AWS for Industries

AWS responds to Financial Stability Board (FSB) consultation on delivering global interoperability in third-party risk management regimes for financial services

In June, the Financial Stability Board (FSB) published a consultation, Enhancing Third-Party Risk Management and Oversight: A toolkit for financial institutions and financial authorities, that aims to reduce fragmentation of regulatory and supervisory approaches to financial institutions’ (FIs) third-party risk management (TPRM) and deliver and support a more harmonized approach across all jurisdictions. The consultation also looks to support FIs’ management of third-party risks and the ability of financial authorities to monitor and strengthen the resilience of financial systems.

At a time when various jurisdictions are advancing regulatory proposals individually, it is important to advance this consultation to avoid national, regional, or industry-specific fragmentation that could reduce the scalable resiliency and security benefits of the cloud in financial services. AWS supports the FSB as it works to create international cooperation on how customers, third-party providers, and regulators work together. We also support the development of a toolkit that works towards a more harmonized global approach to the use of third parties by FIs.

The FSB consultation focuses on four areas: i) common terms and definitions to help drive common understanding through improved clarity and consistency; ii) development of a toolkit on third-party risk management aimed at promoting interoperability of regulatory and supervisory approaches; iii) tools for financial institutions to identify critical services and manage potential risks throughout the lifecycle of third-party service relationships; and iv) financial authorities’ current and developing approaches to the oversight of TPRM.

Progress in these areas will help ensure a framework that accelerates the digitalization and modernization of the financial services sector.

AWS is committed to helping optimize regulatory frameworks for our financial services customers. In our response to the FSB consultation, published on September 5, 2023, we outlined three considerations and recommendations:

  • Enhance coordination between financial authorities and, where possible, use existing best practices and global standards to limit regulatory fragmentation
  • Develop mechanisms to enable an ongoing dialogue between financial authorities and their respective regulated entities, allowing FIs to raise questions and provide feedback on third-party risk management guidance and financial authorities to provide additional guidance on how to interpret risk-based, outcomes-focused guidance.
  • Increase financial authorities’ understanding of technologies that are supporting regulated FIs through voluntary provision of information by third-party service providers.

What’s Next?

AWS is committed to supporting international regulatory discussions to reinforce the benefits of establishing a harmonized and fair framework for the use of cloud services by the financial services sector globally. We are aligned with the FSB’s objective to deliver interoperability while also supporting innovation and resiliency in the financial services industry and look forward to continuing to work with our customers and the FSB as the toolkit is finalized.

If you have any questions about the consultative paper and your use of AWS, you can contact us using our Contact AWS resources. We have a team of regulatory and technology experts with backgrounds in the financial services industry ready to support you.

Michael Jefferson

Michael Jefferson

Michael Jefferson is head of Financial Services Public Policy UK, Middle East, Africa and Switzerland at AWS. He is also co-lead for Financial Stability Board (FSB) engagement. Michael leads on policy and engagement for issues relating to adoption and use of cloud across the finance sector. He has experience working in technology, trade associations, investment banking and the UK Government. Before joining AWS, he led on capital markets policy at the Investment Association and prior to that at UK Finance, representing the UK-based banking and finance industry. Previously, he was head of Public Policy EMEA at Nomura and spent the early part of his career as a UK civil servant working on international trade and business issues, including working in the office of the UK Minister for Trade and Investment.

Heather Kay

Heather Kay

Heather Kay is the head of Canadian Financial Services Public Policy at AWS. She is also the co-lead for Financial Stability Board (FSB) engagement. Heather has broad experience gained through a career in the public and private sectors, with deep subject-matter expertise in public policy, financial regulation, and risk management. Prior to joining AWS, Heather led the strategic policy team at the Financial Services Regulatory Authority of Ontario. She also has experience overseeing major Canadian financial institutions, as a former supervisor at the Office of the Superintendent of Financial Institutions. As a management consultant with Deloitte Canada, Heather worked with financial sector customers to develop and implement leading risk management and compliance functions.