The guidance outlines principles and key considerations for banking organizations as they navigate risks associated with third parties, including fintechs.

By Arthur S. Long, Parag Patel, Barrie VanBrackle, Pia Naib, Ja Hyeon Park, Victor Razon, and Deric Behar

On June 6, 2023, the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System (FRB), and the Office of the Comptroller of the Currency (OCC) issued final supervisory guidelines for banking organizations on managing risks associated with third-party relationships (Joint Guidance). The Joint Guidance replaces existing individual agency guidelines, and harmonizes the principles- and risk-based approach of the three agencies concerning risk management of third-party relationships.

Although the Joint Guidance applies to all banking organizations that the agencies supervise, it does not create any new legal obligations or offer prescriptive requirements. It does, however, provide important considerations for banking organizations and the third parties with which they engage, and will help banks develop tailored approaches to third-party risk management.