Due diligence team members • Security expert Reputational risks • Audit experts Strategic risks Compliance risks Interest rate, liquidity and market risks Operational risks Recognize Evaluate Solve • Experts in Law • Operational experts • Expert in finance DD -method of recognizing, evaluating and finding a solution to eliminating their effect
What must be accomplished during DD by Experts and Specialists Ensure that the service provider is a validly existing entity, and check its corporate history. Check the qualifications of the service provider and its principals. Perform criminal background checks in sensitive outsourcing cases. Check references and otherwise investigate the service provider’s reputation. Investigate the service provider’s finances. Review audited financial statements. Investigate the service provider’s ability to deliver on its commitments and overall effectiveness. Investigate the service provider’s system of internal quality and other controls, its security history, and the extent to which it is audited, financially and otherwise.
What must be accomplished during DD by Experts and Specialists Check the service provider’s compliance history and the extent, if any, to which it has been subject to complaints, litigation, and regulatory actions. Pursue the service provider’s reliance on third party service providers. Check into the service provider’s insurance coverage. Investigate the service provider’s disaster recovery and business continuity plans. Consider intangibles, such as the service provider’s culture and business style and the service provider’s consequent “fit” with the institution. Consider other unique issues such as rating agency requirements.
Timelining SP selection SP audit check SP Operational check SP Law check Preparing draft decision and signing agreement 5 -7 days 14 -21 days 8 -10 days 4 -7 days 5 -10 days Ensure that the SP is a validly existing entity, and check its corporate history. Check the qualifications of the SP and its principals. Perform criminal background checks in sensitive outsourcing cases. Check references and otherwise investigate the SP’s reputation. Investigate the SP’s finances. Review audited financial statements. Investigate the SP’s ability to deliver on its commitments and overall effectiveness. Investigate the SP’s system of internal quality and other controls, its security history, and the extent to which it is audited, financially and otherwise. Check the SP’s compliance history and the extent, if any, to which it has been subject to complaints, litigation, and regulatory actions. Pursue the service provider’s reliance on third party SPs. SP – service provider
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Due diligence draft.pptx