As banks and other financial institutions see increases in both technological complexity and regulatory oversight in their operations, the finance sector has been experiencing a rise both in the number of vendors and third parties they contract with and in the amount of regulatory scrutiny on these partnerships. The agencies under the umbrella Federal Financial Institutions Examination Council (FFIEC) have been stepping up focus on third-party relationships and, in some cases, financial institutions and their partners have been paying the price through enforcement actions.
A new white paper by Paul Reymann, a compliance and risk management expert and partner at advisory firm McGovern Smith Advisors (MSA), gives third-party partners that work with financial institution clients, including those from the payments industry, a road map to achieve better compliance results. The paper, “Third-Party Risk Management Is Broken—Critical Vendors Should Be Exam-Ready,” also sets out arguments for more ownership of compliance from third parties, rather than letting clients do most of the risk management work.
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