IHS Markit Response to FSB Outsourcing Consultation

We responded to the FSB discussion paper on outsourcing and third party risk. Our key points were that we urge the FSB to:

• Keep a razor-sharp focus on the practicality and proportionality of the application of their rules. Critical outsourcing requirements should be only for genuinely critical activity. Without such an approach, the extra burden on providers will increase costs, reduce competition and make services uneconomical;
• Focus on promoting the maximum consistency and efficiency of approach between sectors and jurisdictions (including on assurance and audit processes);
• Recognize that Regtech solutions have been developed that allow the efficient identification, management and reporting of third-party risks by financial institutions; and
• Be more active in supporting and working with industry utilities to grow and strengthen the pooled or shared assessments approach.

This response followed our recent op-ed on the FSB's work and the growing regulatory interest in outsourcing and third-party risk.'

Posted 11 January 2021 by David Cook, Executive Director, Regulatory Affairs

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.