Managing the Third Party Relationship

Banks often rely upon third parties to perform a wide variety of services and other activities.  Recent federal guidance from prudential regulators clarifies that a bank’s board of directors and senior management are ultimately responsible for managing activities conducted through third party relationships, including identifying and controlling the risks arising from such relationships, to the extent as if the activities were handled within the bank.  This program outlines the bank’s third party relationship management responsibilities and discusses the board’s specific role, which includes oversight and accountability of the bank’s risk management process.

Covered Topics

  • Identifying Significant/Critical Relationships
  • Bank Responsibility – Risk Management Process
  • Third Party Relationship Risks
  • Risk Assessment
  • Due Diligence
  • Contract Structure and Negotiation
  • Ongoing Monitoring
  • Board Responsibility –  Oversight and Accountability
  • Supervisory Reviews/Examinations
  • Penalties