SR 23-4

In view of the publication of U.S. banking regulators‘ joint Interagency Guidance on Third-Party Relationships: Risk Management (please see Event ID 21424 in this context), the Board of Governors of the Federal Reserve System (FED) has published a corresponding Supervision and Regulation Letter (SR 23-4). The letter briefly informs of the key purpose of the new guidance which is to aid banking organizations in identifying and managing risks related to their third-party relationships during the entire engagement with any third-party, while ensuring compliance with relevant U.S. laws and regulations. The FED emphasizes that the new guidance does not impose any new requirements on banks, but provides principles to enhance effective third-party risk management. This is particularly important for new relationships with financial technology (FinTech) companies, which may have unique structures and features and involve different levels of customer interaction. Understanding the structure of such relationships helps banks assess the associated risks and determine appropriate management strategies.
If banks have any questions regarding the guidance, they can contact the FED via this contact form.