WASHINGTON — The Federal Deposit Insurance Corp. is working with banking and fintech trade groups to create an independent organization that would establish voluntary standards for third-party service providers, a move intended to streamline how banks evaluate technology vendors while strengthening risk management, according to Bloomberg Law.
Bloomberg Law reported that a July 21 draft term sheet outlines plans for a new standard-setting organization that would develop baseline risk management standards and certify whether fintechs and other bank service providers meet those benchmarks. Independent assessors would conduct compliance reviews.
According to the draft, the standards would help reduce duplicative vendor reviews—particularly for community banks—by allowing multiple institutions to rely on standardized third-party risk management information while maintaining responsibility for their own due diligence and oversight.
The proposal makes clear that participation would be voluntary. Banks would not receive regulatory safe harbor for using certified providers and would remain responsible for ensuring compliance, consumer protection and ongoing oversight of third-party relationships.
Bloomberg Law reported the FDIC is expected to provide initial funding for the organization, although the agency declined to comment.
The Groups Involved
The effort includes collaboration with several industry organizations, including:
- American Bankers Association.
- Independent Community Bankers of America.
- Bank Policy Institute.
- Financial Technology Association.
- American Fintech Council.
- Coalition for Financial Ecosystem Standards.
Phil Goldfeder, CEO of the American Fintech Council, told Bloomberg Law the group is working with regulators and industry associations to ensure the organization supports safety and soundness goals.
Follows Earlier Collapse
The initiative follows the 2024 collapse of banking-as-a-service provider Synapse Financial Technologies, which left millions of dollars in customer funds inaccessible and renewed calls for more consistent oversight of bank-fintech partnerships. Bloomberg Law reported that discussions about creating a standards body actually began during the first Trump administration but gained new momentum following the Synapse failure.
According to Bloomberg Law, the FDIC and its industry partners are in the early stages of organizing the effort and are expected to move quickly as federal banking regulators prepare updated guidance on third-party risk management. The Office of the Comptroller of the Currency is also expected to join the initiative, according to people familiar with the discussions cited by Bloomberg Law.
