106. Supervisors may use third parties (such as external consultants or auditors) to support their AML/CFT functions. While these activities can provide useful expertise and conserve key resources for the most important functions, ultimately the responsibility remains with supervisors to ensure compliance with their supervisory obligations. This section highlights some of the opportunities and risks that supervisors should be aware of in this context.

107. It is essential to strike the right balance between internal capacity building and use of third parties. The priority should be building the internal capacity of the supervisory authorities to fulfil their functions effectively and independently. This includes adequate number of in-house staff who are equipped with a range of skills and qualifications. Using third parties in AML/CFT tasks may have some efficiencies. However, overreliance or dependence on third parties can undermine the building of internal expertise and capacity.

108. Use of third parties has become more relevant especially as the financial sector's level of sophistication has increased with respect to innovations in financial products and services (e.g., 'FinTech'), business models, and IT capabilities. Therefore, the ability to tap into the expertise of financial engineers, IT experts, data scientists, and other professionals in supervisory activities becomes essential for effective supervision.