Bank Negara Malaysia Issues New Policy Document on Outsourcing
28 December 2018
Bank Negara Malaysia today issued a Policy Document on Outsourcing
This Policy Document applies to licensed banks, licensed investment banks, licensed Islamic banks, licensed insurers, licensed takaful operators and prescribed development financial institutions.
According to Bank Negara Malaysia, this Policy Document seeks to strengthen governance and risk management standards in managing outsourcing risk, particularly in light of changing business models and greater adoption of technology within the financial services sector, and primarily covers:
- expectations on the board and senior management in managing outsourcing risk;
- due diligence of service providers and service level agreements;
- protection of data confidentiality; and
- business continuity planning.
The guidelines which are superseded by the new Policy Document include the Guidelines on Outsourcing of Banking Operations (24 April 2000), Guidelines on Outsourcing of Islamic Banking Operations (23 June 2003), Guidelines on Outsourcing for Insurers (24 December 2004), Guidelines on Outsourcing for Takaful Operators (12 April 2006) and Guidelines on Outsourcing for Development Financial Institutions (30 July 2009).
This Policy Document will come into effect on 1 January 2019.