On June 30, 2020, the Federal Deposit Insurance Corporation (the “FDIC”) announced the start of a rapid prototyping competition among 20 data and technology firms to develop a new and innovative approach to financial reporting. This competition aims to modernize the current “call reports” that FDIC insured banking institutions, including 3,200 community banks, are required to file on a quarterly basis. The FDIC has declined to identify the 20 data and technology firms invited to compete but acknowledges that they are leaders in the financial services, data management, data analytics, and AI/ML fields.
This is a significant step by the FDIC towards embracing the potential efficiencies of regulatory technology as an alternative to legacy reporting practices. In its press release announcing the competition, the FDIC stated, “[t]hese modern tools – and lessons learned in future competitions – will 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.” This emphasis on more meaningful, real time data and reducing the burden on smaller financial institutions has the potential for improved regulatory oversight and simplified reporting requirements.
The FDIC anticipates that this competition will yield a prototype reporting system in the next six months.
