Bank outsourcing agreement with a foreign supplier

We provided advice to a Foreign anti-fraud system provider on the following project:

CONCLUSION OF AN OUTSOURCING AGREEMENT WITH A POLISH BANK REGARDING THE USE OF ANTI-FRAUD SYSTEMS PROVIDED BY A FOREIGN SUPPLIER

• Identity theft and phishing of customer data are the scourge of modern on-line banking. Meanwhile, AML regulations require reliable identification and verification of customers’ identities before establishing business contacts. On the other hand, the execution of fraudulent transactions may render the provider of payment services legally liable due to unauthorized payment transactions.
• Therefore, providers, including banks are using modern anti-fraud systems delivered by third party technology providers (fraud intelligence/fraud detection) more and more often. Outsourcing of operational activities by a bank to external entities often entails a number of requirements stemming from the applicable regulations governing the so-called bank outsourcing. Such requirements also indirectly affect the insourcer (agency agreement, regulation of the use of services provided by sub-insourcers, BCP). Additional requirements are set forth in EBA guidelines and notices of the Polish Financial Supervision Authority. Furthermore, the Polish Financial Supervision Authority shall give permission to the execution of an agreement with an entrepreneur not domiciled in a Member State or in the event when the said agreement is to be performed outside such Member State.
• From the insourcer’s perspective, it is crucial that the outsourcing contract, despite regulatory requirements limiting the freedom of contracting parties, adequately protects the interests of the insourcer.

DLK advisory services included:

• Legal opinion on the regulatory requirements imposed on Polish banks wishing to use the services of the foreign technology provider.
• Negotiation of contracts with Polish commercial banks to ensure contractual balance and protection of the rights and interests of the foreign service provider in the face of regulatory requirements for the content of such contracts.