Financial institutions are increasingly turning to partnerships with third-party organizations to enhance their banking technologies and drive revenue growth. However, with these partnerships come increased risks to the banking system. To address this, regulatory bodies have recently released interagency guidance on third-party risk management practices that financial institutions must follow when entering into business arrangements with third parties.
The guidance emphasizes the need for financial institutions to establish a complete inventory of all third-party relationships, including those with fintech organizations that directly interact with customers. It also encourages institutions to take a risk-based approach, with higher risk activities receiving more comprehensive oversight. While larger banks may already have these risk management practices in place, smaller community and regional banks will need to adapt to comply.
KraftCPAs can help.
Reach out to a KraftCPAs advisor at 615-242-7351 with your questions, or submit the form below to have a member of our team contact you.