For a bank , managing a third-party fintech program starts with a high-level assessment of the third-party risk at the onboarding stage. This is a critical step that helps determine whether the vendor’s risk profile fits the banks' risk appetite. While essential, this process can be overwhelming because of the sheer complexity and manual-heavy nature.
As per FDIC guidelines, banks must perform assessments on Third-parties - like fintechs in several key risk areas. Such assessments must gather information across several key areas. Some of these risk areas are:
- Business Risk – Evaluating the Third-party’s business model, revenue streams, and sustainability.
- Financial Risk – Assessing financial stability, funding sources, and financial statements.
- Regulatory Compliance Risk – Ensuring adherence to federal and state regulations, including OCC and FFIEC guidelines.
- Risk Management & Controls – Reviewing policies, procedures, and internal controls.
- Information Security Risk – Analyzing cybersecurity measures, data protection policies, and SOC 2 compliance.
- Strategic Risk – Understanding long-term viability, growth plans, and alignment with bank goals.
- Third-Party Vendor Risk Management – Identifying dependencies on vendors and service providers.
- Operational Risk – Examining fraud controls, dispute resolution, and system resilience.
- BSA/AML/OFAC Compliance – Validating anti-money laundering (AML) programs and OFAC screening practices.
- Reputation Risk – Identifying potential risks to your bank’s brand and public perception.
- Insurance Risk – Reviewing coverage policies for fraud, cyber incidents, and financial loss.
- Legal Risk – Assessing contracts, regulatory exposure, and potential litigation risks.
- Cross-Channel Risk – Evaluating risks in multi-channel transactions and customer interactions.
The Challenges Banks Face
While these risk areas are critical for ensuring a successful fintech partnership, the process of gathering, reviewing, and analyzing all the necessary information presents several challenges:
- Creating the End-to-End Assessment Process: Developing a comprehensive and standardized process to evaluate fintechs across multiple risk areas is time-consuming and complex.
- Resource Constraints: The manual work required to collect documents, review them, and follow up with fintech partners often results in a significant drain on resources, leaving compliance teams overwhelmed.
- Comprehensive Risk Evaluation: Conducting a thorough assessment of a fintech’s risk profile across all the required areas—business, financial, operational, and more—requires deep expertise and attention to detail.
- Report Preparation: After the evaluation, a detailed report with recommendations must be prepared for the risk committee, which adds another layer of work to an already taxing process.
Across Helps Streamline Third-party Onboarding
At Across, we understand these pain points and provide a complete solution to alleviate the burden on small banks.
Our platform streamlines the risk assessment and due diligence process, automating key tasks and ensuring that each fintech is thoroughly evaluated across all relevant risk areas. The result? Banks can onboard more fintechs, faster, without needing to expand their existing compliance teams.
By saving time, reducing manual effort, and improving accuracy, Across not only cuts down on operational costs but also ensures that small banks can move quickly and confidently into fintech partnerships.
Fintech Risk Assessment doesn’t have to be a manual overload for small banks and credit unions. With Across, banks can simplify the due diligence process, enhance their compliance efforts, and focus on growing their fintech programs without the constant strain on resources.
Ready to Simplify Your Fintech Risk Assessment?
If you’re ready to streamline your third-party fintech risk assessments and enhance your compliance efforts, Across is here to help. With our automated solutions, you can reduce the complexity, manual work, and time-consuming tasks involved in assessing fintech partners.
Contact us today for a demo or consultation to see how Across can accelerate your fintech partnerships, improve your compliance processes, and help you manage risk with ease.
