The Central Bank of Ireland (“Central Bank”) is consulting on new guidance on the sound management of third-party risks that will replace its current Cross-Industry Guidance on Outsourcing, which was published in 2021.
In the intervening five years, the Central Bank has observed significant developments in how firms engage with third parties, including evolving third party arrangements beyond traditional outsourcing and a changing risk environment.
Consistent with the Central Bank’s regulatory simplification agenda, the proposed guidance is intended to recast the current guidance in a simplified way to make it more accessible, focusing on intended outcomes with attendant good practices. The Central Bank’s focus is on whether third-party risks are sufficiently controlled or mitigated, acknowledging that firms have ownership, responsibility and discretion to achieve the intended outcomes.
The consultation paper sets out the Central Bank’s supervisory engagement on the topic of outsourcing in recent years, including the publication of the 2021 guidance and risks assessments, inspections and thematic reviews. It outlines findings made by the Central Bank including those relating to underdeveloped oversight arrangements, concentration risks, intra-group dependencies, offshoring challenges and inadequate exit planning. The Central Bank is also cognisant of the development of international and EU regulatory frameworks and is seeking to align with those frameworks.
The proposed guidance sets out 16 outcome principles across five areas that cover the lifecycle of third party arrangements:
(a) Governance and organisational context
(b) Pre-engagement – risk management and due diligence
(c) Engagement – due diligence, contracting and onboarding
(d) Ongoing risk management and monitoring
(e) Termination – exit planning and execution
The Central Bank position that “delegation” is not distinct from “outsourcing” is unaltered by the proposed guidance.
Responses to the consultation are requested by 3 December 2026.
Please get in touch with your usual Asset Management and Investment Funds Department contact or any of the contacts listed in this publication should you require further information in relation to the material referred to in this briefing note.
