Outsourcing Governance Framework: Roles and Processes

An outsourcing governance framework is the overarching steering structure that defines responsibilities, decision paths, control mechanisms and reporting lines for all outsourced activities within an organization. It ensures outsourcing arrangements are managed on a risk-based approach across their entire lifecycle — from strategic planning and risk analysis through vendor selection to ongoing monitoring and exit management.

The EBA Guidelines on Outsourcing Arrangements (EBA/GL/2019/02) require financial institutions to maintain a clear governance structure with defined roles and responsibilities, a documented outsourcing policy, risk assessments before entering arrangements, and ongoing monitoring of service quality. The new

2026 EBA third-party risk guidelines extend governance requirements to all third-party arrangements beyond outsourcing, including non-ICT services.

In the Three Lines of Defense model, operational business units (first line) handle day-to-day management and monitoring of their outsourcing arrangements. Risk management and compliance (second line) set policies, conduct independent risk assessments and oversee regulatory compliance. Internal audit (third line) reviews the effectiveness of the entire governance framework at regular intervals and reports directly to senior management.

An effective governance framework typically includes a strategic outsourcing committee at board level, an operational steering committee for ongoing vendor management, a risk committee for outsourcing risk assessment and domain-specific working groups. The committee structure should define clear escalation paths, decision-making authority and reporting obligations, scaled to the size and complexity of the institution.

DORA (Digital Operational Resilience Act), effective since January 2025, specifically governs ICT third-party arrangements and requires a register of information, threat-led penetration testing and EU-wide oversight of critical ICT service providers. MaRisk AT

9 remains the primary framework for non-ICT outsourcing. Banks must integrate both frameworks into a unified governance model while avoiding regulatory overlap and double reporting.

Key KPIs include availability and performance metrics (SLA compliance), risk indicators (KRIs for outages, compliance breaches), financial metrics (cost vs. budget) and quality indicators (error rates, response times). Reporting should use a tiered dashboard system with operational daily reports, monthly management reports and quarterly board reports. Exception reporting when thresholds are breached enables early escalation.

ADVISORI supports banks and financial institutions in designing and implementing governance frameworks that integrate MaRisk AT 9, EBA Guidelines and DORA requirements. Our services include developing committee structures, defining RACI models and escalation paths, building KPI and reporting frameworks, and supporting internal control systems and maturity models for outsourcing governance.