Monetary Authority of Singapore: “Guidelines on outsourcing”
These Guidelines provide guidance on sound practices on risk management of outsourcing arrangements.
These Guidelines from the Monetary Authority of Singapore (MAS) on Outsourcing (“Guidelines”) set out expectations of an institution that has entered into any outsourcing arrangement or is planning to outsource its business activities to a service provider. An institution should conduct a self-assessment of all existing outsourcing arrangements against these Guidelines.
While outsourcing arrangements can bring cost and other benefits, it may bring increased risks including:
- Reputation, compliance and operational risks arising from failure of a service provider in providing the service
- Breaches in security
- The institution’s inability to comply with legal and regulatory requirements
- An institution being exposed to country risk when a service provider is located overseas and concentration risk when more than one function is outsourced to the same service provider.
It is important that an institution adopts a sound and responsive risk management framework for its outsourcing arrangements.