The FDIC is keeping a close eye on nonbank financial companies, including technology startups, and how they’re affecting banks, American Banker reported.
FDIC Chairman Martin Gruenberg told an audience at a Risk Management Association conference in Washington, D.C., on Monday (Oct. 27) that “the impact of the nonbanking sector on the insured sector — the relations between the two and the interlocking risks associated with that are probably one of the key areas of focus going forward.”
Audience members asked about the “encroachment” of technology companies upon the banking space. The FDIC chief didn’t answer directly, but cited other concerns about “the so-called shadow banking sector” as an area for concern for the FDIC and other regulatory agencies. The Federal Reserve’s Federal Advisory Council, a group of bankers appointed by Fed members to advise the board, has been recommending a focus on “shadow banking” since at least 2012.
Gruenberg also reiterated the need for banks’ senior management to make cybersecurity a high priority. “I think this is going to be one of the key issues for the industry going forward for both large and small institutions and for the federal regulators as well and I think this is an ongoing process,” Gruenberg said. “I think we are getting up the learning curve, for the industry and the regulators on this and it is going to be a key priority both for the institutions and the regulators.”