On 1st of October 2017 the revised Outsourcing Policy of the Reserve Bank New Zealand became effective. The revised policy is applicable to locally incorporated banks with net liabilities over NZD 10bn and ensures that they can meet their obligations such as:
- daily clearing, settlement, and other time-critical obligations;
- ability to monitor and manage the institution’s financial positions;
- availability of systems and financial data for the Reserve Bank and statutory manager in case of failure; and
- provision of basic banking services to existing customers
The policy requires the institution to have appropriate measures in place to fulfil these obligations. Additionally, risks associated with outsourcing must be mitigated and a separation plan prepared in case local operations must be separated from the group. Relevant outsourcing initiatives must be submitted to the regulator and receive a non-objection before implementation. A respective compendium (outsourcing register) must be maintained.
Please refer to this Primer for more details. It also outlines an approach for how they can be implemented.