IE - Cross-sectoral outsourcing discussion paper published by Central Bank of Ireland
On 19 November 2018, the Central Bank of Ireland (CBI) published a discussion paper entitled “Outsourcing – Findings and Issues for Discussion” containing a summary of key issues and risks identified by the CBI.
The Discussion Paper is split into two sections: Part A deals with the Central Bank's minimum supervisory expectations around the management of outsourcing risks and sets out the Central Bank's findings in relation to current practices in the Irish market, Part B examines some of the keys risks and evolving trends associated with outsourcing while also identifying ways firms might mitigate these risks. The Central Bank identified many areas of weakness across the financial services sectors, including board awareness of net risk and complexity arising from outsourcing, and inadequate governance, risk management and business continuity management practices both at inception and throughout the life-cycle of the arrangement. The Central Bank also restated its common supervisory expectations for intra-group and third-party outsourcing.
The Central Bank expects all regulated financial service providers to review their current practices against the Discussion Paper. It is expected the Central Bank may prioritize inspections of regulated firms' outsourcing practices in 2019 following completion of this engagement with industry stakeholders.