FDIC Urges Improved Vendor Management
2013 was a year flush with new regulatory guidance from FFIEC, FDIC, and CFPB. We received a lot of intelligence from our customers about their examinations and this often foretells updated guidance and direction as regulators continue to raise the bar for third party risk management and direct banks to improve their programs.
Further guidance has been released in the years since including:
- 2014 – Technology Outsourcing Informational Tools for Community Bankers
- 2018 – FDIC Forum: Use of Technology in the Business of Banking
- 2019 – Technology Service Provider Contracts
Why Do We Need FDIC Vendor Management?
There are multiple potential risks associated with using third-party vendors and when these risks are not appropriately managed there can be detrimental consequences including regulatory action, financial loss, damage to reputation and litigation.
A summary of potential risks includes:
- Strategic risk
- Reputation risk
- Operational risk
- Transaction risk
- Credit risk
- Compliance risk
FDIC Vendor Management gives organizations guidance on how best to foresee these risks and protect the organization as a whole.