In addition to traditional core bank processing and information technology services, financial institutions1 outsource operational activities such as accounting, appraisal management, internal audit, human resources, sales and marketing, loan review, asset and wealth management, procurement, and loan servicing. The Federal Reserve is issuing this guidance to financial institutions to highlight the potential risks arising from the use of service providers and to describe the elements of an appropriate service provider risk management program.
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In addition to traditional core bank processing and information technology services, financial institutions1 outsource operational activities such as accounting, appraisal management, internal audit, human resources, sales and marketing, loan review, asset and wealth management, procurement, and loan servicing. The Federal Reserve is issuing this guidance to financial institutions to highlight the potential risks arising from the use of service providers and to describe the elements of an appropriate service provider risk management program.