The Federal Reserve, FDIC and Office of the Comptroller of the Currency today issued a joint request for information on bank partnerships with financial technology companies to provide banking services. The agencies also released a related joint statement “to note potential risks related to arrangements between banks and third parties to deliver bank deposit products and services to end users.” The goal of the statement was to reemphasize existing guidance and does not establish new supervisory expectations, they said.
In the request for information, the agencies said they want public input on the nature of bank-fintech arrangements. They are also seeking input on effective risk management practices for fintech partnerships as well as their implications, “including whether enhancements to existing supervisory guidance may be helpful in addressing risks associated with these arrangements.”
“Bank-fintech arrangements can provide benefits; however, supervisory experience has highlighted a range of potential risks with these bank-fintech arrangements,” the agencies said. Comments are due 60 days following publication in the Federal Register.
As for the joint statement, it lists several potential risks when working with third parties, from overreliance on third parties to manage deposits to potentially misleading marketing about deposit insurance. The document also provides a list of effective risk management practices that banks may consider, such as developing assessments that identify and analyze risks specific to each arrangement.
“A bank’s use of third parties to perform certain activities does not diminish its responsibility to comply with all applicable laws and regulations,” the agencies said.
