After the outsourcing of an activity, senior management is still responsible for normal functioning of the bank. This is because the use of service providers does not relieve a financial institution’s board of directors and senior management of their responsibility to ensure that outsourced activities are conducted in a safe-and-sound manner and in compliance with applicable laws and regulations. Policies governing the use of service providers should be established and approved by the board of directors, or an executive committee of the board. This means that even though the activity has been outsourced, the senior management still has the responsibility to ensure that the activity is being conducted properly and in accordance with all relevant laws and regulations.

Choice A is incorrect. Even though an activity is outsourced, the responsibility for ensuring that the outsourced activities are conducted in a safe-and-sound manner and in compliance with applicable laws and regulations still lies with the senior management of the financial institution. The third party does not assume all responsibilities.

Choice B is incorrect. While it's true that both parties have some level of responsibility, it's not accurate to say they share equal or partial responsibility. The ultimate accountability for ensuring compliance and safety remains with senior management of the financial institution, regardless of any outsourcing arrangements.

Choice D is incorrect. It's certainly possible to outsource accounting services within a financial institution.