Understanding and implementing the European Banking Authority's framework for managing third-party risks in financial institutions
The European Banking Authority (EBA) Outsourcing Guidelines provide a comprehensive framework for financial institutions to manage risks associated with outsourcing arrangements, including cloud service providers and other third parties. These guidelines, which came into effect on September 30, 2019, apply to credit institutions, investment firms, payment institutions, and electronic money institutions across the EU.
"The EBA Guidelines specify how financial institutions should manage third-party and outsourcing risks to maintain financial stability and security across the European Union."
Effective Date
Scope of Application
Primary Focus
Financial institutions must implement robust governance arrangements for all outsourcing activities
Comprehensive assessment of service providers before entering into outsourcing arrangements
Detailed risk evaluation for all outsourced functions, particularly critical or important functions
Maintain a comprehensive register of all outsourcing arrangements with detailed documentation
Establish viable exit strategies for all outsourcing arrangements to ensure operational continuity
Regular monitoring and assessment of service providers' performance and compliance
Evaluate existing outsourcing arrangements against EBA requirements
Update or establish outsourcing policies and procedures
Create and maintain comprehensive outsourcing register
Ensure continuous adherence to EBA guidelines