On April 2nd, the Federal Deposit Insurance Corporation sent a letter to its covered financial institutions regarding the use of technology in compliance programs. Interestingly, some recent trends in utilizing tech platforms to manage risk were addressed, including:

  • There is little transfer of risk to third-party vendors; you are responsible for your own controls, testing, and governance (responsibility and liability)
  • It is important to document how your technology tools perform their functions (i.e. algorithms, data matching criteria, API specifications)
  • Developing plans to continue operations during outages and downtime
  • Enabling regulators to understand where technology supplements and enhances compliance functions, and how it nests with the strategic vision of the CCO