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Financial Institution Letter

Technical Assistance Video on Outsourcing Technology Services

March 14, 2016
Notes
 

Summary:

As part of the FDIC's Community Banking Initiative and Technical Assistance Video Program, the FDIC is announcing the release of a new video on outsourcing technology services. The video is designed to assist community bank directors and senior management in developing a comprehensive risk-assessment program for vendor management.

Statement of Applicability to Institutions with Total Assets under $1 billion: This Financial Institution Letter applies to all FDIC-supervised financial institutions.

Highlights:

  • As financial institutions become more involved in technology outsourcing, they must manage the risks associated with reliance on third-party service providers. Outsourcing has become more complex, with many banks using vendors for key business functions and relying on multiple providers.
  • The video on outsourcing technology services discusses the responsibilities of financial institutions' boards of directors and senior management in governing their institutions' vendor-management program.
  • A vendor-management program represents the policies and procedures established to select and monitor third-party relationships.
  • The video covers the main components of a vendor-management program, including the risk-assessment process, the service-provider selection program, contract negotiation and evaluation, and ongoing monitoring.
  • The video also discusses business continuity planning and testing, and resources available to assist institutions in establishing and maintaining a sound vendor-management program.
  • The video is available for viewing on the FDIC's website at https://www.fdic.gov/regulations/resources/director/virtual/vendor.html .
  • Alternatively, FDIC-insured institutions may download the video through FDICconnect by contacting their FDICconnect coordinator.

Distribution:

  • FDIC-Supervised Banks

Suggested Routing:

  • Chief Executive Officer
  • Chief Information Officer
  • Chief Technology Officer
  • General Counsel

Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).

Additional Related Topics:

  • FFIEC IT Examination Handbook, Outsourcing Technology Services Booklet
FIL-19-2016

Last Updated: March 14, 2016