Banks Urge OCC to Increase Scrutiny of Core Service Providers

Federal banking regulators need to conduct more oversight of companies such as Fiserv Inc. that provide payment, compliance, and other software tools to ensure they aren’t stifling innovation, banks and financial technology companies said.

Core service providers can serve as a “bottleneck” by making it difficult to change providers or add third-party services, banking and fintech customers said in comment letters to the Office of Comptroller of the Currency due Tuesday.

The OCC in November requested input on how core service providers affect innovation, especially among community banks.

Regulators should increase their supervision of core service providers under the Bank ...