The risk that may occur when outsourced services or products are provided by a limited number of service providers or are concentrated in limited geographic locations. Significant negative economic, flexibility, resilience, and other consequences can result because of concentration risk.
Retrieved and adapted from Guidance on Managing Outsourcing Risk. Division of Banking Supervision and Regulation Division of Consumer and Community Affairs Board of Governors of the Federal Reserve System. (2018). https://www.federalreserve.gov/supervisionreg/srletters/sr1319a1.pdf