CP138 - Consultation on Cross-Industry Guidance on OutsourcingMarch 2021
The Central Bank of Ireland’s, (CBI), Strategic Plan 2019-2021 sets out its mission, vison, and mandate. The mission of the CBI is to serve the public interest by safeguarding monetary and financial stability. The CBI works to ensure that the financial system operates in the best interests of consumers and the wider economy. Managing outsourcing risk is seen as essential by the CBI from both a prudential and conduct perspective.
When companies outsource activities, they create a dependency on a third party. This dependency could influence operational activities and the quality of products or services delivered to consumers. Both national and European regulators and supervisors have examined this area and there have been numerous publications on the topic, sample listed below:
- European Insurance and Occupational Pensions Authority (EIOPA) Guidelines on Outsourcing to Cloud Service Providers (EIOPA-BoS-20-002);
- European Securities and Markets Authority ESMA 50-157-2403 Guidelines on Outsourcing to Cloud Service Providers (Final - December 2020); and
- Financial Stability Board (FSB) Discussion Paper - Regulatory and Supervisory Issues Relating to Outsourcing and Third-Party Relationships.
The CBI recognises that many firms rely on outsourced service providers both intragroup entities and third-party ones. The purpose of the guidance is to “assist regulated firms in developing their outsourcing risk management frameworks so as to effectively, identify, monitor and manage their outsourcing risks.” The deadline for providing comments to the CBI is 26th July 2021.
For the Consultation Paper and link to the Guidance please see: Consultation Paper CP138