The Federal Deposit Insurance Corporation (FDIC) is advancing plans to create an independent organization dedicated to developing and applying uniform benchmarks for third-party vendors that supply services to banks.
Working alongside banking and financial technology industry groups, the agency aims to establish a body that would define baseline criteria aligned with federal regulatory expectations and then verify whether service providers satisfy those criteria.
According to details outlined in a draft term sheet circulated in late July, the new entity would focus on common elements of third-party risk management.
Banks, especially smaller community institutions, currently devote significant resources to individually assessing the same fintech partners and other vendors.
A shared certification process would allow key information to be reviewed once, updated periodically, and then relied upon by multiple institutions.
This approach seeks to reduce repetitive due diligence while still leaving each bank fully accountable for its own risk evaluations, contracting choices, system integrations, and continuous oversight.
Certification would not function as a regulatory safe harbor.
Participation in the standards regime would remain entirely voluntary, and neither banks nor technology firms would face penalties for opting out.
Even when a provider holds the organization’s seal of approval, banks would continue to bear full responsibility for ensuring safe and sound operations, legal compliance, consumer protections, and effective monitoring of outsourced activities.
Independent third-party assessors, rather than the standards body itself, would perform the actual compliance reviews that support any certification decision.
The Federal Deposit Insurance Corporation (FDIC) is expected to contribute initial seed funding to help launch the organization.
Industry participants already engaged in the discussions include the American Bankers Association, the Independent Community Bankers of America, the Bank Policy Institute, the Financial Technology Association, the American Fintech Council, and the Coalition for Financial Ecosystem Standards.
Trade groups have begun surveying their members to gauge interest and participation levels.
The Office of the Comptroller of the Currency (OCC) is anticipated to join the collaborative effort in the near term.Discussions about such a framework originated years earlier, during the first Trump administration, and continued without full realization under the subsequent administration.
Renewed momentum has been influenced in part by the 2024 failure of Synapse Financial Technologies, a banking-as-a-service intermediary whose collapse trapped substantial customer funds and highlighted operational vulnerabilities in bank-fintech partnerships.
The current initiative is still in its formative phase, with initial meetings among the agency and industry partners having only recently begun.
Officials and participants expect the process to accelerate, particularly as federal banking regulators prepare to issue updated guidance on third-party risk management in the coming weeks.
Observers note that independent standard-setting bodies already operate successfully in other sectors, including cybersecurity certification and accounting.
Proponents argue that clearer, reusable benchmarks could streamline oversight for both banks and examiners, expand safe technology partnerships, and ultimately benefit consumers through greater choice and more reliable products.
Critics of heavy reliance on third parties have long called for more structured approaches to vendor management, and this proposal represents one concrete response to those concerns while also at the same time carefully preserving institutional accountability.