Lawmakers Simplify Outsourcing of Financial Services

New rules under MaRisk

Greater flexibility and autonomy in the outsourcing of banking services: Those are the key changes to the outsourcing guidelines published on October 31, 2007, by Germany’s Federal Financial Supervisory Authority (BaFin).

Rigid regulatory details are replaced by general risk management principles that are now to be regulated by each bank’s own sourcing governance. BaFin has allowed the outsourcing of core banking services for the first time. Meanwhile, the outsourcing of non-core services – such as back-office services – has been greatly simplified: Such outsourcing is no longer subject to mandatory reporting, and the contract inspection procedure is no longer required.

The new provisions recognize the growing importance that outsourcing plays in banking. These guidelines have now been incorporated into the Minimum Requirements for Risk Management (MaRisk), where they replace provisions distributed earlier through various circulars.

---

<- Back to: News