FCA issues guidance on use of third-party technology banking solutions

The Financial Conduct Authority (FCA) has published a document setting out a number of considerations for firms that are thinking of using third-party technology or off-the-shelf banking solutions. Eversheds sets out below what this means for UK firms.

A UK firm has many choices when designing its operating model and setting its IT strategy: the market for third parties providing technology services to regulated firms is growing exponentially. Regulators — the FCA and the Prudential Regulation Authority — appreciate that the outsourcing of technology services, and indeed outsourcing more generally, can bring significant benefits to authorised firms and their customers. However, they also take the view that outsourcing gives rise to certain regulatory concerns: firms will invariably have reduced control over the outsourced activity; the ability of regulators to carry out their supervisory powers may be impaired; and regulators may need to assess the suitability of the service provider and key members of its staff…

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