Readiness for crises, cybersecurity for banks and third-party service providers, and support for underserved communities in banking are the three top challenges for the federal deposit insurance agency, according to report issued Thursday by its inspector general.
In its annual assessment of the top management and performance challenges facing the Federal Deposit Insurance Corporation (FDIC) – which is designed to summarize the most serious challenges facing the agency and outline its progress to address them – the FDIC’s Office of Inspector General (OIG) said it identified nine top challenges.
Rounding out the nine for the agency are:
- organizational governance;
- information technology security;
- security and privacy;
- collection, analysis, and use of data;
- contracting and supply chain management; and
- human resources.
“This Top Management and Performance Challenges (TMPC) document summarizes the most serious challenges facing the FDIC and briefly assesses the Agency’s progress to address them,” the report states in its executive summary. “This TMPC report is based on the OIG’s experience and observations from our oversight work, reports by other oversight bodies, review of academic and relevant literature, perspectives from Government agencies and officials, and information from private-sector entities.”
Key areas of concern for the top three challenges, the report states, are:
- Readiness for crisis: Improving the crisis readiness framework at the agency and coordination with other financial regulators; addressing climate-related risks to banks; and supervising and examining banks for the risks associated with government-guaranteed loans and fraud. The report notes that the OIG has identified crisis readiness as a “top challenge” since 2018.
- Cybersecurity: Ensuring that agency exams adequately assess and address cybersecurity risks at financial institutions and their third-party service providers (TSP); ensuring that banks report serious cyber security incidents to the FDIC in a timely manner so that the agency may take appropriate action; and supervising and managing risks associated with crypto assets. FDIC noted that cybersecurity has been a “top challenge” since 2018, “particularly with respect to TSPs and emerging technologies.”
- Support for underserved communities: Fostering financial inclusion for the unbanked and underbanked; and understanding bias risk associated with technology. The agency said it has listed this area as a “top challenge” since 2020.