Navigating through the OCC, CFPB, FDIC, and FFIEC risk management guidance releases can be daunting. These bulletins are not merely guidelines; they are requirements, and the penalties for non-compliance are stiff.

It's important to remember that the primary objective of these regulatory bodies is to ensure that you are effectively protecting your business and your customers from unnecessary third-party risks. This approach aligns closely with third-party risk management best practices.

Key Regulatory Bodies and Their Guidance

Office of the Comptroller of the Currency (OCC) The OCC's 2013-29 Bulletin outlines essential principles for third-party risk management. Key areas of concern include:

1. Planning: Ensure you have a comprehensive plan to manage third-party relationships.

2. Due Diligence: Evaluate vendors against your organization’s risk tolerance before onboarding.

3. Contractual Expectations and Enforcement: Define and enforce your expectations to limit liability.

4. Ongoing Monitoring: Continuously monitor vendor performance and maintain accountability.

5. Roles and Responsibilities: Assign clear roles and responsibilities within a structured framework.

6. Reporting: Track and document third-party relationships for reporting and analysis.

7. Transitioning: Develop contingency plans for service disruptions and transitions.

8. Auditing: Utilize objective evaluations to assess your processes and tools.

Consumer Financial Protection Bureau (CFPB) The CFPB emphasizes protecting consumer interests, with guidelines ensuring that financial institutions manage risks effectively to avoid consumer harm.

Federal Deposit Insurance Corporation (FDIC) The FDIC's risk management guidance focuses on maintaining the stability of the financial system. It requires banks to implement robust third-party risk management practices.

Federal Financial Institutions Examination Council (FFIEC) The FFIEC provides a framework for financial institutions to assess and manage third-party risks, ensuring compliance and safeguarding operations.

Digital Operational Resilience Act (DORA)

The Digital Operational Resilience Act (DORA) is a regulatory framework by the European Union aimed at ensuring the operational resilience of financial entities. DORA mandates that firms:

1. Maintain Strong IT Systems: Ensure systems are resilient against cyber threats.

2. Regular Testing: Conduct regular tests to assess the effectiveness of their IT security measures.

3. Incident Reporting: Implement procedures for reporting significant cyber incidents.

4. Third-Party Risk Management: Extend risk management practices to third-party ICT service providers.

Implementing Effective Third-Party Risk Management

The scrutiny of the financial services industry, as well as many other industries, continues to increase. It's not enough to simply have a supplier monitoring tool; you must have an effective risk management process, framework, and reporting structure to manage third-party vendors throughout their lifecycle.

Supply Wisdom: Enhancing Third-Party Risk Management

Supply Wisdom provides real-time alerts and insights to help companies track and mitigate supplier- and location-based risks. Our comprehensive solution supports:

• Continuous monitoring of third-party risks.

• Enhanced risk visibility and management.

• Streamlined compliance with regulatory requirements.

Contact us for more information or to get started with a free trial. Let us help you develop robust strategies and plans for third-party oversight within your organization.

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If you're interested in bringing innovation to your TPRM team and continuously monitoring your third parties and their locations, as well as your vendors' third parties and their locations, then book a time with one of our specialists.