New FDIC Software to Cut On-Site Exam Time

The Federal Deposit Insurance Corp. is taking a high-tech step to reduce the time examiners spend in banks.

At the Conference of State Bank Supervisors annual meeting here last week, the agency unveiled software to automate data collection for its safety-and-soundness exams. Called Alert, the program organizes loan data and should help reduce the regulatory burden, FDIC officials said.

Examiners are expected to begin using Alert by July. The product continues a trend at all bank agencies toward automating safety-and- soundness, Community Reinvestment Act, and compliance exams.

"This package will allow us to do a significant amount of analysis off- site," FDIC Chairman Ricki Helfer told the meeting. "Through this leveraging of technology, we are aiming to reduce on-site examiner presence by 25%."

The product lets bankers load loan data - borrowers' names, amounts borrowed, and interest rates - onto a disk in a format that the examiners can read on their own computers. When notified of an impending exam, the financial institution can ship the disk to the examiner's field office for analysis. Currently, examiners frequently must spend hours in the bank reading documents to get the data needed.

An FDIC official said the agency is designing a data system for compliance exams. The official, who asked not to be named, said he does not know when the project would be completed.

James A. Hansen, director of the Nebraska Department of Banking and Finance, said the state bank supervisors group had helped the FDIC test its product. Agency officials said it has been used in about 60 exams and had reduced on-site time by as much as 25%.