On 22 June 2023, the Financial Stability Board (FSB) published a consultative document on enhancing third-party risk management and oversight: a toolkit for financial institutions and financial authorities.
The toolkit has been developed against a backdrop of digitalisation of the financial services sector and growing reliance of financial institutions on third-party service providers for a range of services, some of which support their critical operations.
The FSB has developed this toolkit for financial authorities as well as service providers for their third-party risk management and oversight. The toolkit aims to reduce fragmentation in regulatory and supervisory approaches across jurisdictions and different areas of the financial services sector, thereby helping mitigate compliance costs for both financial institutions and third-party service providers and facilitate coordination among relevant stakeholders.
The toolkit:
- Presents a list of common terms and definitions.
- Sets out tools to help financial institutions identify critical services and manage potential risks throughout the lifecycle of a third-party service relationship.
- Sets out financial authorities’ current and developing approaches and tools for supervising how financial institutions manage third-party risks, and how they identify, monitor and manage systemic third-party dependencies and potential systemic risks.
The deadline for comments on the consultative document is 22 August 2023.
