New Outsourcing Rules in Australia

Filed in archive Best Practice on October 11, 2006

In an effort to ensure quality and security in outsourcing, the Australian Prudential Regulation Authority (APRA) has now the power to oversee outsourcing deals.

The new guidelines would give APRA the right to conduct onsite inspection of firms handling outsourcing work for financial institutions that are handled by APRA. The new rule also states that APRA would be able to issue approved deposit-taking institution (ADI) in order to pursue alternative arrangements if they found out that the said outsourcing deal is not managed properly.

Aside from giving authority to APRA, the new outsourcing guidelines also highlights the following requirements:
-companies must be able to show how they would deal with the failure of a service provider or an outsourcing deal
-firms should declare any other relationships they have with their service provider.
-outsourcing deals which are examined should also be able to determine what went wrong if these deals fail

Overall, these outsourcing rules if implemented would be able to answer the security and quality issues in outsourcing deals especially financially-related ones.