Clarification about the “rapid phased prototyping (RPP) initiative” for banks and other federally insured institutions – a program designed to help accelerate the adoption of new technological solutions – is outlined in a letter issued Friday by the federal insurer of bank deposits.
In particular, the letter notes that banks are not obligated to participate in the program and won’t be required to adopt the solutions or reporting systems produced.
In its financial institution letter (FIL-19-2021), the Federal Deposit Insurance Corp. (FDIC) said it is providing information about the intent of the program, how participants were chosen, expectations of the agency in partnering with participants, responsibilities of banks that participate, and other provisions.
The FDIC describes the RPP (announced last June by the agency) as a competition designed to accelerate the adoption of modern technological solutions to help the FDIC fulfill its mission. “In particular, the solutions explore new ways to receive, manage, and analyze data from individual institutions, particularly community banks, without increasing compliance burdens,” the agency asserted.
Lessons learned from this competition, and future FDIC “tech sprints,” the agency said, will promote the safe and sound adoption of these technologies, helping banks and supporting consumers in the process.
Specific points outlined in the letter include:
- RPP competitors were selected through an FDIC-approved and -controlled competitive procurement process; agreements are between the FDIC and the RPP competitors and do not extend to any financial institution.
- Financial institutions are not obligated to collaborate with any RPP competitors; RPP competitors will independently determine whether they will seek to collaborate with FDIC-supervised financial institutions to receive feedback and input on proposed prototype designs.
- Banks will not be required to adopt the solutions or reporting systems produced by the RPP initiative; participation in solutions are voluntary.
- Financial institutions collaborating with an RPP competitor are responsible for complying with appropriate consumer protection laws, privacy laws, and other legal requirements.
- Information collected by RPP competitors in connectionwith the current RPP is not collected on behalf of or for the FDIC.
- During the course of any demonstrations or negotiations of prototype capabilities, the FDIC will work with the RPP competitors to ensure compliance with applicable consumer protection laws, privacy laws, and other legal requirements.