Featured Product

    MAS Sets Out Good Practices on Third-Party Risk Management

    August 05, 2022

    The Monetary Authority of Singapore (MAS) published an information paper that sets out good practices on third-party risk management by banks. The paper has been published post the thematic inspections of MAS on the operational risk management standards and practices of selected banks over 2020 and 2021, with a focus on third-party risk management.

    The information paper sets out the supervisory expectations, good practices, improvement areas, and case examples observed from the thematic inspections on third-party and operational risk management governance and control framework. MAS observed that the banks have generally established frameworks and processes to provide oversight of operational risk, but implementation effectiveness could be improved. There should be better articulation of key operational risk issues and trends, at both the bank-wide and key business unit levels, to identify emerging risks and determine if additional controls were necessary. With regard to the third-party risk management, MAS observed that banks generally have more established frameworks and processes to manage outsourcing arrangements compared to non-outsourcing arrangements; however, some banks fell short of expectations in management oversight and risk reporting of outsourcing activities as well as on due diligence and ongoing monitoring processes. MAS notes that banks that were still in the early stage of setting up a third-party governance structure largely managed their non-outsourcing arrangements in a decentralized manner through the respective business units, instead of subjecting them to the consolidated oversight of a management committee.

    The good practices, as mentioned in the paper, on third-party risk management include cultivating staff competencies in operational risk management, raising risk awareness through the rollout of comprehensive accreditation programs, leveraging technology by implementing bank-wide systems and tools, focusing on emerging risks, including third party and cyber risks, and managing operational risk through a wider lens of non-financial risks such as the reputational and conduct risks. All banks are expected to benchmark their practices against this paper and take steps to address gaps, if any, in a risk-appropriate manner. The design of their controls would consider their specific organizational structures, business models, scale of operations, and risk profiles. The inspected banks have taken, or are taking, remedial actions to improve their frameworks and processes. The good practices highlighted should be referenced by all financial institutions given that they are exposed to similar risks. Non-bank financial institutions are encouraged to adopt the recommended practices where relevant and appropriate to the materiality of the risks posed by their third-party arrangements.

     

    Keywords: Asia Pacific, Singapore, Banking, Operational Risk, Third Party Risk, Regtech, Cyber Risk, Outsourcing Risk, MAS

    Related Articles
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    News

    IOSCO Welcomes Work on Sustainability-Related Corporate Reporting

    The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BoE Allows One-Day Delay in Statistical Data Submissions by Banks

    The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.

    September 14, 2022 WebPage Regulatory News
    News

    ACPR Amends Reporting Module Timelines Under EBA Framework 3.2

    The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.

    September 14, 2022 WebPage Regulatory News
    News

    ECB Paper Discusses Disclosure of Climate Risks by Credit Agencies

    The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)

    September 13, 2022 WebPage Regulatory News
    News

    APRA to Modernize Prudential Architecture, Reduces Liquidity Facility

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.

    September 12, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8514