Third-Party Provider Oversight

Definition ∞ Third-Party Provider Oversight refers to the systematic monitoring and management of risks associated with external entities that supply services or technology to an organization. This includes evaluating a provider’s security practices, operational resilience, and compliance with regulatory requirements. It ensures that outsourcing arrangements do not compromise an organization’s integrity.
Context ∞ In the digital finance sector, third-party provider oversight is increasingly important due to the reliance on various external services for custody, exchange, and infrastructure. Regulators are intensifying scrutiny on how financial institutions, including those dealing with digital assets, manage these relationships. This aims to mitigate risks like data breaches, service disruptions, and regulatory non-compliance.