Information on our outsourcing policy for large New Zealand-incorporated registered banks. We define large banks as those with liabilities, net of amounts owed to related parties, of $10 billion or more.
Outsourcing occurs when a bank uses another party to perform business functions that would traditionally have been undertaken by the bank itself. Common examples of outsourced activities include IT processing, accounting and call centres.
Our outsourcing policy requires large banks to have the legal and practical ability to control and execute outsourced functions. It aims to ensure any outsourcing arrangement entered into by the bank does not compromise its ability to:
This is to ensure the impact of the failure of a large bank, or a service provider to a large bank, on the wider economy is minimised and to preserve options for the resolution of large bank failures.
A bank meets the objectives of the policy if it can achieve the following outcomes:
Further, a bank that is part of a foreign-owned banking group meets the policy objectives if it can achieve the outcomes described above as a stand-alone entity in the event of separation from its parent.
Our current policy on outsourcing (BS11) issued in September 2022 is available on the Banking prudential requirements page.
Read about banking prudential requirements
Supporting documents to the outsourcing policy are also available on the Banking Supervision Handbook page. These include:
We published a feedback statement for the consultation on the exposure draft for the revised outsourcing policy (BS11). We then published the final revised outsourcing policy for locally incorporated registered banks as a new Banking Supervision Handbook document – Outsourcing policy (BS11).
Download the feedback statement on outsourcing policy exposure draft consultation 2017 (PDF 143 KB)
Download the 2017 Outsourcing policy (BS11) (PDF 252 KB)
Following the release of final policy decisions in February 2017, we published an exposure draft for public consultation before finalising the wording of the final policy.
Consultation paper: Exposure draft for BS11: the Outsourcing Policy for Registered Banks (PDF 83KB)
Exposure draft for consultation (PDF 164KB)
Pre-approved functions and services for the purposes of BS11 (PDF 58KB)
White list for the purposes of BS11: Outsourcing policy for registered banks (PDF 58KB)
We published our final policy decisions, summary of submission feedback on 2015/2016 consultations, and regulatory impact statement.
Regulatory Impact Statement: Revised outsourcing policy (PDF 534KB)
We published a second consultation document changing some of the policy proposals in the 2015 consultation paper including:
Second consultation document: Review of the outsourcing policy for registered banks (PDF 214KB)
We consulted on potential changes arising out of the review of the outsourcing policy for registered banks. The consultation proposed retaining the policy's objectives and supported banks' continued use of outsourcing arrangements. It also proposed updating the objectives to better align with Open Bank Resolution and provide more clarity on the policy
First consultation document: Review of the outsourcing policy for registered banks (PDF 217KB)