Outsourcing and Third Party Management
When firms look for efficiency gains both in quality of operational delivery and to reduce headcount expense, outsourcing key operational workloads to third parties is increasingly common. However, it rarely turns out to be the dream solution!
For financial services firms this is a dangerous activity because the firm and its management remain accountable even if they are not responsible for an outsourcer failure. The FCA say “A firm cannot contract out its regulatory obligations. So, for example, under Principle 3 a firm should take reasonable care to supervise the discharge of outsourced functions by its contractor”.
Your “safety net” against being held accountable for outsourcer failures is:-
– The quality of your contract – does it have the required regulatory clauses?
– The quality of the due diligence done at outset.
– The ongoing performance measurement against service level standards.
– The ongoing due diligence being conducted.
We can help you manage your “safety net”. For more information please contact [email protected]