The facility of a public/private standards-setting company to assist banks embrace third-party monetary innovation services is a concept that is worthy of additional factor to consider, FDIC Vice Chairman Travis Hill stated today. During a speech about technological development in banking, Hill kept in mind that the FDIC launched an ask for info on the advancement of such an SSO in 2020. The company has actually given that made little development on the proposition, however Hill stated it deserved reviewing.
“Working with the private sector and the federal banking agencies, the SSO would develop standards for due diligence and emerging technologies,” Hill stated. “This would enable banks to onboard fintechs and technologies that had received a ‘seal of approval,’ reducing the need for each bank to conduct costly, time-consuming due diligence of its own. Banks would still be responsible for managing risks associated with third parties, including those related to consumer protection, just as they are today.”
Hill likewise stated that neighborhood banks deal with obstacles in embracing brand-new innovations, from an absence of monetary resources to regulators in some cases standing in the method. “Regulators need to engage with banks, with technology firms, with private sector experts and with consumers to better understand how technology is changing the industry and how to foster a regulatory environment that is conducive to innovation,” Hill stated. “This requires working to identify and remove impediments to technology adoption, and reducing regulatory uncertainty.”