The Australian Prudential Regulation Authority (APRA) is sending a team to India, led by its head of IT risk David Pegrem, to evaluate service provider standards with Indian firms playing a growing role for the big four banks in overseeing back-office functions.
The Australian Financial Review says the APRA delegation will assess the operations of companies that outsource for local financial services players, the Indian operations of other multinational IT suppliers, and ring-fenced operations of Australian banks. The visit will take place in the fourth quarter.
All new and existing outsourcing arrangements run by the big four banks - ANZ Banking Group, ASB's parent Commonwealth Bank of Australia, BNZ's parent National Australia Bank, and the Westpac Group - must conform with a new regulatory standard introduced by APRA - Prudential Standard CPS 231 - from July 1, the AFR says. This standard, largely consistent with rules in place since 2006, ensures APRA has access to the offshore operations of all Australian banks and must be given access to documentation and information related to the outsourcing.
According to the AFR, APRA's Indian trip mirrors others being made by the US Securities and Exchange Commission and Britain's Financial Services Authority.
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