The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) today approved its operating budget for 2019.  The budget reflects a decrease in both expenditures (down 2.3%) and headcount (down approximately 3%).  The FDIC’s budget memorandum explains that these changes reflect, among other things, consolidation in the industry and a decrease in the frequency of examinations for small banks, which have both contributed to a reduction in the FDIC’s workload.

Against this background, the FDIC’s decision to add staff in specific areas is of particular interest, and helps shed light on the agency’s priorities over the coming year.  Among other things, the FDIC is:

  • adding 23 IT examiner and specialist positions to augment its IT examination workforce; and
  • adding a further 23 positions in its large bank supervision team, responsible for supervising banks with over $10 billion in assets.

The FDIC’s budget memorandum explains that the proposed addition of 23 IT examiners reflects the “growing complexity, interconnectedness, and operational and cybersecurity risk posed to the financial system by technology service providers.”  And, in an accompanying statement, FDIC Chair Jelena McWilliams indicated that the additional large bank supervision positions are intended to keep up with the growth in the number of large banks supervised by the FDIC.

In addition to focusing resources on examining the IT infrastructure of supervised banks, the FDIC also intends to invest in a number of internal initiatives to improve its own IT capabilities and invest in cybersecurity.