Outsourcing Risk Practice Benchmark

Benchmark - October 2018

The term ‘outsourcing’ typically refers to an arrangement between an institution and an external party to provide a service, product or activity, on a continuing basis, that would have otherwise been performed internally.

There are many economic, organisational and technical motivations to outsource. However, outsourcing may significantly alter an institution’s risk profile.

This study identified standard practice and common challenges when managing the risks associated with outsourcing and third parties for financial institutions. By collating qualitative data based on surveys, interviews and group discussions involving 51 banks and insurers, this study examined areas of potential improvement and overall industry maturity, while identifying key risks throughout.

About ORX Practice Benchmarks

ORX Practice Benchmarks evaluate the maturity of an institution’s risk management practices, and compare it to that of other participating institutions using a “three stages of development” model. Participating institutions self-assess themselves against each maturity description and then receive a customised benchmark report, showing their level of maturity against the other participants. As well as the individual benchmarks, we also produce a report that gives you a picture of overall industry practice. This report is available to all ORX members to download.