Draft Supervisory Statement de-fogs outsourcing rules

New regulatory proposals on outsourcing aim to enhance safety and resilience within financial services firms as well as foster more widespread adoption of cloud-based technologies. The Prudential Regulation Authority’s consultation provides welcome clarifications to the existing European guidelines, say Rachael Preston and Lucy Hadrill.

Caroline Stevenson, Rachael Preston and Lucy Hadrill are members of Womble Bond Dickinson’s UK financial regulatory advisory team. Caroline is a legal director in the Edinburgh Office, Rachael is a solicitor in the London office and Lucy is a trainee solicitor in the London office. Sign up to their blog on www.financialinstitutionsnews.com or contact them on firstname.surname@wbd-uk.com.

For many years, firms have relied on third-party outsourcing to drive their businesses forward and over the past decade a regulatory framework has developed in response. However, firms’ interactions with third parties are changing. With advances in technology, firms are increasingly relying on innovative services, including cloud-based technologies, to gain entry into new markets, reduce costs and keep pace with the ever-evolving digital landscape.