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The Federal Deposit Insurance Corporation plays a central role in preserving confidence in the banking system while adapting to a fast-moving technology landscape. I am Ryan Billingsley, who leads the Division of Risk Management Supervision at the FDIC, and this account explains the agency’s efforts to let banks innovate without compromising core safety standards. The FDIC’s core responsibilities—insuring deposits, promoting the safety and soundness of institutions, and resolving failed banks—remain unchanged, but our methods are evolving. We view innovation as an operational imperative and treat tools like artificial intelligence and distributed ledger technology as capabilities that must be integrated under thoughtful controls. In this context, innovation means adopting new tools while ensuring they meet regulatory and risk-management thresholds.
Shifting the supervisory framework
The FDIC has been revising how it approaches supervision to be more adaptable to technological change and to reduce unnecessary friction for banks experimenting with new services. Under Chairman Hill’s leadership, we have emphasized a technology-neutral stance that avoids prejudging specific tools while insisting on prudent risk management. A key focus has been reexamining the application of the Model Risk Management guidance, originally released as FIL-22-2017 (June 7, 2017), so it is proportionate to the size and complexity of a bank’s model use. The goal is a tailored, risk-based framework that scales expectations for model governance rather than applying a one-size-fits-all standard that can overburden smaller institutions. This recalibration should help banks deploy analytics and machine learning responsibly while reducing unnecessary supervisory documentation burdens.
Revisiting model rules and third-party limits
Part of the supervisory reorientation includes reassessing guidance that affects how banks work with vendors and external developers. The FDIC, together with the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency, is reviewing the Interagency Guidance on Third-Party Relationships issued as FIL-29-2026 (Jun. 6, 2026). For many community banks, partnerships are the fastest path to modern capabilities, so we are exploring ways to remove regulatory obstacles while maintaining strong oversight of third-party risk. Updating examination manuals will help examiners concentrate on genuinely material financial and operational risks rather than noncritical process items.
Digital assets, stablecoins, and tokenization
The FDIC has adopted a more permissive and clearer posture toward banking activities involving crypto-related services, while still expecting institutions to act in a safe and sound manner. In an effort to remove unnecessary barriers, the agency clarified the notification process for FDIC-supervised institutions on March 28, 2026, and subsequently withdrew several interagency statements that had generated uncertainty on April 24, 2026. The agencies issued supervisory expectations for custody activities on July 14, 2026, and on March 5, 2026 clarified that the capital framework is technology-neutral for certain tokenized securities. Legislative change has also shaped the landscape: the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) was enacted in July 2026, assigning the FDIC a primary supervisory role for certain payment stablecoin issuers, and the FDIC published a proposed rule in the Federal Register on December 19, 2026 (90 Fed. Reg. 59409) to establish an application framework for issuance by FDIC-supervised institutions.
Bank use cases and evolving services
Banks are already experimenting with a range of functions that leverage distributed ledgers and related technology: providing on/off ramps for crypto firms, enabling card settlement with stablecoins, offering custodial services, issuing stablecoins, and exploring tokenized deposits for treasury efficiency. Emerging use cases include combining AI-driven credit assessment with alternative cash-flow data to extend credit to underserved borrowers, and applying generative AI tools to automate customer interactions, summarize loan files, and assist with code generation. As these activities proliferate, supervised entities must maintain robust risk management practices and meet applicable legal and capital requirements.
Modernizing FDIC operations and workforce
The FDIC is also modernizing its internal technology and the skills of its workforce to keep pace with the changing banking environment. Our multi-year Information Technology Modernization program follows Federal priorities such as the Federal Cloud Smart Strategy, the Federal Data Strategy, and evolving cybersecurity directives, including adoption of Zero Trust principles. Central to this effort is the development of Supervision 360, a cloud-based platform that consolidates legacy supervisory systems and streamlines examination workflows with modern business process management software. Parallel to system upgrades, we are piloting GenAI tools for staff productivity and planning broader deployment by midyear, carefully balancing innovation with governance and security.
Building AI-capable examiners
To support modernization, we are investing in an FDIC AI Program that provides foundational literacy and governance training across the agency. Training covers AI fundamentals, GenAI concepts, and practical skills such as prompt engineering, while emphasizing human oversight, data protection, and ethical considerations. The program is designed to enable examiners and staff to assess AI tools critically, validate outputs, and enforce controls that protect sensitive information. This workforce effort complements technology upgrades and reflects the FDIC’s commitment to using advanced tools responsibly to strengthen both supervision and bank resilience.
Closing perspective
As banks adopt new technologies at scale, the FDIC’s objective is to permit responsible experimentation while holding institutions to established safety and soundness standards. Our approach combines updated supervisory guidance, clarified stances on digital assets and stablecoins, modernization of internal systems such as Supervision 360, and investment in staff capabilities. These elements are intended to create a regulatory environment that supports innovation, protects depositors, and preserves financial stability. I appreciate the dedication of FDIC staff who advance these goals and I welcome further dialogue on how best to balance technological progress with prudent oversight.