. . . to ensure relationships are safe and sound.
The Office of the Comptroller of the Currency (OCC) has released the Final Interagency Guidance on Third-Party Relationships, aimed at helping financial institutions effectively manage risks associated when engaging with third-party vendors. The guidance emphasizes the need for comprehensive risk management practices throughout the entire life cycle of these relationships. It highlights five key stages that require attention:
- Due diligence and Selection
- Contract Negotiation
- Ongoing Monitoring
The OCC also stresses the importance of establishing a robust governance framework, including oversight and accountability, independent reviews, and proper documentation and reporting. Additionally, the guidance emphasizes the role of supervisory reviews in evaluating compliance with the guidance and strengthening industry standards. Overall, the OCC’s guidance provides a comprehensive approach to mitigating risks in third-party relationships and improving risk management practices in the financial sector.
Original article by Adam Reynolds. Lead Non-Technical Auditor, infotex