Press Release

FDIC Launches Competition to Modernize Bank Financial

Reporting

J u n e 3 0 , 2 0 2 0

FOR IMMEDIATE RELEASE

The Federal Deposit Insurance Corporation (FDIC) today announced the start of a rapid

prototyping competition to help develop a new and innovative approach to financial reporting,

particularly for community banks.

Twenty technology firms from across the country have been invited to participate in the

competition. The competitors will develop proposed solutions over the next several months that

will be presented to the FDIC for consideration, similar to an extended version of a "tech sprint"

or "hackathon." Competing firms represent leaders in the financial services, data management,

data analytics, and AI/ML fields.

These modern tools – and lessons learned in future competitions – will help make financial

reporting seamless and less burdensome for banks, provide more timely and granular data to

the FDIC on industry health, and promote more efficient supervision of individual banks.

FDIC: PR-79-2020
FDIC Chief on Why Call Reports are Getting a Makeover

By Jelena McWilliams 

July 1, 2020

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 Corp. for aggregation and analysis.

When I began serving as FDIC chairman two years ago, we charted an ambitious course for 

the development of new technological solutions both at the agency and across the banks we 

supervise. This agenda includes making these “call reports” obsolete.

Why, one may ask, would a bank regulator want to get rid of quarterly data collection? 

Because there has to be a better way.

Here is the issue: On June 16, we reported on the health of over 5,000 FDIC-insured financial 

institutions at the end of the first quarter. The quarter was challenging for banks, but the 

economic impact of the coronavirus pandemic would continue into the second quarter. 

Second quarter results for the vast majority of banks will not come in until the end of July —

120 days after the quarter began. If you were a doctor trying to assess a patient’s health, it 

would be preposterous to get the lab results four months later. The information gap is 

particularly acute at community banks.

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.
To help answer this question, the FDIC recently invited some of the most advanced 

technology companies and several core processors that support the financial services 

industry to participate in a rapid prototyping competition. Similar to an extended tech sprint 

or “hackathon,” this event will challenge the competitors to develop a new approach to 

financial reporting.

The supervisory technology that the competing teams will develop will be the initial step in a 

long journey to eliminate call reports.

Targeted data sets from community banks, more frequently available and more granular than 

current reporting, could reduce the need for cumbersome quarterly reporting. This 

modernized and automated data system would improve the ability of supervisors to identify 

bank-specific and systemwide risks sooner and more efficiently, while reducing the 

compliance burdens on individual institutions.

More timely and targeted data would also promote early supervisory engagement with banks 

when risks are identified. And these advance warnings would allow banks to take remedial 

action before issues become irreparable.

The lessons learned from this competition, and future FDIC tech sprints, will promote the safe 

and sound adoption of these technologies, helping banks and supporting consumers in the 

process. This reporting system will not come with mandates for community banks to adopt 

it.

Until this new framework becomes operational, call reports will continue to be an important 

supervisory tool. As the FDIC works to facilitate and expedite the digital transformation at 

community banks, we will maintain the public transparency and security that call report 

information provides.

This transformation will not happen overnight — it may not even happen during my FDIC 

tenure. But it is critical for our banking system to begin the process now. The future is past 

due, and the FDIC is lighting the fuse on innovation today.

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