ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
ADVERTISEMENT
Home Community Banking

FDIC Watchdog Highlights Gaps in Banks’ Vendor Contracts

February 16, 2017
Reading Time: 2 mins read

Few banks’ contracts with technology service providers (TSPs) provide sufficient detail about the providers’ business continuity and incident response capabilities and duties, according to a report issued today by the FDIC’s independent inspector general. The report also found shortfalls in banks’ assessments of how providers could affect the banks’ own ability to plan for business continuity and incident response.

In response, the FDIC said it would work with other Federal Financial Institution Examination Council agencies to update guidance on business continuity planning and incident response and that it would continue examinations and off-site monitoring of vendor management. Anecdotal reports from banks indicate that examiners are increasingly focusing on technology provider risk management. The report expressed concern that some banks “may not be sufficiently knowledgeable about or engaged in contract management” and would thus “attempt to transfer their inherent responsibility for [bank] continuity and information security to TSPs,” which the IG said will require examiners’ continued focus.

The report, issued after a review of 48 technology vendor contracts, found that nearly half included no discussion of business continuity. Forty-two percent included a “detailed” discussion, and 10 percent included only a “high-level” discussion. “Contract provisions that more specifically detail key business continuity issues could provide [banks] greater assurance that critical systems, services, and operations will be recovered and resumed timely and effectively when operations have been unexpectedly disrupted,” the report found.

In terms of incident response, 65 percent of contracts included a detailed discussion of security and confidentiality, but only 23 percent covered performance standards in detail. The report also found that key terms in contracts lack specific definitions. “[Banks] may not be sufficiently engaged in writing and negotiating contracts to ensure their rights and TSP responsibilities are clearly defined,” the report found. “TSPs appear to be drafting the contracts and ensuring that their rights are protected more than the [banks].”

Regulators continue to focus on vendor risk management, including through an interagency rulemaking on enhanced cyber risk management standards for which comments are due tomorrow. American Bankers Association staff will continue to monitor agency activities and communicate with all agencies as guidance and expectations evolve. For more information, contact ABA’s Krista Shonk or Denyette DePierro.

ADVERTISEMENT
Tags: Core processingCybersecurityRisk managementThird-party risk
ShareTweetPin

Related Posts

CFPB launches ‘tip line’ to report on bureau employees

ABA, associations urge CFPB to rescind changes to adjudication process

Legal
June 13, 2025

ABA joined three associations in voicing support for a CFPB proposal to rescind a set of changes to the bureau’s rules that, among other things, gave its director authority to resolve adjudication hearings overseen by the agency.

Bank economists grow more optimistic about business credit, soft landing

ABA DataBank: May inflation cooler than expected, but still above Fed’s 2% target

Economy
June 13, 2025

With many economists expecting inflation to spike following the implementation of reciprocal tariffs, the headline Consumer Price Index rose 2.4% year-over-year in May — right in line with consensus expectations.

Consumer Sentiment declined in April

Consumer sentiment rebounds in June

Economy
June 13, 2025

The University of Michigan Consumer Sentiment Index increased 15.9% in June compared to the month prior, landing at 60.5, according to preliminary results for the month.

Survey: Banks boosting cybersecurity due to AI while also investing in technology

Survey: Banks boosting cybersecurity due to AI while also investing in technology

Cybersecurity
June 13, 2025

Most U.S. banks are increasing their cybersecurity efforts because of emerging technologies such as generative artificial intelligence, and many of those same banks also list AI as a top business investment, according to a recent survey by auditing...

Senate bill would mandate discount window testing, modernization

Proposal to end Fed interest payments to banks faces pushback

Newsbytes
June 13, 2025

Senate Banking Committee Chairman Tim Scott (R-S.C.) said a proposal to prevent the Federal Reserve from paying interest to banks “is not a decision to be rushed” and must follow proper parliamentary procedure, Bloomberg Law reported.

Research roundup: ABA holds policymakers accountable with independent analyses of key banking issues

Senate passes ABA-advocated ‘trigger leads’ bill

Mortgage
June 13, 2025

The Senate granted unanimous consent to S. 1467, an ABA-advocated bill that would would prevent credit reporting agencies from selling so-called mortgage trigger leads to lenders in most circumstances.

NEWSBYTES

ABA, associations urge CFPB to rescind changes to adjudication process

June 13, 2025

ABA DataBank: May inflation cooler than expected, but still above Fed’s 2% target

June 13, 2025

Consumer sentiment rebounds in June

June 13, 2025

SPONSORED CONTENT

AI Compliance and Regulation: What Financial Institutions Need to Know

Unlocking Deposit Growth: How Financial Institutions Can Activate Data for Precision Cross-Sell

June 1, 2025
Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

April 25, 2025
Outsourcing: Getting to Go/No-Go

Outsourcing: Getting to Go/No-Go

April 5, 2025
Six Payments Trends Driving the Future of Transactions

Six Payments Trends Driving the Future of Transactions

March 15, 2025

PODCASTS

Podcast: Old National’s Jim Ryan on the things that really matter

June 12, 2025

Podcast: What bankers need to know about ‘First Amendment audits’

June 5, 2025

Podcast: Accelerating banking for quick-service restaurants

May 8, 2025
ADVERTISEMENT

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2025 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2025 American Bankers Association. All rights reserved.