Revisions to the principles for the sound management of operational risk (issued 2021)

The document emphasizes that banks should have a comprehensive understanding of the operational risks associated with outsourcing arrangements and ensure that effective risk management policies and practices are in place to manage the risk in outsourcing activities.

“While recourse to entities such as, but not limited to third-party service providers can help manage costs, provide expertise, expand product offerings, and improve services, it also introduces risks that management should address. The board of directors and senior management are responsible for understanding the operational risks associated with outsourcing arrangements and ensuring that effective risk management policies and practices are in place to manage the risk in outsourcing activities.”

Read the full guidance

Source Regulation