Now Playing: US Treasury Secretary’s resignation puts the brakes on US economy, jobs growth… article The United States government shutdown has put the brakes, for now, on the recovery in the U.S. economy, but it has also created new challenges for businesses that rely on cleanrooms to test their products and processes, like banks.
Some companies have begun phasing out their own cleanroom tests, or have shifted to outsourcing cleanroom testing to third-party labs.
But a growing number of cleanroom providers are opting to use the new, cheaper, third-parties to test and certify their products, including Priceline, Expedia, Microsoft, and others.
These third-person testing firms have to do a lot of paperwork to get their products certified, but they do not need to spend money on expensive testing equipment, so the costs are not as high, said Jonathan Easley, an analyst with the accounting firm EY.
He said the new testing services make up a small fraction of all the test services the U,S.
government offers to banks and other financial institutions.
“The testing is cheaper and the costs can be managed,” Easley said.
“It’s cheaper to just use a third party.”
A few other banks are moving to use these third-parts testing companies, said Michael E. Boulware, chief financial officer at Priceline.
Some of the companies that have signed up include Expedia and Priceline Travel.
“We’ve been very supportive of these third parties,” BoulWare said.
In the last year, the number of banks using third-product testing has skyrocketed.
At the end of June, nearly all of the major banks, including Chase, JPMorgan Chase, Bank of America, and Citigroup, had started offering some form of third-third-party testing, according to data from the UBS Group, a financial advisory firm.
By early October, nearly half of the nation’s largest banks had started doing so.
In February, Bank Of America was the first major U.K. bank to offer third-parity testing to its customers.
That same month, Microsoft was the third major U,s.
bank, after JP Morgan Chase and Wells Fargo, to start offering third-pronged testing to customers.
In other words, the vast majority of the banks that are using third parties are still using the old, old third-tier testing that was the basis for the shutdown.
The big banks have not been shy about how the shutdown has affected their bottom lines.
On Monday, BankOfAmerica said it had lost $300 million in the third quarter because of the shutdown, and CEO Mark Mahaney said the company had reduced its spending on research and development by nearly half.
“I think the way we see it is, it’s a real cost, and we can’t be sure it’s going to be recouped,” Mahaney told CNBC.
He also said that he was not expecting the government to shut down, and that he expected a “slight recovery” from the shutdown and continued improvement in the economy.
But, he added, the company has cut costs and is going to do more to cut costs.
While the government shutdown is unlikely to have a major impact on the company’s bottom line, it is a reminder that companies need to prepare for a shutdown, Bouleware said.
For example, he said, if you are in the middle of a disaster and need a backup in case the country goes down, you need to be prepared for that possibility.
For more:Read more at USA Today