In our last post, we reviewed the new interagency guidance expectations for terminating a third-party relationship. Let’s look now at tools and best practices to support alignment with the new guidance.
When terminating third-party relationships, banking organizations should consider the following tools and best practices:
- Standardize third-party offboarding processes,
- Create a termination checklist that includes items specific to each third-party type, such as type of services provided or business units impacted,
- Create transition service plans that detail how services are to be transitioned, costs associated with transition services, and business continuity protections,
- Digitize these checklists and plans, using AI and other tools to automate checklists, workflows, and alerts,
- Use digital tools to monitor offboarding and to automatically update stakeholders,
- Use technology to ensure all relevant data is migrated to the new third party or in-house, including testing and validation procedures, and
- Use digital tools to track ownership of IP and to automate document required notices of return/destruction of confidential information.
Join us next week as we continue our Market Insight series, where we will discuss supervisory reviews under the new guidance.