FDIC Launches Initiatives on Fintech and Financial Reporting by Banks
FDIC issued a request for information on the potential for a public or private standard-setting partnership and voluntary certification program to promote the efficient and effective adoption of innovative technologies at FDIC-supervised financial institutions. The request for information, released as part of the FDiTech initiative, asks whether the proposed program might reduce the regulatory and operational uncertainty that may prevent financial institutions from deploying new technology or entering into partnerships with technology firms. Comments must be received by September 22, 2020. In addition, FDIC announced the start of a rapid prototyping competition to help develop a new and innovative approach to financial reporting, particularly for community banks.
With respect to the financial reporting initiative of FDIC, twenty technology firms from across the country have been invited to participate in the competition. The participating firms will develop proposed solutions over the next several months and present them to FDIC for consideration; these firms represent leaders in the financial services, data management, data analytics, and artificial intelligence or machine learning fields. These modern tools—and lessons learned in future competitions—are expected to help make financial reporting seamless and less burdensome for banks, provide more timely and granular data to the FDIC on industry health, and promote more efficient supervision of individual banks.
Meanwhile, the FDIC request for information seeks input on whether a standard-setting and voluntary-certification program could be established to support financial institutions' efforts to implement certain models (such as credit underwriting models) and manage model risk by certifying or assessing certain aspects of the models. Input is also sought on whether this program could be established to conduct due diligence of third-party providers of technology and other services by certifying or assessing certain aspects of the third-party providers' operations or condition. FDIC is especially interested in information on models and technology services developed and provided by financial technology companies, also referred to as fintechs.
In terms of input, FDIC is interested in comments regarding initial due diligence and ongoing monitoring elements associated with third-party providers of technology and other services that support a financial institution's financial and banking activities such as deposit, lending, and payment functions. FDIC also is interested in comments regarding due diligence for other types of providers such as third-party providers that support a financial institution's corporate activities such as payroll and human resources. FDIC seeks public input regarding all aspects of establishing a standard-setting organization, qualifying certification organizations, and implementing a voluntary conformity assessment process. FDIC is also considering, and seeking comments on, whether and how the FDIC supervisory and examination efforts would need to be modified to facilitate a financial institution's use of a certified model or a certified third party of outsourced technology services.
Related Links
- Press Release on Certification Program
- Federal Register Notice on Certification Program
- FDIC Letter on Certification Program
- Press Release on Financial Reporting Initiative
Comment Due Date: September 22, 2020
Keywords: Americas, US, Banking, Fintech, FDiTech, Operational Risk, Outsourcing Arrangements, Artificial Intelligence, Machine Learning, Reporting, Credit Risk, Third-Party Arrangements, FDIC
Featured Experts

Scott Dietz
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.

Laurent Birade
Advises U.S. and Canadian financial institutions on risk and finance integration, CCAR/DFAST stress testing, IFRS9 and CECL credit loss reserving, and credit risk practices.

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Previous Article
Bundesbank Publishes Guidelines for AnaCredit ReportingRelated Articles
ISSB Sustainability Standards Expected to Become Global Baseline
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
BCBS Assesses NSFR and Large Exposures Rules in US
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.
Global Agencies Focus on ESG Data, Climate Litigation and Nature Risks
At the global level, supervisory efforts are increasingly focused on addressing climate risks via better quality data and innovative use of technologies such as generative artificial intelligence (AI) and blockchain.
ISSB Standards Shine Spotlight on Comparability of ESG Disclosures
The finalization of the IFRS sustainability disclosure standards in late June 2023 has brought to the forefront the themes of the harmonization of sustainability disclosures
EBA Issues Several Regulatory and Reporting Updates for Banks
The European Banking Authority (EBA) recently issued several regulatory publications impacting the banking sector.
BCBS Proposes to Revise Core Principles for Banking Supervision
The Basel Committee on Banking Supervision (BCBS) launched a consultation on revisions to the core principles for effective banking supervision, with the comment period ending on October 06, 2023.
US Proposes Final Basel Rules, Transition Period to Start in July 2025
The U.S. banking agencies (FDIC, FED, and OCC) recently proposed rules implementing the final Basel III reforms, also known as the Basel III Endgame.
FSB Report Outlines Next Steps for Climate Risk Roadmap
The Financial Stability Board (FSB) recently published the second annual progress report on the July 2021 roadmap to address climate-related financial risks.
EBA Plans on Ad-hoc ESG Data Collection and Climate Scenario Exercise
The recognition of climate change as a systemic risk to the global economy has further intensified regulatory and supervisory focus on monitoring of the environmental, social, and governance (ESG) risks.