Outsourcing risk management in financial market: Bank of Russia report
The Bank of Russia proposes to discuss possible mechanisms for managing outsourcing risks, as well as requirements for the conditions and procedure for interaction between financial companies and outsourcees. Outsourcing advantages, possible risks and current practices are analysed in the Bank of Russia consultation paper.
Accelerated digitalisation and automation, deeper specialisation of activities, and adaptation of the financial market to the current economic and geopolitical situation create prerequisites for expanded outsourcing practices. Even now, financial companies have a growing demand for external services, especially in IT and cloud storage. The active use of outsourcing involves risks for financial market participants and the market itself. This can lead to operational risks in outsourcers’ activities, their dependence on specific suppliers, lower control over individual processes and the entire business of such outsourcers, violation of information integrity, and so on.
According to the Bank of Russia, outsourcing regulation will promote the development of the financial market, reduce risks, improve the quality and accessibility of financial services and add to the efficiency of financial companies.