2018 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 2018 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 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 2018, the FDIC’s annual operating budget and authorized staffing are approximately 48 percent and 34 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 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 2018, the FDIC will continue to pursue several ongoing initiatives to develop its future permanent workforce while addressing its shorter-term 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, including its oversight responsibilities required under the Dodd-Frank Act, 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 2018, 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.
The FDIC has expanded its interdivisional succession planning review to consider the current state of management talent at the FDIC and to 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 surveyed its non-supervisory employees to understand their interests in assuming leadership roles in the years to come. The FDIC plans to further the implementation of these and other efforts in 2018 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 2017, 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, BSA compliance, AML, and trust. 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 2018, 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 (D&I EAC), composed of key senior executives, oversees the implementation of the FDIC Diversity and Inclusion Strategic Plan, which was initially issued in 2013 and is annually reviewed and updated as needed.
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.
In 2017, the D&I EAC approved the FDIC’s first Disability Employment Program Strategic Plan, which established a goal to increase the percentage of persons with targeted disabilities to 2 percent or more of the FDIC workforce. In 2018, the FDIC will 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, fostering an inclusive environment for those individuals, and the progress made toward achieving an increase in the percentage of persons with targeted disabilities to 2 percent or more of the FDIC workforce.
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 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.
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 2018, the FDIC’s Corporate University 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.
The FDIC provides its workforce with the technical knowledge and skills necessary to examine and supervise financial institutions and manage receiverships. In 2018, 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 will be revised to better align with on-the-job training (OJT), so that new examiners start each phase of OJT more prepared for the exam tasks that they will be assigned.
The FDIC continues to provide training to resolution specialists on the multi-tiered structures of the deposit accounts, complex IT systems, and complicated financial statements they will most likely encounter during the resolution and receivership of large banks. Further, the FDIC is developing training on how to assess the requirements stipulated in 12 CFR Part 370, “Recordkeeping for Timely Deposit Insurance Determination.” Under this rule, each insured depository institution that has two million or more deposit accounts is required to (1) configure its information technology system to be capable of calculating the insured and uninsured amount in each deposit account by ownership right and capacity, and (2) maintain complete and accurate information needed by the FDIC to determine deposit insurance coverage with respect to each deposit account, except as otherwise provided.
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 2018, Corporate University will continue to deliver training when and where it is needed, including developing mobile learning tools and virtual learning experiences. Corporate University also will contribute to agency-wide crisis readiness through its strategic simulations program. In 2016 and 2017 this program supported several initiatives to gain understanding around large bank resolution through tabletops and simulations. Additional events are planned for 2018.
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 resources balances accessibility and security while providing scalable systems that are highly resilient.
In 2018, the FDIC will embark on a multifaceted effort intended to strengthen its information security and privacy, enhance continuity of operations, and improve enterprise architecture and governance, while addressing technology obsolescence risks and reducing maintenance costs by replacing obsolete platforms. This effort will optimize resources to take advantage of emerging innovative technologies.
Information Security and Privacy
Cybersecurity incidents are a growing threat to consumers, financial institutions, other businesses, and financial markets, as well as government agencies, including the FDIC. The FDIC’s 2018–2021 Information Security and Privacy Strategic Plan is the foundation upon which FDIC will enhance its cybersecurity and privacy capabilities. In 2018, the FDIC will develop a roadmap to operationalize the strategy by sequencing the activities needed to meet the strategic goals and objectives set forth in the plan. This roadmap will identify individual initiatives to be carried out over the next several years in pursuit of these goals and objectives, as well as performance measures to track and manage progress. In 2018, the FDIC will also 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.
Backup Data Center
All federal agencies must develop a contingency plan for information systems that support their missions. A catastrophic event affecting the Washington, D.C., metropolitan area or a major cyber event affecting IT systems could adversely affect the FDIC’s ability to conduct bank examinations, insure deposits, and manage receiverships. The FDIC must enhance its IT operational and information security resiliency and mitigate key risk areas to ensure that its mission-critical systems and databases can be restored to operation within acceptable timeframes.
In 2017, the FDIC identified systems and databases that supported mission critical functions and had to be available within 12–72 hours of a service interruption. In 2018 and 2019, the FDIC will implement a two-year project to migrate to a new commercial backup data center and modify the designated applications and infrastructure to facilitate timely recovery. By the end of 2018, the FDIC will contract for a replacement backup commercial data center and will have migrated at least half of the identified applications and databases to that data center. Additional security tools and capabilities will also be implemented in the new backup data center. The relocation will mitigate the risk associated with the geographic location of the FDIC data centers, mature disaster recovery expediency, and ensure stable and secure access to the data necessary to carry out the FDIC’s mission-critical functions.
IT Maturity, Enterprise Architecture, and Governance
The FDIC will continue to mature its enterprise information technology capabilities in 2018. Particular attention will be focused on the areas of IT governance, enterprise architecture, strategic management, and program and portfolio management. The FDIC has commenced the implementation of a robust enterprise IT Decision Framework to support IT decision-making consistent with the goals and objectives of the FDIC Strategic Plan and FDIC IT Strategic Plan. The IT governance processes will be streamlined to ensure that governance bodies receive timely information in a transparent manner to make informed decisions regarding IT expenditures.
In 2018, the FDIC will establish a technical advisory board to govern the enterprise architecture (EA). The board will ensure consistent and transparent adoption of and adherence to technical standards and EA principles. The EA program will update architectural standards, consistent with the updated EA Blueprint and EA Principles published at the end of 2017. The EA Blueprint established the vision for the FDIC target state consistent with the IT Strategic Plan approved in 2017. In 2018, the FDIC will develop roadmaps that define the transition to the target state. The roadmaps will provide a schedule for the integrated delivery of new IT initiatives that address requirements for the replacement and upgrade of existing technology, as well as the implementation of new technology to support the FDIC’s mission. In the area of strategic management, the FDIC will move toward a more structured and open strategic planning process involving stakeholders throughout the corporation. In the area of program and portfolio management, projects will be approved on a portfolio basis following the IT Decision Framework.
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 2018, the FDIC will actively focus attention on continuing to reduce data redundancy, enable seamless data access, and strengthen security of the overall data environment. The FDIC also will mitigate key risk areas (technology obsolescence and architecture) for the existing analytical environment used to process the large data sets the FDIC will be receiving in 2018 from federal agencies and other external sources. The FDIC also will continue to enhance data analytics capabilities as the use of large data sets expand and increase in size. This will provide the visualization and appropriate data analytics for senior executive to make the necessary decisions. Overall, these activities will help the FDIC achieve its mission in this increasingly complex financial environment.
The Enterprise Public Inquiry and Complaints Application
The Enterprise Public Inquiry and Complaints (EPIC) application serves as an enterprise solution to support the FDIC’s public inquiry and complaints processes on a new enterprise cloud platform. In 2017, the FDIC embarked on an effort to convert two legacy inquiry and complaint systems to EPIC: the Specialized Tracking and Reporting System (STARS) for consumer complaints and the Communication Tracking System-Ombudsman Automated Tracking System (CTS-OATS) for inquiries to the FDIC’s Office of Ombudsman. EPIC became operational in January 2018. In 2018, the FDIC will convert a third legacy system, the Customer Communications and Tracking System (CCATS), to EPIC.
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, project risk management, and audit follow-up. In 2018, the FDIC will continue to ensure that key financial operations and processes maintain sound internal controls, that these operations are appropriately managed, and that opportunities to improve the control environment are identified and implemented in an efficient and timely manner.
In 2018, the FDIC will focus on enhancing its enterprise risk management practices and improving its core business functions, with a continuing emphasis on activities associated with Dodd-Frank 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 will continue to be developed for critical operations and data mining capabilities will be enhanced to monitor exposure to improper payments. All of these efforts support processes to ensure that the foundation of controls remains strong throughout the FDIC.