I'm Elliot Berman from AML RightSource, and I'm here with my colleague Chris Sindik from our Blue Umbrella line of business. And we're here today to talk about recent trends in due diligence as they relate to third-party risk management. So Chris, good to talk to you again. We've done a number of these podcasts.
Let's start at a high level. What are some of the due diligence trends you're seeing based on the data that we have, because we have a lot of clients and can look across a broad spectrum of businesses?
Chris Sindik: First I'll say it's a pleasure to be speaking with you again, Elliot. It's always a highlight of my day when we get to talk about these very interesting topics here, too. It's not often people are this interested in due diligence. But certainly, I think we have some great information for us and our audience today.
And, part of the reason that this sort of podcast idea came to me about the trends, is that Blue Umbrella is very uniquely positioned to have a little bit more of a hub of information based on what we're seeing across our clients. And certainly, if there's a client listening we're using very high level data here. That unique position that we have is that we can look at some trends, pull out some things that are, unique to us as a provider, something that might be useful for our listenership to know about.
To the question on what are some of the due diligence trends that we're seeing as we get into the meat of 2026. And I really think there's three main areas that we want to focus on today. One that we do just for our own purposes that, everyone can understand is, the migration of where reports are being ordered.
That certainly has an impact on our business and how we resource if people are ordering reports less so in Russia and more so in Mexico, for example. That might be something that would cause us to change the way that we operate and staff up and make sure that we can meet client demand.
Point number two would be, a little bit more of a niche offering that, that we provide. Niche meaning that it's not, ordered on an extremely high degree of reports, is still there and then certainly very useful when needed, which are reputational inquiries.
And what we mean by reputational inquiries is, say someone ordered a report on a company, and we'll get the corporate registry, we'll get the court records, we'll do the adverse media, all these types of things and that's certainly good to have the official and unofficial sources. But the reputational inquiries are where we will call around.
We have a pretty good network of business partners to say, "Hey, have you heard of company ABC? Oh, okay, you have? Great. What are their operations like? How long have they been around? Have you heard about any negative issues in the past? Oh, okay, what were they? Do you know the people that are running the show? It shows here that Elliot is the CEO. Is he really the person in charge? Oh, no, there's this other person, Chris, that's around all the time. Tell me a little bit more about him." The word on the street and certainly, by the nature of it, it is unofficial.
It's sometimes a little bit of rumor perhaps, but still very useful. And if a company has a low profile or if there are some really unique things that you wan to know about, that's a good way to go about it. So we're seeing more of those type of reputational inquiries as well as site visits.
We're in the open source intelligence game most of the time. But sometimes it can be really beneficial to walk up to an office, see what it looks like. Is it active? If it's in a certain industry, are there trucks in the yard? Do they have any equipment? Do they have a warehouse? Is it in an apartment? These sort of enhancements to the desktop research a lot of times it gets done. So that'd be point number two.
The last point to highlight would be more of an interest in ultimate beneficial ownership information. Sometimes it can be good to know the immediate shareholders of a company, but sometimes that is not sufficient. So if company A is owned by company B, okay who owns company B? Okay, company B is owned by company C. Who owns company C? And, peeling back the layers of the onion until you get to a natural person. And that can be really useful, not just from a risk management perspective and know your customer, know your supplier. But from a regulatory standpoint as well. 50% rule, various international laws where that is becoming more and more relevant.
So I'd say those would be the three trends that have stood out to me.
Elliot Berman: Let's take a deeper look at each of those. You went somewhat deep on the reputation inquiries, but let's go back and start with the migration of reports from one geography to another. You gave some examples, but my sense is that there's probably a little more there.
Chris Sindik: Sure. One of the trends that we've seen is there's been a migration of 15% of reports from PRC, Hong Kong, Taiwan et cetera, Mandarin and Cantonese-speaking countries to other parts of the world. India and Latin America being the ones where we've seen the biggest increase. And it can't always be a one-for-one exchange. It's very difficult to prove causality when looking at these types of things. But, when you look at one growing and one diminishing you might say that things are migrating from China and the surrounding areas to India and Latin America.
So again, around 15% or so is what we've seen at a high level. And, we've certainly adjusted accordingly because of it. Why exactly that could be happening, that might be an interesting topic of discussion. Certainly there have been headlines about that, which we can dig into a little bit more.
Elliot Berman: So I'm going to assume that some portion of that migration is the result of the various tariff activities that have happened both here in the US, but also in many other parts of the globe. , Changing their tariffs, instituting new tariffs, all of those kinds of things,
and I'm not an economist, but all of those kinds of things do have an impact on cost of goods sold. And to the extent that you can move to a lower tariff environment or a lower cost environment, that may be a reason that, you've changed your supplier relationship.
Chris Sindik: Yeah for sure. I think that the tariffs that you talked about that is certainly one of the likely reasons for that. Who knows for sure? But, if you think about it from a business perspective if it's more difficult or riskier to operate in one region we might start to look at alternatives. Whether that is an immediate shift in business activities or preparing for what might happen. And if there are big tariffs in one place, okay, we want to keep our prices down. We want to protect our margins. We might look at some of these other parts of the world.
Specifically if it is a North American-based company, Latin America's right there. It's a little bit closer geographically, as we look at increased fuel prices too. That can certainly be an impact too, trying to get things a little bit closer to home.
And looking at other areas where, you might have an established supply chain and just business continuity outside of the risk of it. It could be we need a steady flow of widgets, and we can't risk suddenly being cut off 'cause everything folds like a house of cards at that point. So we need something that's just a little bit more reliable. We know that finances aren't gonna cut off. The financials of the supplier, distributor are sound.
It cannot just be a supplier as we're thinking about it in this context where tariffs would come into play a little bit more. But with distributors, with customers, with sales agents too. It can also be, not getting products into the company, but getting products out of the company.
And looking at some of these other markets that maybe weren't as appealing before, and they're suddenly opening up and seem to be more and more appealing now to grow the business. So it can be looking at some of those more friendly emerging markets to grow the business in new ways that were maybe thought of as too risky before or too expensive. Maybe they're becoming more open to do business in. So that can be another factor as well.
Elliot Berman: So shifting now to the comments you made about increased interest in reputation and boots on the ground, word on the street, site visits, things like that. Do you have any numbers to go with kind of year over year in terms of the increases that you're seeing?
Chris Sindik: So far of what we've seen this year is roughly about a 20% increase in interest in this particular add-on to our due diligence reports. And I think that's very interesting. I did want to give a little bit of a preface because reputational inquiries can mean different things for different people as well as a site visit, too.
Typically with the site visit it is what I mentioned, where you'll, go to the public areas around, or in an office building to see what is happening there. There's been some stories that I've heard over the years which are very interesting, would make for a good novel one day, but, it can be a situation where it might be in manufacturing, for example, and there is a company that might have, very bulky goods.
And they say they're a $50 million business, and they have a lot of inventory and all these types of things. And you go and visit them, and it's an office the size of a restaurant,, or it's in a residential area. That's where the warehouse was supposed to be. It just doesn't make sense.
That 20% increase that we're seeing it really points to the fact that when companies are thinking about doing business with a certain type of third party, whether that's a customer or a supplier, whatever it might be, that they need to have that deep dive approach on it, that boots-on-the-ground approach, where they have some more reassurance around it.
It's all about staying one step ahead of the bad actors, where, if someone wanted to be fraudulent, and they wanted to bilk a company out of money they, they know they have to have a good online profile, they might be able to check all those boxes. Court record's clean. They're not on a watch list, et cetera. No red flags from that. But it all falls apart when you knock on their door. So I think that's the takeaway. It's not always enough to do this type of research depending on the importance of that relationship, the physicality of it, the actual nuts and bolts of it, too. You want to make sure that it's not just a business that exists on paper.
Elliot Berman: Banks have done that for a long time in the credit space because you don't want to lend to someone who says they're in the warehousing business, and, they talk about having a 60,000 square foot facility and blah, blah, all this other stuff. And, when you drive by, it's an office building that's, as you said, the size of a restaurant. It makes a lot of sense to really know who you're dealing with. And you're right, as we rely on online profiles that's becomes really important.
In the time we have left, let's shift our focus to ultimate beneficial owner- UBO. This is something that as we talked prior to starting our recording we know is different in different geographies, so there's gonna be some variation there. But what what are you experiencing in terms of customer concerns in the UBO space?
Chris Sindik: It's a great question, and certainly with your background in finance, you know how this has and how it's, really a hot topic today. So again, this is an area, as I mentioned before, where we've seen a pretty market increase, I think around a 30% increase in interest and add-ons of this type, compared to what we've seen in a similar timeframe last year.
I think that again, looking at not just who the immediate owners of a company are, really going up the chain, looking through holding companies, various jurisdictions, it's typically not just in one country, but a variety of countries too, to get up to that person. Again, the bad actors of the world, they have gotten sophisticated just as we all have.
They know that just looking at that first layer, they're going to come out clean. But if you add another five, ten, twenty-five, thirty layers in there, not everyone's going to do that necessarily. So that can be a good place to hide. But there are ways around that.
Some of the rationale behind it, other than that have come in place around not just in the US but around the world, primarily outside of the US. There's the Corporate Transparency Act - CTA, which has changed and relaxed and is it repealed, is it not, where's it going?
That's a little bit more of a gray area. But, in the UK, there's the Companies House required UBO disclosures since last year and a few others around the world that, have more of an onus on companies to disclose their UBO information.
So it is very convenient when these new laws get enacted and there is a central database or repository to go to. However that is more the exception than the rule. What typically will have to be done to get to a UBO is pull corporate registration, and then pull another corporate registration, and then do it again and again until you can find a person.
And then too, we are working with a set of UBO information at Blue Umbrella that makes it a little bit more easily accessible. And even if the official records aren't there, there are other things that can be done, other records to look at, media reports et cetera, to try and get to that natural person.
So I think the trend is looking past that first line of ownership because if it is a bad actor, they are oftentimes advanced enough to know that there has to be levels of ownership there to hide who the true UBO is. So I think it's some of these laws that are driving and knowing that what was done previously is not always going to be sufficient today.
Elliot Berman: So in the couple moments we have left any closing insights from the data?
Chris Sindik: I think it's important as we're seeing changes, obviously our client base and even our listeners outside of our client base they're facing these challenges as well.
If they were doing significant onboarding work of third parties, customers, in one part of the world, and then they're moving to another part of the world, that creates confusion. Sometimes it creates inefficiencies. And it's also a new bucket of risks where a risk that was pretty commonplace in Hong Kong isn't going to be as much of a risk in Brazil or Argentina, but there are new risks that are uncovered there.
So I would say, first take a step back. I know that's not easy to come by these days, but to look at your own trends. Look at where things are shifting and have that expertise accordingly. Maybe it's worthwhile to have some experts that are a little bit more familiar in that new region that you're working in.
And I'd say, too, when it comes to things like reputational inquiries and UBO examinations that are done, know when it's valuable. Know when it's going to provide that additional insight to you to glean some useful information. Certainly it doesn't make sense to do on everyone all the time. But know when the flags are there that it might be a good idea to do that, because oftentimes it is worth the extra time and the extra expense to get that information.
We've all heard those horror stories of boats turning around in the middle of the ocean. It's good to learn from your mistakes, better to learn from other people's mistakes. A lot of times it is worth it.
Elliot Berman: Chris, thanks for your insights and for the chance to chat about this. I know you and I will be chatting about some other third party risk management topics in the coming months. I look forward to that. And again, thanks for today's conversation.
Chris Sindik: Great. Thank you, Elliot, and thanks to all our listeners. Talk to you next time.