The regulatory agencies issued revised final guidance on managing the risks of third-party relationships (called Third-Party Risk Management or TPRM), signaling more intense scrutiny on financial institutions’ involvement with vendors and other third parties. This reflects the fact that vendor management has been an important issue for a long time, but it is apparent that expectations are increasing, especially as banking goes more digital.
Increasingly financial institutions need the expertise of other entities and professionals. The rise of fintech companies and their participation in the banking industry, as well as the increasing implementation of artificial intelligence into financial services, has changed the landscape of risk in important ways, and financial institutions need to adapt.
We’ll discuss both the guidance and what regulators’ expectations are, and how to best maintain your vendor management program. We’ll provide many real-world examples to illustrate these concepts and discuss best practices and recommendations. We’ll also review the latest developments and specific issues and go over the elements of a successful vendor management program in any institution, from vendor selection to contracting to monitoring to termination of the relationship.
What You’ll Learn
- Third-party risk management (TPRM) guidance from the agencies – what this tells us about the criticality of program management
- Updates, including recent guidance on risks of arrangements with third parties to deliver deposit products and services digitally and via other means
- Managing relationships with financial technology (fintech) firms
- How to deal with AI vendors – convergence of TPRM and model validation
- Who at the institution should be involved in these efforts?
- Role of the Board and executive management
- Vendor selection process – how do we pick the right third party?
- Categorization of vendors – identification of critical vendors and how to handle them
- Developing and maintaining risk management policies and programs regarding third-party relationships
- How this relates to AI and models – what should we be aware of?
- Oversight of third-party activities – monitoring and testing
- What happens when a vendor fails to meet expectations?
- Contract negotiation and management – much more than just a legal requirement
- Ongoing monitoring, including on-site visitation when necessary
- Policies, procedures, processes, risk assessments, and training
- Terminating vendor relationships – how does this work?
- Vendors’ ability to comply with applicable law and regulations
Webinar details
Dealing with vendors and other third parties brings with it many requirements and responsibilities on the part of the financial institution, especially in this day and age of artificial intelligence. We’ll discuss how to best fulfill those responsibilities and effectively manage these relationships.
