Effective Management of Strategic Resources
The FDIC recognizes that it must effectively manage many critical strategic resources to successfully carry out the annual performance goals outlined in this plan. These resources must be aligned and deployed to the areas where they are most needed. An overview of planned 2020 initiatives to enhance the FDIC’s management of its key strategic resources is provided below.
Financial Resources Management
The FDIC does not use taxpayer funds. Its operational expenses are predominantly paid from the DIF, which is funded from assessments paid by insured financial institutions. The FDIC takes very seriously its fiduciary responsibilities to use these funds efficiently and cost-effectively to meet its mission responsibilities. To that end, the FDIC engages annually in a rigorous planning and budget formulation process to ensure that budgeted resources are properly aligned with workload projections and designated corporate priorities (see Appendix B).
The FDIC’s disciplined approach to managing its financial resources has been apparent over the past several years. The FDIC has approved and adhered to declining budgets for 10 consecutive years and declining staffing authorizations since 2012. This reflects, in large part, the recovery of the banking industry from the recent financial crisis, but it also reflects the ongoing commitment of staff throughout the corporation to prudently manage the FDIC’s expenses. For 2020, the FDIC’s annual operating budget and authorized staffing level decreased approximately 1.3 percent and 2.7 percent, respectively, from 2019 (see Appendix A).
Human Capital Management
The FDIC’s most important resource is the “intellectual capital” that its employees contribute to achieving its mission. For that reason, the FDIC strives to attract, develop, and retain a highly skilled, diverse, and results-oriented workforce and to be regarded as a preeminent employer among federal agencies.
More than one-third of the FDIC’s current permanent workforce is projected to retire over the next 10 years. This dynamic will enable the FDIC to reshape its permanent workforce to provide effective regulatory oversight and meet the emerging challenges of an increasingly complex U.S. financial system. In 2020, the FDIC will continue to pursue several ongoing initiatives to develop its future permanent workforce while effectively addressing its shorter-term staffing needs.
Strategic Workforce Planning and Readiness
Like many federal agencies, the FDIC faces potential succession management challenges as many of its long-term, experienced employees consider retirement.
In 2020, the FDIC will continue to implement strategies and programs to support the attainment of these objectives in meeting its long-term workforce needs. The FDIC continues to identify future workforce and leadership requirements, assess current workforce capabilities, support employees who aspire to leadership and management roles, and develop and source the talent to meet emerging workforce needs.
Organizational Efficiency for Large, Complex Financial Institutions
The FDIC is committed to addressing the unique challenges associated with the supervision and potential resolution of large, complex financial institutions. The agency’s ability to analyze and respond to risks in these institutions is particularly important, as the institutions comprise a significant share of banking industry assets and deposits. In 2019, the Division of Complex Institution Supervision and Resolution (CISR) was formed in order to centralize and integrate the FDIC’s operations related to the supervision and resolution of large, complex financial institutions, including SIFIs, financial market utilities (e.g., central counterparties), and all FDIC-insured depository institutions with assets greater than $100 billion for which the FDIC is not the primary federal regulatory authority. In 2020, CISR will continue its responsibility for supervision and monitoring and resolution planning and execution for large, complex financial institutions in the CISR portfolio.
Examiner Recruiting, Hiring, and Training
A key component of the FDIC’s long-term workforce development strategy continues to be developing the examiner workforce. Beginning in 2020, new examiner trainees will be hired directly into either the Division of Risk Management Supervision or the Division of Depositor and Consumer Protection and will immediately begin the training program in their assigned disciplines. This change resulted from a comprehensive review of entry-level examiner hiring conducted in 2019. It is intended to reduce attrition among trainees and newly-commissioned examiners and shorten the time required to earn a commission. The FDIC will also explore the use of loan review and IT and cyber security analysts to perform certain aspects of risk management examinations. These analysts should require less intensive training than commissioned examiners, which will reduce training time and costs. The FDIC will assess the impact of these changes on the examiner workforce, including time to hire, time to commission, retention, and workforce diversity.
Workforce Diversity and Inclusion
The FDIC continues its comprehensive, integrated, and strategic focus on diversity and inclusion within the FDIC workforce. The FDIC Diversity and Inclusion Executive Advisory Council (D&I EAC), composed of key senior executives, oversees the implementation of the FDIC Diversity and Inclusion Strategic Plan. In 2020, an updated three-year plan will be issued to comprehensively encompass the FDIC’s diversity and inclusion efforts by including significant aspects from the previous Disability Employment Program Strategic Plan.
The updated plan will continue to advance the FDIC’s progress in achieving greater workforce diversity through targeted recruiting and cultivating greater workplace inclusion through collaboration, flexibility, and fairness. The plan also ensures the sustainability of diversity and inclusion achievements by equipping leaders with the ability to manage diversity, monitor results, and refine approaches on the basis of actionable data. Specific steps to enhance diversity and inclusion at the FDIC in the areas of recruiting, hiring, succession planning, leadership engagement, analytics and reporting, training, communications, strategic planning, and performance management rating enhancements are detailed in the new plan.
The new plan covers all aspects of the FDIC’s diversity and inclusion efforts and retains the key goals, strategies, and actions specific to individuals with disabilities. This ensures that all employees are included in plan initiatives, while confirming the focus on the FDIC’s goal to maintain the percentage of persons with targeted disabilities to 2 percent or more of the FDIC workforce. In 2020, the FDIC will continue to monitor, track, and report to the D&I EAC on the implementation of the plan with respect to the hiring and advancement of individuals with disabilities, the maintenance of an inclusive environment for those individuals, and the progress made toward achieving the FDIC’s goal for the representation of persons with targeted disabilities in the FDIC workforce.
Over the past several years, the FDIC has participated in annual employee surveys conducted by the U.S. Office of Personnel Management. These surveys identified major areas of strength, as well as opportunities for improvement in employee satisfaction and engagement within the FDIC workforce.
Survey results have consistently demonstrated that FDIC employees have an excellent understanding of the FDIC’s mission and strategic direction and know how their work fits into the organization’s goals and priorities. They enjoy their work, believe it is important, and gain a sense of personal accomplishment from it. Employees also are highly satisfied with their pay and benefits, as well as the FDIC’s family-friendly work-life balance programs; physical work environment; and training, technology, and other resources.
In 2019, the FDIC launched a new employee engagement initiative, TEAM FDIC, in support of the Chairman’s priorities of Transparency, Empowerment, Accountability, and Mission. The initiative encourages active employee participation in short-term project teams to positively impact the FDIC workplace and support the FDIC mission. Employees submitted more than 60 project ideas resulting in seven Integrated Project Teams (IPTs) engaging more than 80 diverse employees from across the agency. Of the remainder, more than one-third of the ideas submitted are already being addressed through ongoing corporate initiatives, and all submitted ideas are reviewed and a response is provided. The FDIC will continue to increase employee engagement opportunities in 2020 by expanding the TEAM FDIC initiative to encourage employees to identify and propose solutions to challenges at the local and regional levels.
Employee Learning and Development
The FDIC provides employees with skills-based training and leadership development opportunities to help achieve its mission. The FDIC is modernizing learning and development, including expanding virtual and online offerings, integrating modern learning technology, and modernizing the training center. In 2020, the FDIC’s Corporate University (CU) will continue to offer innovative solutions to prepare both current and new employees for the challenges ahead. It also will continue to use its learning programs as opportunities to strengthen its organizational culture, build key competencies, and reinforce corporate values.
In 2020, the FDIC will continue to develop and implement the priority training components of the Division of Depositor and Consumer Protection and the Division of Risk Management Supervision, as approved by the divisions’ Training Oversight Committee. This work will ensure that examiner curricula reflect recent regulatory changes and expand the use of distance-learning methods to provide field staff with access to training resources. In addition, the examiner training courses are being revised to better align with on-the-job training, so that new examiners start each phase of that training more prepared for the exam tasks that they will be assigned.
The FDIC provides its workforce with the technical knowledge and skills necessary to examine and supervise financial institutions and manage receiverships. The FDIC continues to provide training to resolution specialists on the multi-tiered structures of deposit accounts, complex IT systems, and complicated financial statements they will most likely encounter during the resolution and receivership of large banks.
In addition to technical training, the FDIC is focused on developing employees as leaders at all levels of the organization. The FDIC has a comprehensive leadership development curriculum that consists of core courses, electives, and enrichment activities. The FDIC also provides consultative services to managers and delivers custom leadership training for intact teams. In 2020, CU will continue to deliver training when and where it is needed, including developing mobile learning tools and virtual learning experiences. CU also will contribute to agency-wide crisis readiness through its strategic simulations program (SSP). In 2020, SSP intends to play an even larger role in agency-wide crisis readiness by expanding its scope to include strategic forecasting and coordination among FDIC divisions and the broader financial regulatory community, both within the U.S. and internationally.
FDIC employees and leaders have a long tradition of responding effectively in times of crisis, while continuing to execute day-to-day mission requirements. Through further development of its human capital strategies, the FDIC will work to ensure that the future FDIC workforce is as prepared, capable, and dedicated as the one it has today.
Management of Information Technology Resources
More than ever before, the FDIC relies on modern, secure IT to achieve its mission. The advent of advanced IT capabilities, from real-time collaboration to artificial intelligence and machine learning (AI/ML), offer new opportunities for the FDIC to conduct its core business with greater efficiency while protecting sensitive FDIC information. The FDIC is committed to providing a robust, resilient, and secure IT environment that supports emerging business needs, promotes efficient operations, and improves the effectiveness of FDIC engagement with regulated institutions and the public. To effectively manage its IT resources, the FDIC will evaluate market innovations that can help modernize its portfolio of legacy IT systems, strengthen the IT infrastructure that serves its workforce and mission constituents, and implement new core business capabilities.
The FDIC is committed to improving its technology, people, and processes. The current IT environment is heavily dependent on outdated legacy applications and platforms that are run in an on-site data center. The FDIC will seek opportunities to increase agility by transitioning to low-code/no-code, cloud-based applications and revamping existing processes to improve the management of IT projects and portfolios. The FDIC will also implement solutions to maintain and improve its cybersecurity posture to address emerging threats and regulatory needs. Finally, the FDIC will pursue initiatives to re-shape its workforce by identifying and addressing new IT skill requirements through targeted training and recruiting efforts.
IT Modernization Plan and Roadmap
In 2020, and over the next five years, the FDIC will embark on a wide range of application, data, and structural initiatives defined in its newly developed IT Modernization Plan and Roadmap, 2020-2024. The plan guides the FDIC’s technology activities and spending priorities over the next five years, and is based on an update of the Corporation’s IT Strategic Plan that seeks to more closely align the vision and direction of the FDIC’s information management and technology programs with the accomplishment of the FDIC's core mission responsibilities and the needs of its business lines. It establishes the FDIC’s target architecture and outlines a comprehensive five-year plan to modernize legacy IT systems and embrace emerging technologies to drive business innovation and efficiencies and support emerging business needs. This will be accomplished through the implementation of an agile and responsive IT environment that is characterized by increased collaboration with the FDIC’s business organizations.
The IT Modernization Plan and Roadmap identifies six business drivers that express the optimal target state to support the business. Four of those drivers emphasize support for FDIC business lines and improved interactions with FDIC stakeholders: Supervision Modernization, Crisis Preparedness, Streamlined Stakeholder Interactions, and Data as a Corporate Resource. Planned 2020 initiatives to address those drivers include projects to modernize key legacy applications, support streamlined interactions with financial institutions, redesign public-facing applications, begin implementation of new technologies such as AI/ML, and optimize the way data is used by the FDIC and its stakeholders.
The remaining business drivers focus on improving the FDIC’s technology environment by promoting a Digital Workforce and providing Resilient and Cost-Effective Corporate Support. Digital Workforce initiatives seek to allow staff to perform work unencumbered by limitations related to technology, geography, or manual processes. Planned 2020 initiatives include several projects to foster collaboration, modernize training, and expand communication capabilities. Resilient and Cost-Effective Corporate Support initiatives address the technology needs of FDIC support organizations, and support internal IT operational improvements. In 2020, the FDIC also plans to embark on initiatives to improve financial and acquisition management.
Information Security and Privacy
Cybersecurity risk management will remain a priority as security threats and information system vulnerabilities become more complex, particularly in conjunction with the transition to cloud-based platforms provided by third parties. The FDIC has incorporated into the IT Modernization Plan and Roadmap initiatives that continue to build upon the principles set forth in the FDIC Information Security and Privacy Strategic Plan to mature cybersecurity capabilities to ensure the continued confidentiality, availability, and integrity of FDIC systems and data. In 2020, the FDIC will continue to partner with other federal agencies by using common tools and providing the necessary monitoring and detection information to the federal dashboard, thus contributing to the nation’s overall cybersecurity strategy. In addition, the FDIC will continue to implement current and emerging federal information security regulations, policies, and practices, including those governing the collection, access, and use of data to execute the FDIC’s mission.
The FDIC has long recognized that data is one of its most important resources, both for internal use and for dissemination to the financial industry and other stakeholders. As part of the IT Modernization Plan and Roadmap, the FDIC will strengthen its data governance, while addressing projects to maximize efficient data utilization. The effective management of data across the FDIC is central to fulfilling the supervisory, insurance, and resolution functions. Managing and governing FDIC data as a corporate resource is fundamental to empowering FDIC staff at all levels of the organization, to perform analysis, support operations, and conduct research to enable sound, evidence-based decision-making. Equally important is the need to protect and secure sensitive data and information from unauthorized access or misuse, which requires a corporate understanding and visibility across the entire organization.
In 2020, the FDIC will launch the Enterprise Data Governance Group (EDGG), chaired by the Chief Information Officer (CIO), that will be tasked with the development of an enterprise data management strategy and the implementation of a new enterprise data governance framework. The FDIC will also establish an AI/ML platform to explore more effective utilization of data within the supervision environment. Additional 2020 projects that will enhance the FDIC’s data governance and management capabilities include the formalization of the target data architecture, implementation of a data literacy program, and the identification of requirements for an enterprise data catalog.
Enterprise Risk Management and Internal Control
As an integral part of its stewardship of the DIF, the FDIC maintains a comprehensive risk management and internal control program designed to identify and mitigate enterprise risks and improve the efficiency, effectiveness, and control of internal operations. Enterprise Risk Management (ERM) is a way to identify, prioritize, and manage risk across the corporation. The FDIC’s ERM program aims to address the full spectrum of significant internal and external risks facing the corporation and the combined impact of those risks as an interrelated portfolio. In 2020, the FDIC will continue to identify and implement risk-mitigation activities to address risks identified in the FDIC’s corporate Risk Inventory. In addition, the FDIC will deliver corporate-wide ERM training; raise ERM program awareness in the regions; and report to the Chairman, Operating Committee, and Audit Committee, on a routine basis.
The FDIC’s internal control program includes the plans, methods, polices, and procedures that provide reasonable assurance that management’s objectives are achieved, operations are effective and efficient, reporting is reliable for internal and external use, and the FDIC follows applicable laws and regulations. In 2020, the FDIC will continue to ensure that key financial operations and processes maintain sound internal controls, operations are appropriately managed, and opportunities to improve the control environment are identified and implemented in an efficient and timely manner. The FDIC anticipates focusing specifically on controls related to information security management, supply chain risk management, crises readiness, system development, acquisition efficiency and effectiveness, and model risk management.
The FDIC will continue to review a sample of transactions and invoices to confirm management attestations regarding financial reporting and internal control procedures. The FDIC will also continue to develop process maps for critical operations and enhance data mining capabilities to monitor exposure to improper payments. All of these efforts help to ensure that internal control remains strong throughout the FDIC.