From FDIC, Outsourcing-Risk Management

By Thompson, Laura K. | American Banker, June 4, 2001 | Go to article overview

From FDIC, Outsourcing-Risk Management


Thompson, Laura K., American Banker


The Federal Deposit Insurance Corp. knows that many community banks would like to go the outsourcing route for at least some of their technology needs.

The FDIC has also learned that community bankers do not want anything that looks like a new set of rules about how to handle the process.

As a result, the agency will release to banks today a set of pointers not regulations providing information on selecting a service provider, setting up risk-mitigation contracts, and working with more than one provider.

"This is not intended to be used as an examination procedure. You can take them or leave them, although we certainly hope you take them," said Cynthia Bonnette, the assistant director of the FDIC's bank technology group.

The FDIC developed the pamphlets because it believes community banks need more hand-holding than large banks in managing the risks involved with technology outsourcing. It and other regulators issued general guidance on the subject last fall, but that three-page "white paper" was aimed at thrifts, banks, and credit unions of all sizes.

Ms. Bonnette said the agency felt more detailed instruction was needed since community banks do not have the same negotiating power as large banks and few small banks have technology experts on staff.

Bank and thrift trade groups worked with the FDIC in developing the pamphlets, which range from 10 to 15 pages each. Viveca Y. Ware, the director of payment systems for the Independent Community Bankers Association, said the guidance will be "extremely helpful," especially at institutions that do not have divisions dedicated to managing outsourcing.

"This is really going to help community banks home in on areas that are important to their outsourcing relationship," she said.

Technology vendors have also reviewed the pamphlets, and Ms. Bonnette said they found the recommendations useful because they now have a better understanding of what banks -- and regulators -- want. Regulators have no formal examination process for vendors, but they will conduct reviews on a case-by-case basis.

Ms. Bonnette said bankers "have to be more diligent in educating vendors and specify what they need and what they expect, because vendors won't necessarily know. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

From FDIC, Outsourcing-Risk Management
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.