FRM Part II · FRM Exam Part II · Digital Resilience and Financial Stability: The Quest for Policy Tools in the Financial Sector

A bank's risk team reviews its contract with a critical ICT provider. Which clause most directly strengthens the bank's ability to manage the risk of the provider failing and the bank needing to move services elsewhere?

A tested exit and transition plan with data portability and termination assistance best strengthens resilience. It lets the bank move critical services to another provider or in-house if the vendor fails, reducing lock-in, whereas limited audit rights or discretionary incident reporting weaken oversight.

1. AA well-tested exit and transition plan with data portability and termination assistanceCorrect
2. BA clause allowing the provider to set its own incident notification timing
3. CA marketing agreement giving the provider co-branding rights
4. DA cap on the bank's right to audit the provider to once per decade