The Supplier Assurance Framework is the product of an initiative
from the Cross Market Operational Resilience Group (CMORG) which
leads financial sector-wide collective action on operational
resilience and is co-chaired by senior executives of the Prudential
Regulation Authority (PRA) and UK Finance. CMORG considered the
problem of collective supplier assurance and asked UK Finance with
assistance from
KY3P® to develop a framework to find an efficient and highly
cost-effective solution for financial sector firms to assess
suppliers’ operational resilience in a collaborative way.
The framework will be launched on 2 March and will be made
freely available to firms and suppliers on the UK Finance website.
It follows a successful proof of concept with five of the largest
UK banks and five global suppliers to the financial services
industry. Detailed assessments of the five suppliers were
undertaken against the framework and shared for consumption by all
five banks, reducing the effort required by the suppliers by 80% in
just the initial proof of concept.
The framework provides a sound foundation for a “pooled audit”
which the PRA, in its Supervisory Statement (SS2/21), states are
“more efficient and cost effective for (financial services) firms
and less disruptive for service providers. Pooled audits will also
help spread costs and disseminate best industry practices with
regards to audit methods among (financial services) firms.”
At present, UK financial services firms use a relatively common
supply base but slightly different assessments for onsite
assurance, risk rating and remediation. The current approach has
contributed to supplier frustration with some citing capacity and
prioritisation constraints. In addition, within the current
framework, firms are not fully leveraging opportunities to
collaborate to identify common supply chain risks and improve
visibility.
“When fully implemented, the Supplier Assurance Framework will
allow suppliers to store and reuse responses, reducing duplicative
processes and optimizing the workflow for the on-boarding and
due-diligence process,” said Richard Blore, Chief Executive
Officer,
KY3P®, IHS Markit. “We are delighted to work with UK Finance on
the new standards which will raise the bar on control standards
across the industry and will move the industry towards a
sustainable solution that delivers a more resilient and robust
supply chain.”
Ian Burgess, Director of Cyber and Third Party Risk at UK
Finance said “UK Finance is delighted to launch the Supplier
Assurance Framework and wish to express our thanks to
KY3P® for the expertise they have brought to it. This is an
important issue for our members, and we hope that by making this
framework available to the whole sector and its suppliers that it
will help enable a more collective approach to supplier
assurance.”
Benefits of the Supplier Assurance
Framework
UK Finance brought key financial firms together on behalf of the
industry to address concerns relating to operational resilience in
their supply chain. This collaboration benefits financial firms and
suppliers alike by:
• Building a networked community of financial firms and their
suppliers
• Driving industry convergence on common approaches to achieve
assurance of suppliers’ operational resilience
• Introducing an industry standard operational resilience risk
framework to help suppliers identify key risks to their
clients
• Encouraging suppliers to work with their financial service
clients to mitigate risks
• Driving efficiency and effectiveness
• Promoting the use of an industry standard framework that allows
suppliers to be prepared with responses and evidentiary
documentation, and minimises supplier efforts responding to
multiple flavours of questionnaire
• Reducing turnaround times and improving due diligence information
on suppliers
• Building confidence in supplier relationships
IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.
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