QUICK DEFINITION
Third-Party Risk — Operational, cyber and compliance risk introduced by external providers and service relationships.
WHY IT MATTERS
Why Third-Party Risk matters in finance
Outsourcing a function does not remove the institution’s dependence on its availability and security.
FINANCIAL SYSTEM CONTEXT
← Back to the Financial Security GlossarySecurity is also a market-infrastructure question
In financial services, third-party risk should be understood in relation to operational continuity, data integrity, payments, market infrastructure and interconnected dependencies. A control can be technically effective while still leaving material resilience risk if critical services cannot continue or recover during disruption.