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9 CLOUD SERVICES AND SLAS:
The Central Bank in Part B of the DP focuses on the recent growth of the use of Cloud
Service Providers and the likelihood of this continuing into the future. It is clear from the
details in the DP that the Central Bank is not satisfied that the risks posed by the provision
of services are fully understood or fully addressed in the contractual documentation
between the parties.
It is strongly recommended that an RF entering into such outsourcing
arrangements is correctly advised as to the exact nature of the risks and that
the relevant SLA is drafted by those who are fully informed of the risks to
ensure they are accurately and robustly addressed in the drafting.
Concluding Remarks
The Central Bank in the DP states that “outsourcing risk is steadily moving towards the top of
the risk registers for many firms across the financial services industry, a trajectory mirrored by
its prominence on the list of supervisory priorities across financial sector regulators.”
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The Central Bank further states that “our onsite and inspection engagement planning will
include an intensified level of scrutiny around the management of outsourcing across all sectors”.
As a result of comments of this nature, we would urge all RFs to review their Outsourcing
arrangements / SLAs without delay, mapping them as against these minimum standards,
the sectorial legislative standards and the EBA Outsourcing Guidelines, as recommended by
the Central Bank. Should you require any assistance with this project or related matters,
please do not hesitate to contact any of the below or your usual Matheson contact.
5. The Central Bank states that “this is reflected in the extent and volume of mitigation actions issued to several regulated firms specifically targeting improving the management of
outsourcing risk”.
www.matheson.com DISCUSSION PAPER 8 – OUTSOURCING FINDINGS AND ISSUES FOR DISCUSSIONS 6
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