Written by Midhlaj
June 11th,2024
SAMA stresses the need for robust risk management in outsourcing, ensuring banks meet obligations even when using external providers.
SAMA rules require detailed outsourcing contracts outlining work scope, service levels, performance, controls, audits, continuity plans, security, and dispute resolution.
Banks must consistently monitor outsourcing arrangements to ensure compliance with contracts and mitigate emerging risks.
Outsourcing core banking functions is restricted and requires SAMA's permission, ensuring essential activities stay under the bank's direct control.
SAMA prioritizes customer data protection, requiring banks to ensure outsourced providers uphold strong data security and privacy per regulations.
Outsourcing abroad requires banks to manage extra risks, including data residency and jurisdictional control issues, with foreign providers.
SAMA rules likely mandate clear termination and transition terms in outsourcing contracts to ensure smooth handovers and minimize disruptions if the partnership ends.
The rules may limit subcontracting by approved providers, requiring banks to get SAMA's approval before tasks are assigned to another party.
SAMA rules may complicate adopting new technologies via outsourcing, requiring banks to navigate approvals while leveraging industry advancements.
Banks must stay updated on changes to SAMA Outsourcing Rules, as SAMA may revise them based on new security threats or best practices.
Understand the key elements of SAMA compliance with our detailed guide. Ensure your organization meets all regulatory requirements efficiently.