FinTech partnerships with credit unions rose to 48% as FDIC proposes reusable certification to cut duplicate due diligence. Community banks would benefit most.
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The Federal Deposit Insurance Corporation released a July 21 draft term sheet outlining a framework to reduce duplicate due diligence on technology providers. The proposal calls for a voluntary public-private Banking Innovation Standards Development Organization, or BISDO, paired with a certification program called Risk-Assessed, Manageable Partnerships, or RAMP.
The framework would standardize portions of third-party risk management so information can be assessed once, refreshed and used by multiple banks. The FDIC said the goal is to cut repeated and inconsistent information requests that both banks and third-party providers face.
The proposal comes as FinTechs shift their partnership strategies away from national and regional banks toward credit unions and digital-only banks. PYMNTS Intelligence found that 48% of FinTechs offering end-user products through third parties partnered with credit unions last year, up from 40.3% in November 2024. Partnerships with digital-only banks rose to 66.7% from 61%. Over the same period, national-bank partnerships fell to 16% from 36.4%, and regional-bank partnerships dropped to 14.7% from 41.6%.
Among FinTechs already working with credit unions, 38% cited slow buying decisions as an impediment and 34% cited complicated regulations, according to the survey by PYMNTS Intelligence and Velera. Only 16% said technology infrastructure was a barrier.
Community banks are singled out in the FDIC draft as particular beneficiaries. The term sheet says duplicated reviews can be especially burdensome for institutions with limited personnel, technical expertise, negotiating leverage and resources to evaluate complex or novel arrangements. It separately says community banks "may benefit in particular" from standardized certification.
Under the proposed structure, BISDO would establish or recognize common standards, while RAMP would certify providers or individual solutions against them. Independent assessors would conduct the underlying reviews. The term sheet describes a RAMP certification as potentially serving as a "green light to consider," particularly for community banks that might otherwise lack the resources to evaluate multiple providers.
The draft does not propose outsourcing the bank's vendor decision. Institution-specific analysis, contracting, integration, monitoring and oversight remain with individual banks. The reusable portion is the information and assessment that can be standardized across institutions.
That separation could affect competition among technology providers. An established vendor that already serves banks has existing relationships and documentation. A prospective provider has to clear those requirements before its product can be evaluated alongside the incumbent. The term sheet says the proposed framework would allow assessment costs to be spread across multiple client institutions, reducing one recurring cost attached to pursuing additional bank customers.
The BISDO concept is not limited to community banks or credit unions. The draft says its mature scope could encompass "any category" of third-party provider or outsourced banking activity for which reusable standards and independent assurance provide value.
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