Outsourcing risk management

Outsourcing risk management

Companies need to be aware that, while outsourcing of risk management to service providers is a key strategic tool, the regulated firm is ultimately held accountable

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16th October, 2021

In February of this year, the Central Bank of Ireland issued a ‘Draft Cross-Industry Guidance on Outsourcing’ document. It is expected that this will be updated later this year to reflect the feedback from the broader financial services sector. Thereafter, it will become mandatory.

In essence the regulator is saying that while outsourcing of risk management to service providers is a key strategic tool, the regulated firm is ultimately held accountable.

Outsourcing to third parties carries additional risks and organisations need to ensure that their risk management framework encompasses all outsourcing arrangements. This is not just a regulatory requirement; it makes good business sense too.

“To maintain control and oversight of outsourcing arrangements requires more than a simple spreadsheet. The detailed information that needs to be recorded for regulatory purposes, and the understanding of which third party is involved in which processes, means that a database-driven solution is required”, Gerry Joyce, co-founder and chief technology officer at CalQRisk, said.

CalQRisk recently added a new module called ‘Third Parties’ to its Governance, Risk and Compliance platform. This module is totally integrated with the existing functionality of the platform so that due diligence questions can be easily associated with a third party, along with processes and risks.

Tasks assigned to third parties and incidents that are linked to their activities can also be recorded in the system. Where Third Party organisations further outsource a task to fourth party organisations, details of those fourth parties can also be stored and linked in the system, meaning no more spreadsheets! The information is stored centrally in a database and is accessible to those who require the information.

This latest addition to the CalQRisk platform has been widely welcomed by organisations in the fund management sector, brokers, credit unions and others which have critical dependencies on third parties.

Whether they are service providers, suppliers or agents on whom they depend for the delivery of product or service to their customers, they can record and maintain all key information (due diligence, risk assessments, ongoing monitoring, KRIs, tasks, etc) in one repository allowing them to demonstrate good management and oversight when requested.

For details:

T: 061-477888

Email: [email protected]

Visit: calqrisk.com

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