Senior regulatory officials said they are considering ways to reduce burdens banks face when partnering with third-party service providers, including fintech firms. In a Q&A session today at ABA’s Risk and Compliance Virtual Conference, the FDIC’s Leonard Chanin discussed a recent RFI from his agency seeking feedback on establishing a standard-setting body that could conduct due diligence on and certify third-party providers.
“What we found out in talking with lots of different organizations—banks and nonbanks—is the onboarding process for fintechs . . . is timely, it is very costly to do,” Chanin said. “We think this would resolve many of the problems and, concerns we’ve had, particularly for community banks that are struggling to adopt new technologies simply because of the cost and the burdens that that onboarding process places on them.”
The FDIC hopes to eventually propose and finalize a rule based on feedback received from the RFI, Chanin said, and noted that the agency would likely be a member of the standards-setting body if it were to be formed. He also added that participation in such a certification process would be voluntary.
Meanwhile, the OCC’s Grovetta Gardineer said her agency is similarly exploring ways to reduce the burdens standing in the way of successful bank/third-party partnerships, given the fact that “one of the keys to banks’ longevity in this day and time is partnering with other companies.”