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Conducting Due Diligence on Financial Technology Companies: A Guide for Community Banks

August 27, 2021

Summary:

The Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency (the federal banking agencies) are issuing the Conducting Due Diligence on Financial Technology Companies: A Guide for Community Banks (Guide), which is intended to help community banks in conducting due diligence when considering relationships with financial technology (fintech) companies.

A copy of the Guide can be found on the FDIC website.

Statement of Applicability: This Financial Institution Letter (FIL) applies to all FDIC-supervised financial institutions.

Highlights:

  • Community banks are entering into business arrangements with fintech companies to offer enhanced products and services to their customers, increase efficiency, and reduce internal costs.
  • FDIC is issuing this Guide as part of its efforts to promote and support the adoption of new technologies by financial institutions, particularly community banks.
  • The Guide covers six key due diligence topics that community banks can consider. The Guide highlights potential sources of information that may be useful when evaluating fintech companies.
  • Use of this Guide is voluntary, and the Guide does not anticipate all types of fintech relationships and risks.
  • The Guide is consistent with the FDIC’s Guidance for Managing Third-Party Risk, which includes a discussion on the role of due diligence.

Distribution:

FDIC-Supervised Institutions

Suggested Routing:

Chief Executive Officer 
Chief Risk Officer 
Compliance Officer 
Chief Information Officer 
Chief Technology Officer

Attachment(s)
Guidance for Managing Third-Party Risk

Last Updated: August 27, 2021