The Basel Committee has developed a new set of principles to reflect the diverse third-party service provider environment in the banking sector.
Building on the outcome of a previous consultation process, the Principles for the sound management of third-party risk establish a common baseline for banks and supervisors for the risk management of third-party service provider arrangements.
At the same time, the principles maintain sufficient flexibility to accommodate evolving practices and regulatory frameworks across jurisdictions.
The Principles seek to accommodate a diverse range of bank risk management practices and approaches. They are intended to be applied on a proportionate basis depending on the size, complexity, business model, and risk profile of the bank, as well as the risks and criticality of the TPSP (third-party service provider) arrangements.
