How can the quality of third party risk management keep pace with the level of risk and complexity across relationships?

1. The future of third party risk
management
Sibos Singapore October 2015
The Science of Finance

2. 2
Increased reliance on third parties
Accounting
Outsourcing
providers
Exchanges
BPO providers
Infrastructure and
cloud providers
Consultants
Real estate
and facilities
Pricing and
valuation data
Ratings
agencies
Custodians
Prime
brokers
Clearinghouses
Law firms
Hardware and
software vendors

3. 3
Increased complexity of oversight
As the number, nature and complexity
of third party relationships expand…
The cost and challenge
of oversight increases.

4. 4
Increased focus by regulators
Monetary Authority
of Singapore (MAS)
L'Autorité des Marchés
Financiers (AMF)
Prudential Regulation
Authority (PRA)
Germany (BaFin)
Canada Office of the
Superintendent of
Financial Institutions
(OSFI)
Australian Prudential
Regulation Authority
(APRA)
Hong Kong Monetary
Authority (HKMA)
US (OCC, SEC,
FINRA, FDIC, FRB,
FFIEC, NCUA, and
FinCEN)
Japan Securities and
Exchange Surveillance
Commission (SESC)

5. 5
Current processes are not keeping pace
Duplicative, bilateral and costly

6. 6
Processes are outdated

7. 7
The third party risk management challenge
So how can the quality of third party
risk management keep pace with the
level of risk and complexity of these
relationships?

8. 8
The current state of third party risk management
Planning
Due diligence
Contract negotiation
Ongoing monitoring
Termination
CONSUMER
(Bank, Asset Manager, etc)
V1
V2
V3
V4
V[n]
4th
party
vendor
4th
party
vendor

9. 9
The future state of third party risk management
CONSUMER
(Bank, Asset Manager, etc)
V1
V2
4th
party
vendor
V[n]
Know Your Third Party

10. 10
The future of third party risk management
Thank you
For more information, please contact
Gina Ghent
MD, head of KY3P™, Markit
+1 646-505-2310
Gina.Ghent@markit.com

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