Rapid Phased Prototyping (RPP)


As an important part of FDITECH, the Rapid Phased Prototyping Competition is designed to accelerate the adoption of modern technological tools to help financial institutions, particularly community banks, provide more timely and granular data to the FDIC in a more effective and efficient manner. In addition, these new tools will help the FDIC gain greater insight into the financial health of these institutions and allow for more efficient supervision. The FDIC intends to rely upon a ‘Rapid Phased Prototyping’ approach in this and future competitions.

Status as of April 2021: All companies demonstrated their final prototypes in March 2021 and the FDIC is now determining whether any should be selected for production contract negotiation. Additionally, in March 2021, the FDIC issued a Financial Institution Letter providing information and clarification for FDIC-supervised financial institutions.

What is Rapid Phased Prototyping?


Rapid phased prototyping “allows developers and government R&D organizations to quickly demonstrate potential solutions that meet urgent requirements, bring technologies to maturity and integrate them into the solution space, and highlight advantages over alternative options.”1

The FDIC is excited to launch the Rapid Phased Prototyping Program as an opportunity to engage private sector technology companies in an intentional, innovative, and insightful way. This innovative model allows the FDIC and awardees to rapidly and collaboratively co-create solutions, moving from initial concept paper to final prototype in less than five months.

This rapid phased approach seeks to invite cutting-edge technology companies into the design phase early into the process to iteratively prototype, test, analyze, and refine solutions that foster innovation in the financial services sector and make supervision more efficient. While the adoption of these technologies among community banks will be voluntary, the intention is to create solutions that will prove to be mutually beneficial for both regulators and banks alike.

Each round of Rapid Phased Prototyping will focus on a different set of challenges that relate to FDIC’s mission to “maintain stability and public confidence in the nation's financial system.”

1https://aida.mitre.org/agile/agile-competitive-prototyping/

Prototyping Process


RPP Phase graphic

Phase I: Concept Papers

August 13, 2020: Phase I begins - FDIC formally invites 33 companies to submit concept papers

Vendors are invited to submit 10-page concept papers and those papers are evaluated by a panel of experts. Recommendations from this review determine which awardees will be selected to participate in the prototyping phases.


Phase II: Initial Prototypes

October 15, 2020: FDIC selects 15 vendors companies after review of initial concepts
November 2020: FDIC hosts two ‘sprint check-ins’ to gauge progress of companies
Mid-December 2020: FDIC hosts ‘demo days’ to allow vendors to present their initial prototypes

During this phase, awardees begin rapidly prototyping the concepts outlined in their paper using mock-ups and other low-fidelity techniques intended to generate discussion, validate assumptions, and iterate quickly. Sprint check-ins are scheduled throughout this phase to allow each awardee an opportunity to meet with FDIC stakeholders and gather important feedback.


Phase III: Final Prototypes

January 11, 2021: FDIC selects 11 companies to compete in third and final phase of RPP Competition
Mid-February 2021: FDIC hosts sprint check-in to gauge progress of companies
Mid-March 2021: FDIC hosts ‘demo days’ to allow vendors to present their final prototypes

This final phase of the process allows awardees to continue prototyping their concepts, which may include developing higher levels of functionality, engaging in user testing, and discussing other technical details.


Phase IV: Production Contract

Upon final prototype demonstration, the FDIC will make a determination about whether any of the prototypes demonstrate significant value to the FDIC and should be selected for production contract negotiation.

RPP Round 1: Early Warning of Financial Risks

How can access to more granular, targeted, and frequent data help the FDIC better assess the credit and liquidity risks of our member banks?


Background:
More than 150 years ago, Congress mandated that banks provide quarterly reports to supervisors on the financial health of the banking industry. At the end of each quarter, banks collect between 1,400 and 2,400 data fields, and transfer it to the Federal Deposit Insurance Corporation for aggregation and analysis. For our largest banks, the FDIC uses technology to fill the gap between call reports with robust, granular data feeds on liquidity, security exposures and asset quality. This depth of reporting is not necessary for community banks that individually represent little to no systemic risk.

Nevertheless, financial conditions across all community banks can be key indicators of strain in the economy, growing stress across the financial system and emerging risk at individual institutions.

This presents a key challenge for regulators: How to promote more regular reporting from community banks — where technology levels vary greatly — without increasing reporting burdens or costs.

Current RPP Participants


Status as of April 2021: All companies demonstrated their final prototypes in March 2021 and the FDIC is now determining whether any should be selected for production contract negotiation. Additionally, in March 2021, the FDIC issued a Financial Institution Letter providing information and clarification for FDIC-supervised financial institutions.

ACTUS Financial Research Foundation’s concept supports the FDIC by demonstrating how the ACTUS open standards provide a unique opportunity to efficiently collect, consolidate, and analyze timely financial contract data of bank assets and liabilities. The ACTUS open-source software algorithms use the ACTUS-defined contract data in combination with external risk factor models to generate forward-looking cash flows that allow anyone to quickly develop and deploy enterprise or systemic risk management solutions.

ACTUS Financial Research Foundation logo

BearingPoint’s concept supports the FDIC with its emphasis on RegOps, an innovative concept to improve supervision and reduce the regulatory reporting burden for banks. The concept will enable FDIC to improve their risk-based supervision based on FDIC required data and to solely rely on standardized, granular reporting data following a standard IDD (Input Data Dictionary). The RegOps platform facilitates the exchange between the banks and FDIC via API and the use of so-called functional units, which contain the regulatory processing & allocation logic.

BearingPoint logo

Data Society’s concept allows different types of FDIC end users to assess industry-driven risk scores associated with the FDIC-insured banks at macro and micro (local) levels. The application leverages state-of-the-art AI models built on top of conventional financial data, real-time loan level data, and other proprietary and public data sources including news, social media, and career postings to deliver a scoring system that brings off-site risk assessment close to real-time.

Data Society

Fed Reporter’s concept supports the FDIC’s goal of acquiring timely, impactful data from the banking industry. Additionally, the prototype system seeks to modernize current methods for data import, reducing the amount of manual intervention required. The goal is to enhance the scope and quality of the data provided to the FDIC, while reducing the time and resources required by banks using the new reporting system.

Fed Reporter logo

FIS’s concept supports the FDIC by building an advanced AI-enabled Virtual Auditing ecosystem that can reduce systemic banking risk in the U.S. Using real-time core data and computer vision to ‘read’ loan applications and extract key insights, it provides the FDIC and U.S. banks with increased visibility and early warnings of default risk.

Fidelity Information Services, LLC logo

Fiserv’s concept supports the FDIC by leveraging solution data and centralizing it in the cloud to deliver timely, secure, streamlined analysis. They will provide advanced financial reporting and introduce data technology to drive actionable advanced understanding of economic trends for banks and FDIC regulators. Using an open API approach and our deep data access, this new platform will employ artificial intelligence, machine learning and other enabling technologies to provide deeper insights, trends information, and a broader picture of portfolio health and risk via a Customer Financial Health Score.

First Data Government Solutions, LP (Fiserv) logo

Neocova’s concept supports the FDIC by envisioning a future where all banking platforms are real time and automated via AI. Their project shows a real time AI based data and analytics platform that serves both the FDIC and the banking sector. A single AI platform that moves, cleans and analyzes petabytes of information in an open environment. The platform also shows automated dashboards, alerts and predictive risk models at both at the institution and across all in the FDIC remit, saving hundreds of thousands of hours of work per year.

Neocova Corporation logo

Novantas’ concept supports the FDIC by leveraging its Comparative Deposit Analytics product to modernize regulatory deposit data submission and liquidity risk analytics. Fueled by AI, their solution aggregates anonymized, account-level data to produce advanced behavioral reporting on a frequent, standardized basis. These innovations will improve the effectiveness of FDIC supervision and Call Reports, as well as provide banks with actionable data for funding management.

Novantas, Inc. logo

Palantir Technologies’ concept supports the FDIC by offering Palantir Foundry (“Foundry”)—a commercial Platform-as-a-Service (PaaS) that can be configured as a shared data ecosystem by means of extensible data, logic, and application capabilities housed within a single secure platform. With Foundry, the FDIC can establish a banking industry ecosystem that can accommodate the data reporting and sharing needs of the FDIC and its constituent banks while adapting to the changing realities of the organization, industry, and economy.

Palantir Technologies Inc. logo

PeerIQ’s concept supports the FDIC by developing a powerful insight oriented solution to transform how the FDIC assesses banking risk. The platform ingests daily loan-level data and leverages machine-learning technology to extract, verify, and contextualize complex unstructured documents to provide a live detailed view of the bank’s data. A rich visual analytics dashboard proactively alerts of high-risk trends and provides auto-generated narratives highlighting key take-aways to facilitate the examination review process.

PeerIQ logo

S&P Global’s concept supports the FDIC by leveraging their community bank-focused business intelligence software combined with AI, automation, and a “Privacy by Design” approach to privacy & data security for an early warning system that benefits the FDIC and US banks. Integrating seamlessly with cores & general ledgers, the prototype will demonstrate how a bank’s data is standardized into key credit & liquidity metrics. Coupled with S&P’s leading credit tools and analytics, the prototype will provide both banks and the FDIC with timely, essential intelligence on emerging risks in the US banking system.

S&P Global Market Intelligence, LLC logo

Past RPP Participants


The FDIC would like to thank the following companies for their past participation in the RPP competition.

Accenture and Symphony AyasdiAI’s concept supports the FDIC by delivering an analytics capability to predict changes in systemic and individual bank health without adding additional burden on the banks. Their approach uses automatic pattern detection, machine learning, new sources of data, and advanced analytical methods to enrich FDIC’s current data and capabilities

Accenture logo

Amberoon’s concept supports the FDIC with the principle of Agile Compliance, which mandates software systems dynamic enough to match evolving governance priorities. Amberoon is implementing Hari Regulatory System of Insight (RSOI), a purpose-built ecosystem that builds on input from Systems of Record, Systems of Automation and Systems of Engagement to enable forensic analysis, predictive modeling and risk-based processes.

Amberoon logo

Donnelley Financial, LLC’s (DFIN) concept assists the FDIC in more efficiently ascertaining and analyzing key data points during bank examinations. DFIN is leveraging eBrevia’s AI-powered analytics and Venue’s secure content assessments, allowing for a seamless workflow between the FDIC and its member banks and greater success during exams.  The DFIN prototype offers an end to end solution so that member banks can securely and regularly upload their files to Venue for review by the banks and the FDIC. From there, data can be quickly analyzed and processed by the FDIC using artificial intelligence and other workflow and document management tools in eBrevia.

Donnelley Financial, LLC (DFIN) logo

TrueTandem’s concept supports the FDIC by combining the latest Microsoft cloud services with proprietary, cutting-edge credit risk and liquidity analysis driven by machine learning and artificial intelligence (AI).  The open architecture allows for aggregation of diverse data sets from multiple banks and data providers.  With forward-looking scenario analysis from Advanced Risk Consulting, they stress test the banking system to identify outlier individual banks, peer groups or loan types.  This analysis is done in real-time to provide the FDIC with early warning alerts on potential tipping points.

TrueTandem
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