2017 Annual Performance Plan
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 2017 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 Deposit Insurance Fund (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 make sure 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. From 2008 through 2010, the FDIC’s annual operating budget almost quadrupled and its authorized staffing level almost doubled in response to a rapid increase in the number of problem institutions and insured depository institution failures. The FDIC relied primarily on nonpermanent staff and contractor resources to address the resulting uptick in its supervisory and resolutions workload in order to facilitate future budget and staffing reductions when workload returned to more normal levels. In subsequent years, both the annual operating budget and authorized staffing level declined substantially. For 2017, the FDIC’s annual operating budget and authorized staffing are approximately 46 percent and 30 percent, respectively, below the peak levels experienced in 2010 and 2011 (see Appendix A). The FDIC will continue to carefully monitor both its supervision and receivership management workload and will take steps to further reduce expenses for these programs as underlying workload declines.
Human Capital Management
The FDIC’s most important resource is the “intellectual capital” that its employees bring to bear on the accomplishment of 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 place to work among federal agencies, especially those whose workforces consist primarily of financial professionals. More than one-quarter of the FDIC’s current permanent workforce is projected to retire over the next ten years. This will provide the FDIC a unique opportunity to reshape its permanent workforce to provide effective regulatory oversight to meet the emerging challenges of an increasingly complex U.S. financial system in the 21st century. In 2017, the FDIC will continue to pursue several ongoing initiatives to shape its future permanent workforce while addressing immediate staffing needs.
Workforce Development Initiative
Like many other federal agencies, the FDIC faces potential succession management challenges as many of its long-term, experienced employees retire. Introduced in 2013, the FDIC’s Workforce Development Initiative emphasizes the need to prepare employees to fulfill current and future workforce capability and leadership needs. This focus ensures that the FDIC has a workforce positioned to meet today’s core responsibilities while preparing to fulfill its mission in the years ahead.
The Workforce Development Initiative is designed to address comprehensive succession planning needs and workforce development challenges and opportunities. The initiative is focused on four broad objectives: to attract and develop talented employees across the agency; to enhance the capabilities of employees through training and diverse work experiences; to encourage employees to engage in active career development planning and seek leadership roles in the FDIC; and to build on and strengthen the FDIC’s operations to support these efforts.
In 2017, the FDIC will continue to develop and implement the strategies, programs, and infrastructure to support the attainment of these objectives in meeting its long-term workforce needs. The FDIC is in the early stages of a multi-year effort 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.
During 2016, the FDIC expanded its interdivisional succession planning review to consider the current state of management talent at the FDIC and establish developmental recommendations for aspiring senior leaders. The long-term goal of the effort is to increase the pool of capable employees eligible to apply for leadership positions through a systematic, deliberate approach to cultivating leadership talent. In 2017, the FDIC plans to further the implementation of these and other efforts to achieve the goals of the Workforce Development Initiative.
A key component of the FDIC’s long-term workforce development strategy continues to be the Corporate Employee Program (CEP). The CEP is the primary vehicle used to fill new, entry-level positions in the FDIC’s core bank supervision and resolutions and receivership management functions. Once employees complete the CEP training program and are commissioned in their assigned disciplines, they have numerous opportunities to further their expertise in particular specialized areas.
In 2016, the FDIC continued a multi-year effort to develop more advanced skills through rigorous and structured training programs for specialists in such areas as accounting, capital markets, information technology, Bank Secrecy Act compliance, anti-fraud, anti-money laundering, trust, and a variety of other specialized areas. The FDIC also provides opportunities to prepare employees for managerial and leadership positions.
Another outgrowth of the FDIC’s strategic workforce planning is an employee development program designed to expand the number of FDIC employees who have broad, cross-divisional experience with the largest and most complex FDIC-insured banks and bank holding companies. The program provides experience in supervision, risk analysis and monitoring, deposit insurance pricing and fund management, and resolution planning.
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.
Workforce Diversity and Inclusion
In 2017, the FDIC will continue to pursue a more comprehensive, integrated, and strategic focus on diversity and inclusion within the FDIC workforce. The FDIC Diversity and Inclusion Executive Advisory Council, composed of key senior executives, oversees the implementation of the FDIC Diversity and Inclusion Strategic Plan, which was initially issued in early 2013 and is updated annually.
The plan lays out a course for achieving workforce diversity through targeted recruiting; cultivating greater workplace inclusion through collaboration, flexibility, and fairness; and ensuring 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. The plan details 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.
A Culture of Workplace Excellence
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 are also 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.
The FDIC’s Workplace Excellence (WE) Program plays an important role in helping the FDIC maintain a culture of excellence. The WE Program is composed of a National WE Steering Committee and individual Division/Office WE Councils focused on maintaining, enhancing, and institutionalizing positive workplace and cultural change at the national and division/office levels at the FDIC. The WE Program enhances communication, provides additional opportunities for employee input and engagement, and promotes employee empowerment.
Employee Learning and Development
The FDIC provides employees with skills-based training and leadership development opportunities to help achieve its mission. In 2017, the FDIC’s Corporate University will continue to offer innovative solutions to prepare both current and new employees for the challenges ahead. It will also continue to use its learning programs as opportunities to strengthen its organizational culture, build key competencies, and reinforce corporate values.
The FDIC provides its workforce with the technical knowledge and skills necessary to examine and supervise financial institutions and manage receiverships. In 2017, the FDIC will continue to develop and implement the priority training components of the Division of Depositor and Consumer Protection (DCP) and the Division of Risk Management Supervision (RMS), 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.
Having concluded a three-year effort to develop a comprehensive curriculum to provide foundational knowledge, specialized skills, and cross-training opportunities across functions for employees in the Division of Resolutions and Receiverships (DRR), the FDIC will incorporate learning and development strategies to ensure readiness for future resolutions and receiverships activity. In support of the FDIC’s responsibilities for the possible orderly liquidation of a systemically important financial company, facilitated discussions and tabletop exercises will continue to be used to enhance strategic and operational readiness, build interagency relationships, and implement and test new policies and procedures.
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. In 2016, the FDIC launched a transition program for new executives, delivered four new elective courses, and increased delivery of custom training by 30 percent. In 2017, the FDIC will continue to deliver both core and elective courses and will focus on curriculum updates, the introduction of new elective topics, and development and delivery of the 2017 required supervisory training on the topic of change management.
Management of Information Technology Resources
Reliable, up-to-date, and secure information technology (IT) is essential to accomplishing the FDIC’s mission. The FDIC’s ability to preserve and promote confidence in the U.S. financial system requires safeguarding critical FDIC information from those who would compromise it, while providing responsive access to those with appropriate authority. Effective management of the FDIC’s IT balances accessibility and security while providing scalable systems that are highly resilient.
In 2017, the FDIC will embark on a multifaceted effort intended to strengthen its information security and privacy, enhance continuity of operations, and improve use of enterprise architecture and mobility, while more fully utilizing information analytics to enhance the delivery of IT service to the FDIC and its supporting partners. This effort will optimize resources collaboratively to take advantage of emerging innovative technologies.
Information Security and Privacy
Cyber-attacks and data breaches are a growing threat to banks, businesses, financial markets, utilities, and the FDIC. During 2017, the FDIC will prioritize its efforts to protect its networks and data from unauthorized access, data breaches, and intrusions. This includes implementing technology protections that will give system access only to authorized users. As part of this effort, the FDIC will expand the use of multi-factor authentication (MFA) similar to that already in use in corporations and other Federal agencies. The FDIC also will explore and implement technologies that can improve the Corporation’s ability to classify corporate data and protect sensitive data from unauthorized sharing as it travels outside FDIC’s security perimeter. This includes implementing more stringent policy and management controls to identify information wherever it resides and assign safeguarding requirements to information according to its sensitivity and risk.
In 2017, 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.
Continuity of Operations (COOP)
The FDIC has been classified as a Category II FEMA organization. The Presidential Policy Directive 40 that was issued in July 2016 requires that Category II FEMA systems providing mission essential functions (MEFs) be in a continuous operating mode, superseding the prior 12-hour recovery time requirement. As a result, the FDIC must create appropriate plans to comply with this directive and determine how best to modernize IT systems supporting these MEFs to operate in that mode.
In 2017, the FDIC will begin to implement plans to migrate these systems to a platform that meets COOP requirements, mitigates the risk associated with the geographic location of its data centers, and ensures stable and secure access to the data necessary to carry out its MEFs. It will also complete the migration of its commodity email services to a cloud-based environment.
Consistent with Federal “Cloud First” policy, the FDIC will evaluate safe, secure cloud computing options before making any new investments. As appropriate, new applications will be developed to realize the benefits of cloud computing. In conjunction with its consideration of cloud computing options, the FDIC will also evaluate its current enterprise architecture program to ensure that it has a stable and robust enterprise architecture that is consistent with FDIC’s needs and is attainable through the available IT marketplace. In 2017, the FDIC will start the development of IT roadmaps for each business division that integrate the delivery of new IT initiatives with business goals.
Information Management and Analytics
As the financial industry grows increasingly complex, so too does the expectation that the FDIC will take increasing advantage of large volumes of structured and unstructured public and non-public data. Information Management and Analytics, therefore, will be a strategic corporate focus area for the foreseeable future.
During 2017, the FDIC will actively focus attention on improving the Enterprise Data Warehouse (EDW), which is the basis for improved analysis, reporting, and application development. The EDW will facilitate the use of large data sets, open data, and unstructured information to provide the FDIC more complete analyses and visualization. These tools help the FDIC to achieve its mission in this increasingly complex financial environment.
As an integral part of its stewardship of the DIF, the FDIC maintains a comprehensive risk management and internal controls program that is designed to improve the efficiency, effectiveness, control, and risk-focus of internal operations. Staff in the FDIC’s internal controls program advise and assist with issues such as risk management, internal controls, system security, privacy, operational effectiveness and efficiency, post-project reviews, and audit follow-up. As the FDIC transitions back to post-crisis operational status, those efforts will return to ensuring that key financial operations and processes maintain sound internal controls. The goal will be to ensure that these operations are managed appropriately and that opportunities to improve the control environment are identified and implemented in an efficient and timely manner.
In 2017, the FDIC will focus on improving its core business functions, with a continuing emphasis on activities associated with DFA Title II implementation, system security management, system development risk management, enhanced performance metrics, and the operational risks accompanying client-led development. The FDIC also will continue to review a sample of transactions and invoices to confirm management attestations that financial reporting and internal control procedures have been correctly followed. Process maps are being developed for critical operations, and billing reviews will be performed on high-dollar contracts as part of monitoring exposure to improper payments. All of these efforts support processes to ensure that the foundation of controls remains strong throughout the FDIC.
In 2016, the FDIC piloted the implementation of policies and controls to govern internal decision support models used by its divisions and offices. This comprehensive, corporate-wide model validation program will continue in 2017. This program will ensure that FDIC models are sound through routine testing and evaluation, which is carried out according to tailored model validation programs approved by FDIC senior management.