2023 IT Examiner School

Benefits and Risks of Outsourcing

“ You can outsource the business function, but you can't outsource the risk”

Benefits

Risks

Enables an institution to offer its customers enhanced services without the various expenses

Outsourcing does not reduce the fundamental risks associated with IT or the business lines that use it. Loss of funds, loss of competitive advantage, damaged reputation, improper disclosure of information, and regulatory action remain.

Offers the institution a cost-effective alternative Gain operational or financial efficiencies or specialized expertise Conserve capital for other business ventures

Components of A TPRM Program 1. Risk Assessment and Business Requirements 2. Service Provider Selection 3. Contract Review 4. Ongoing Monitoring

• Other Considerations:

• Business Continuity Management • Information Security / Safeguarding • Intra or Intercompany Service Agreements