In an effort to streamline the examination of fintech and other non-bank platforms with a broad-picture perspective, the Conference of State Bank Supervisors (CSBS) has announced the nation-wide rollout of the State Examination System (SES).
The first nationwide platform to connect state regulators and companies in one system, SES holds the expectation to foster “greater transparency and collaboration” between nonbanks and supervisors, according to the press release.
As far as goals for SES, the main objectives are to support networked supervision, standardize workflows across states, facilitate secure collaboration between licensees and regulators, and assist examiners with focusing more on higher-risk cases through multi-state exams versus single-state efforts.
“For state regulators, this is a really big deal,” noted State Regulatory Registry Board chairman and Louisiana Office of Financial Institutions Commissioner John Ducrest in a related speech he gave at the 2020 NMLS Annual Conference. “Nationwide deployment of SES is the single biggest technology initiative that CSBS has implemented since we rolled out Nationwide Multi-State Licensing and Registry (NMLS) more than a decade ago. Indeed, I fully expect SES to do for examinations what NMLS has done for licensing.”
This most recent initiative is part of the ongoing effort by CSBS to make the process of complying with differing state-by-state requirements easier for nonbank entities. The ability to develop uniform practices across the states will provide significant benefit to the payment facilitator model.
Ducrest goes on to explain that SES utilizes technology to promote supervision efforts across multiple states to encourage synchrony and further protect consumers.