Third Party Risk Management Remains an Examination Priority

Third party relationships continue to receive increased scrutiny from regulators, particularly as banks rely more heavily on FinTech's, core providers, and outsourced compliance services.

Examiners are looking beyond contracts to evaluate:

• Vendor due diligence and ongoing monitoring

• Risk tiering and supporting documentation for the risk tier chosen

• Board oversight of critical vendors

• Alignment between vendor risk and internal controls

• Are your vendors using AI and are you asking the question?

What this means for your bank:

• Vendor management gaps often surface during safety and soundness or compliance exams

• Outsourcing does not reduce regulatory responsibility

• Inconsistent documentation increases audit risk

How to prepare:

• Reassess vendor risk ratings and monitoring practices

• Update the questions you ask

• Confirm documentation supports your risk conclusions

• Ensure board reporting accurately reflects vendor exposure

• Strong third party risk management protects your bank and supports smoother examinations.

The Bankers Solutions helps community banks right size vendor programs and strengthen audit defensibility.