How can Financial Services firms and Fintech Provides support compliance?
The use of third parties and outsourcing arrangements isn’t a new concept, but regulatory scrutiny is increasing. As a result, we have seen a global shift in Third-Party Risk Management (TPRM) regulation.
Although the PRA is arguably taking the lead within Europe, the proposals and guidelines introduced by the Monetary Authority of Singapore (MAS), Financial Stability Board (FSB) and State Bank of Pakistan demonstrate that regulators are finally taking the non-technical risks present by technology seriously.
While different organisations govern different business areas, many of the key principles across these guidelines overlap—and all are aimed at helping banking and financial services organisations to identify, assess and manage third-party IT risks.
To remain compliant, financial institutions should ensure they have pre-developed measures in place to maintain operational resilience in the event of a stressed exit scenario (ie, failure or insolvency of the service provider, service deterioration and concentration risk), as well as plans for data recovery in line with specific regional regulations, helping to ensure that sensitive and customer data is kept safe.
One way to lower risk and maintain compliance is to store business-critical information in escrow. This means that information is stored securely and can easily be retrieved in the event of any issues, ensuring continuity and availability for customers and stakeholders.
