Top US bank revamps regulatory ecosystem to achieve 100% compliance with FDIC rule 370
Highlights
  • Customer

    One of the top 20 banks in USA

  • Industry

    Banking

Benefits
  • 100% compliant systems and processes
  • 15+ systems integrated to ensure seamless flow of information
  • 300+ in-process accounts reviewed for non-compliance issues
  • Successfully met the regulation deadline and avoided penalties
Business Situation

In Nov 2016, the Federal Deposit Insurance Corporation (FDIC) passed a regulation to amend 12 CFR Part 370 (recordkeeping for timely deposit insurance determination) for sizeable insured depository institutions (with two million or more deposit accounts reported for two consecutive quarters) in the consolidated reports of condition and income. This regulation mandated them to maintain comprehensive and accurate data about each depositor's ownership interest in deposit accounts by right and capacity.

The institutions covered by this rule, referred to as covered institutions, needed to develop and configure IT systems that could calculate the insured and uninsured amounts for each deposit owner by right and capacity for all deposit accounts. In case a covered institution fails, this capability will be used by the FDIC to facilitate timely payment of deposit insurance.

Business Challenges

The bank grappled with four primary challenges while implementing the regulation-

  • Effectively managing data exhaustiveness, governance, and control
  • Putting robust systems in place to handle data management for 2 million+ customers
  • Managing the complexity of the insurance calculations
  • Ensuring compliance execution in three years’ timeframe

Further, the bank needed to find solutions to complex use cases. e.g., managing account compliance where the deposit holder is an agent of the principals (who own the account), insurance of joint accounts where the covered institution didn't have a signature card with the principals, and several others.

Birlasoft Solution

Birlasoft's team of qualified regulatory experts and banking domain practitioners (proficient in deposits, wealth mgmt., lending, cards, and accounting) assessed the 'as-is' state of systems, sources, and accounts that held insured deposits. Based upon the 'as-is' state, we worked with the bank to document down the requirements needed to meet the FDIC Rule 370 mandate. We devised the solution architecture that became our north star on three aspects: systems integration, data management, and process re-engineering. We also drafted checkpoints and metrics to facilitate transparency and control for the bank. Our team of quality assurance experts ensured that the new system complied with FDIC Rule 370.