In response to suggestions from banks and fintech suppliers, the Federal Reserve, working with different monetary regulatory companies, is growing a fintech vendor due diligence information for neighborhood banks, that would supply particular details about the paperwork and knowledge they should efficiently full their due diligence obligations, Federal Reserve Governor Michelle Bowman stated in a speech in the present day.
“The guidance would eliminate the need for community banks to navigate multiple supervisory guidance documents on the same issue,” Bowman stated throughout a digital assembly of the Unbiased Group Bankers of America. “It is my expectation that the combination of refreshed and aligned interagency guidance and the community bank due diligence guide will meaningfully enhance clarity on supervisory expectations for community bank partnerships with fintech companies.” The Federal Reserve can be planning to launch a white paper early subsequent yr that paperwork examples of neighborhood bank partnerships with fintech corporations and methods to handle that partnership.
Bowman added the Fed additionally will start proactively sending its service supplier supervision program reviews to banks beginning within the first quarter of 2021 and can be contemplating whether or not the rise of synthetic intelligence and machine studying in banking may require an adjustment in regulation and supervision. “AI is becoming more prevalent in customer service and machine learning can offer real opportunities to assess risk and find new customers,” stated Bowman.