The regulatory landscape of financial services organizations is ever evolving. With state, national and international complexities, information security professionals have to stay on their toes to ensure compliance in the context of outsourcing and third-party risk management (TPRM). In this blog, we’ll take a closer look at what TPRM means in the financial services industry.
According to the Federal Deposit Insurance Corporation (FDIC), financial institutions generally enter into third-party relationships by outsourcing certain operational functions or the production of certain offerings. This can assist management in attaining strategic objectives by increasing revenues or reducing costs.
It’s important to note that the term “third-party” includes all entities that have entered into a business relationship with the financial institution, whether it’s a bank or a nonbank, affiliated or not affiliated, regulated or non-regulated, or domestic or foreign.
The following are some of the risks that may arise from a financial institution’s use of third-parties, according to the FDIC.
In response to increasingly complex cyber attacks, legislators have imposed greater regulatory pressure on the financial services industry through measures such as the NYDFS regulations and the California Consumer Privacy Act (CCPA).
We believe bills and resolutions related to cyber security that deal with third-party risk management will continue to be passed in the United States and globally, which will increase the liability of financial services organizations everywhere.
However, cyber attackers are constantly adapting to new security measures, so bare minimum compliance is not enough to mitigate risks. The financial services industry should strive to improve TPRM strategies as much as possible, rather than waiting for new regulations to force changes.
With an easy to setup application and robust feature set, our ThirdPartyTrust platform simplifies assessing and working with third-parties, identifying gaps in their cyber security programs, and putting remediation plans into place. Its network-based approach allows to streamline the information gathering and communication process while conducting security assessments.
These are some of the benefits of ThirdPartyTrust for financial institutions:
By firmly embedding TPRM functions into the extended business and its operating structure, financial services organizations can benefit from reducing risk and increasing agility and resilience.
To learn more about how ThirdPartyTrust can help you manage third-party risk, request your free trial now:
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