Author: Paul Coltman, Service Delivery Manager
In the wake of increased focus regarding regulated firms’ outsourcing processes, and in line with the European Banking Authority’s guidelines on outsourcing, the CBI’s Cross-Industry Guidance on Outsourcing is now taking effect.
The focus on outsourcing is now a necessity due to its increasing dominance across the financial services sector, and it is expected that financial service firms undertake regular Outsource Service Provider (OSP) due diligence reviews, in line with their code of conduct.
The Guidance is relevant to all regulated firms that outsource to third parties and explains that appropriate and proportionate due diligence reviews, that also factor in any offshoring and jurisdictional considerations, should be conducted before entering into any contractual arrangements. More specifically, it states that regulated firms should also ensure that third parties have the capabilities and authorisation to execute any critical and important undertakings, in a professional and reliable way.
How due diligence is configured will vary from firm to firm, depending on the configuration of their supply chain, but the OSP’s business model, nature, sale, complexity, financial health, ownership and group structure must be considered.
Understanding your suppliers before entering into a procurement contract is vital to mitigate against any risks but it requires effective monitoring, management and a robust application framework to ensure success. To build supply chain trust and confidence, you need to understand all the potential hazards.
The financial services industry operates in an increasingly complex and interconnected way, with the procurement of services both locally and internationally. Business continuity and operational resilience is paramount, therefore continuing to detect and address any supplier weaknesses and vulnerabilities is important, so your organisation can withstand any unforeseen shocks or crises that may occur.
With Hellios, a dynamic, independent assessment process is undertaken to ensure that third party information is proportionate to the goods and services being supplied to industry buyers. This annual supplier due diligence subscription allows suppliers to easily maintain their information for the financial institutions they work with. This can also be supplemented by Hellios’ on-site supplier auditing function conducted by Deloitte, when more detailed due diligence is needed to demonstrate regulatory supplier compliance.
Does the resilience of your supplier network make the grade? Find out with Hellios and join AIB, Bank of Ireland and Permanent TSB in the FSQS community.
Click here for more information on FSQS,Tags: CBI Guidance on Outsourcing, Financial Sector