By 
Three federal bank regulatory agencies announced on Thursday (July 25) that they are considering additional measures to ensure banks effectively manage risks associated with their partnerships with FinTech firms.
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corp. (FDIC), and the Office of the Comptroller of the Currency (OCC) released a joint statement addressing banks’ third-party deposit arrangements and issued a request for information on bank-FinTech collaborations.
The statement highlights potential risks linked to third-party arrangements for delivering bank deposit products and services. While the agencies support responsible innovation, they have identified several concerns regarding the management of these partnerships.
“The statement details the potential risks and provides examples of effective risk management practices for these arrangements,” the agencies said in the release. “In addition, the statement reminds banks of relevant existing legal requirements, guidance, and related resources, and provides insights that the agencies have gained through their supervision.”
Importantly, the statement does not establish new supervisory expectations.
The request for information, issued separately, covers a wide range of bank-FinTech arrangements, including those related to deposits, payments, and lending products and services.
“The agencies are seeking input on the nature and implications of bank-FinTech arrangements and effective risk management practices,” they stated in the release. “The agencies are considering whether additional steps could help ensure banks effectively manage risks associated with these various types of arrangements.”
A report found that in 2021, about two-thirds of banks and credit unions had partnered with a FinTech within the previous three years, and about nine out of 10 banks viewed partnerships with FinTechs as at least somewhat important.
Commenting on the evolving dynamic between banks and FinTechs, Charlie Youakim, CEO of Sezzle, stated, “Together, they are driving innovation, transforming financial services, and creating a more seamless and personalized banking experience for customers.”
Comments