Outsourcing scrutinised, new monitoring proposed

Washington, DC -- The Federal Financial Institutions Examinations Council (FFIEC) is to adopt a mandatory and stricter standard for monitoring outsourcing arrangements in financial institutions, according to a report published in early June by the Federal Deposit Insurance Corporation (FDIC), the US regulatory body that insures deposits at banks.

The standard procedure for examining financial institutions, according to the FDIC, should include determining if the financial institution has procedures for monitoring all outsourcing arrangements to ensure adequate controls are in place or the service provider has proper procedures and controls to monitor their outsourcing arrangements. It should also include identifying and reviewing contracts between financial institutions and data service providers that allow for