The Federal Deposit Insurance Corp. is moving to boost the way it monitors for risks at thousands of U.S. banks, potentially scrapping quarterly reports that have been a fixture of oversight for more than 150 years yet often contain stale data, the Wall Street Journal reported. The FDIC today is expected to kick off a competition among 20 data and technology firms to develop a new reporting prototype that could provide the agency with more timely and targeted data about banks’ credit exposures and deposit information. The move is focused primarily around modernizing the data the FDIC collects from more than 3,200 community banks the agency oversees. Eventually, the new system might displace the voluminous “call” reports the firms are required to file 30 days after each quarter, which run 60 pages and contain more than 2,200 data fields. “What we would like to do is frankly make the call reports obsolete, and not because we wouldn’t have the data but because we would have better data and we would have more timely data,” FDIC Chairman Jelena McWilliams said in an interview. The competition is part of a broader push to modernize the way government watchdogs surveil risks in the market. Proponents say it could also boost consumer protection, help combat financial crime and ensure the banking system serves an inclusive set of customers. The effort to modernize the FDIC’s systems predates the coronavirus pandemic, yet the outbreak has demonstrated bank reporting can be out of date. For instance, the agency wasn’t able to brief the public on the first-quarter health of the industry until earlier this month. And that briefing didn’t include data past March, relatively early in the pandemic-triggered downturn. Though the agency collects some daily data from the largest U.S. banks, officials say keeping tabs on smaller institutions is especially cumbersome and outmoded, comparing the quarterly call reports to seeing a doctor but having to wait four months for lab work.
