• Younger Consumers Jolt the Banking Status Quo
• From Big Data to Big Impact, Banking Needs to Get Personal
• Balancing Protection and Personalization in Banking
• Next Steps: Leveraging Data for Local Banking Success

Younger Consumers Jolt the Banking Status Quo

Young retail banking customers are keeping an eye on the exits at their current FIs. These digital natives want more than just slick apps at a time when banks risk forgetting that quality service still reigns supreme.

Digital capabilities alone, however, are proving insufficient to retain digital natives as the latter increasingly demand personalized, goal-oriented support. A new study finds that nearly half of Gen Z consumers are willing to switch to a banking competitor for tailored financial guidance and spend management tools. This puts a new twist on the demand for technology, with personalization becoming the goalpost of sophisticated, feature-rich banking.

Service quality no longer matters — or does it?

Although digital transformation is dominating the banking industry’s focus, memorable customer service remains a critical factor in retaining account holders. A striking 21% of retail banking consumers who have closed accounts cite poor customer service as the primary reason. This contrasts with less than 5% who did so because of dissatisfaction with the mobile experience.

The importance of service quality is top of mind for many consumers who are considering a switch: 26% who are likely to change FIs blame unsatisfactory service. This finding serves as a stark reminder that while digital innovation is crucial, even the most elaborate digital interface cannot compensate for subpar service. As banks and FIs prioritize digital transformation, they must ensure that their focus on technology does not come at the expense of quality service.

From Big Data to Big Impact, Banking Needs to Get Personal

Retail banking customers are done with one-size-fits-all. These days, they demand financial advice nearly as unique as their fingerprints. Can FIs deliver a win-win? The prize is no less than customer loyalty.

Banking customers yearn for wisdom and convenience, packaged just for them.

FIs are sporting the latest technology to unlock the potential of personalization.

FIs globally are adapting their technology infrastructure to meet the demand for personalized, digital-first banking ecosystems. An overwhelming 97% of financial services providers across every major global region have migrated at least one application to a different technology stack in the past year. Driving this trend is the need to improve data access speeds (42%), strengthen security (41%) and integrate cloud-native services such as artificial intelligence (AI) and machine learning (ML) (39%) — all critical ingredients of digital banking personalization. For community banks and CUs, which often excel in customer service, this presents both a challenge and an opportunity. By adopting modern, agile technology architectures, these smaller institutions can combine their service strengths with advanced personalization capabilities. This combination could allow them to leapfrog larger competitors in delivering integrated, personalized banking experiences.

Balancing Protection and Personalization in Banking

Data is banking’s new gold mine, but just one data breach could be catastrophic. Savvy FIs are not hiding behind walls. They are making security a competitive edge to win hearts and accounts.

A single security misstep can bankrupt customer trust.

Security is a top priority for 91% of retail banking consumers when choosing an FI. From Gen Z to baby boomers, the message is clear: Protect my data. Indeed, inadequate security measures could cost banks more than financial losses, with 75% of banking customers ready to switch to a competitor if their sensitive personal data is compromised. The takeaway? Personalize, but make ironclad security a cornerstone of that personalized experience.

Banks can turn security fears into customer empowerment.

More than 9 in 10 U.S. retail banking customers rank the protection of sensitive personal data as a bank’s most critical capability. However, with nearly half having experienced a banking security concern firsthand, there has been an erosion of trust: 67% of consumers now doubt their bank’s ability to counter sophisticated threats such as deepfake fraud. This gap between expectation and reality presents yet another opportunity for community banks and CUs. By incorporating personalized services with robust, transparent security measures, these smaller FIs can rewrite the security narrative, turning it from a worry into a value-added service.

Next Steps: Leveraging Data for Local Banking Success

Gen Z and millennial consumers’ preference for digital-first banking plus tailored financial guidance is a trend that continues to gain momentum. The race to capture these valuable customers will determine the leaders of tomorrow’s financial industry. By leveraging data-driven insights to deepen community connections, smaller FIs can differentiate themselves in an increasingly homogeneous market. Community banks and credit unions are in a position of strength — if they seize the moment.

PYMNTS Intelligence offers the following actionable roadmap for community FIs looking to gain — and keep — primary banking status with their customers:

• Implement a data-driven personalization ecosystem. Deploy advanced analytics to aggregate and parse customer data, leveraging AI-powered insights to offer tailored experiences across all touch points. Implement modular financial planning tools that allow consumers to customize strategies aligned with their life stages and financial objectives, and utilize predictive modeling to generate hyper-targeted product offerings and proactive financial guidance.
• Architect an omnichannel customer service model. Integrate AI-driven automation with high-touch human expertise. Pilot conversational generative AI chatbots for routine inquiries and preliminary financial guidance, but ensure that frictionless escalation to human advisers is easily accessible. Equip staff with real-time, data-enriched customer profiles to facilitate personalized consultations and product recommendations tailored to individual financial journeys.
• Enhance cybersecurity posture with multifactor authentication (MFA) and contextual risk analysis. Implement ML-driven predictive analytics to identify potential fraud and dynamically adjust authentication protocols. Integrate behavioral biometrics, such as keystroke dynamics or mouse-movement analysis, for continuous authentication, and provide a user-friendly security dashboard to empower customers with insights into their account activity and security measures.
• Partner with FinTechs. Prioritize partnerships that enhance personalization and improve back-end efficiency. Collaborating can dramatically accelerate implementation timelines and provide access to ongoing specialized support, enabling smaller institutions to rapidly deploy advanced technologies while maintaining their community-focused approach.

An institution’s community roots are its superpower. FIs that build this connection into every data-driven interaction will offer a banking experience that is not simply convenient but also memorable — a winning differentiator in today’s financial landscape.

The post Local Roots: How Community FIs Can Win the Digital-First Generation appeared first on PYMNTS.com.

As CEO Dee Choubey told Karen Webster, the middle-income, paycheck-to-paycheck consumer is fueling the company’s growth.

“Our clients on the consumer side are mostly middle income,” Choubey said. “They’re the firemen, the teachers, the cops, the gig economy workers. We are not as yet seeing a lot of job displacement in that segment. This is probably going to be the first white collar recession, and that’s going to potentially impact existing credit card books. But our risk selection technology is good and the demand from the essential workforce for our products is going up.”

MoneyLion is enjoying a successful pivot from a neobank to what is essentially a consumer and business financial services portal and shopping mall. Among the products its “essential” consumers are buying more of from the site and app: buy now, pay later, income advances, earned wage access, secured card products and short-term installment loans. What’s not moving yet: mortgages. However, Choubey expects business to increase if the Fed cuts prime rates as expected in September.

Q2 Earnings

Whatever Choubey and his team are doing is working. By the numbers, total revenues, net increased 23% to $130.8 million for the second quarter of 2024 compared to the second quarter of 2023, with a net income of $3.1 million for Q2 coming in the second versus a net loss of $27.7 million in the second quarter of 2023. Adjusted EBITDA was $18.5 million for the second quarter of 2024 versus $9.2 million in the second quarter of 2023.

Total customers grew 73% year-over-year to 17 million and total originations grew 40% to $770 million. The growth comes not only from the middle-income consumers Choubey referenced but from the ecosystem strategy that the company embarked on in mid-2023. That ecosystem will expand, he said. The company has launched a search tool on its site and is working on its checkout solution.

And speaking of search, one of the most interesting points of the conversation with Webster occurred when she asked Choubey if the Google antitrust decision could open some opportunities for his company as a customer acquisition and marketplace solution.

“We’re now building these web tools for any CMO that runs a financial institution, a bank, a lender … to actually think of MoneyLion as a channel,” he told Webster. “Just like they think of Google SEO as a channel.” He emphasized that the company’s teams are now optimizing bidding strategies and audience building on MoneyLion’s channel, similar to how they approach other major platforms.

Choubey also highlighted the company’s acquisition of Even Financial as a key component of this strategy, allowing MoneyLion to operate its own “walled garden” in the financial services ecosystem. This approach aims to provide a more precise and personalized experience for consumers seeking financial products, moving away from the “flea market” approach common in the industry.

Growth Drivers

Choubey outlined three main growth drivers for MoneyLion: increasing the number of suppliers (lead sources), expanding the consumer base, and broadening the range of financial product options available on the platform. The company reported that third-party products have eclipsed MoneyLion’s own offerings, accounting for 51% of products taken on their marketplace to date.

“We measure success by how many decisions a consumer’s making on our platform in a recurring manner over time,” Choubey stated, emphasizing the importance of user engagement and trust in the ecosystem.

Regarding MoneyLion’s banking strategy, Choubey presented a nuanced approach. “We don’t believe that we are the best banking solution for every American out there,” he said. Instead, MoneyLion positions itself as an “interface layer,” complementing existing banking relationships while serving as an first bank account for certain segments of the population.

The company is also making strides in implementing AI capabilities despite the challenges in the financial services sector. “It’s really hard to build GenAI capabilities in financial services,” Choubey noted, highlighting the importance of accuracy when dealing with people’s money. MoneyLion is working on integrating AI to provide personalized insights and recommendations based on users’ financial data.

Looking ahead, Choubey expressed confidence in MoneyLion’s long-term prospects, despite short-term stock market reactions that resulted in MoneyLion stock price taking a hit despite its successful earnings.

“Our team is doing such great work to ultimately get the essential workforce access to premium capabilities and insights that no one else is really creating for that universe,” he said. “It’s an important thing that we’re doing. And I think in the long run. I tweeted this today: In the short run, it’s a voting machine; in the long run it’s a weighing machine. I think we’re in a way pretty heavy in the long run.”

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With consumer expectations rapidly evolving toward seamless digital experiences, banks must navigate the high costs and complexities of updating their core systems. Exploring incremental modernization through application programming interfaces (APIs) may offer a viable path forward, enabling banks to enhance their digital capabilities and remain relevant in an increasingly competitive landscape.

A recent PYMNTS Intelligence Report, “Core Strength: FIs Must Modernize to Meet the FinTech Challenge,” in collaboration with Galileo, highlights the urgent need for traditional financial institutions to overhaul their outdated systems to keep pace with digital-native competitors. The report reveals that 75% of banks struggle with implementing new digital solutions due to their legacy infrastructure, underscoring the critical nature of modernization efforts. As FinTechs continue to capture a growing market share, banks face mounting pressure to adopt agile technologies and innovative approaches.

FinTechs Are Outpacing Traditional Banks

FinTechs and digital banks have captured 47% of new account openings in the first half of 2023, a notable increase from 36% in 2020. This surge highlights their growing dominance in the market. A sizable portion of these customers — 41% — use digital-only banks for their primary banking and credit card needs, signaling a shift away from traditional financial institutions. The swift growth of FinTechs underlines the urgent need for banks to enhance their digital offerings to avoid losing more customers.

Legacy Systems Are a Major Barrier

Legacy core banking systems hinder traditional banks’ delivery of modern digital services. According to the report, 75% of banks struggle to implement new payment solutions due to outdated infrastructure. Additionally, 59% of bankers see their legacy systems as a major business challenge, describing them as a “spaghetti” of interconnected but antiquated technologies. This complexity and obsolescence make system upgrades costly and difficult.

APIs Offer a Solution for Incremental Modernization

APIs are emerging as a practical solution for modernizing banking infrastructure without complete overhauls. Nearly 47% of financial institutions are pursuing incremental core upgrades using APIs, which allow for gradual improvements and integration of new functionalities.

This method contrasts with the 13% of banks opting for full-core system replacements, highlighting the more manageable and less risky nature of API-driven updates. For instance, Deutsche Bank’s implementation of an API-accessible payments orchestration layer illustrates how such upgrades can streamline operations and enhance digital service offerings.

As FinTechs continue to disrupt the banking sector, traditional financial institutions must prioritize updating their core systems. By adopting incremental modernization through APIs, banks can improve their digital capabilities and remain competitive in a rapidly evolving landscape.

The post Three-Quarters of Banks Face Digital Banking Infrastructure Issues appeared first on PYMNTS.com.

Yet, despite its advantages, only 11% of U.S. adults have used open banking payments in the past year, even though nearly 46% express strong interest. To unlock this potential, providers must address key barriers such as security concerns, enhance awareness and implement compelling incentives.

The PYMNTS Intelligence report, “Consumer Sentiment About Open Banking Payments,” done in collaboration with Trustly, sheds light on this gap between high interest and low adoption. This gap is primarily due to limited awareness and security concerns, highlighting a significant opportunity for growth if these challenges are addressed.

Gen Z and Millennials Lead the Charge

According to PYMNTS Intelligence, 72% of Generation Z and 66% of millennials show high enthusiasm for using open banking payments, significantly outpacing older generations. In contrast, only 42% of Generation X and 22% of baby boomers exhibit similar willingness.

This generational disparity suggests that open banking providers should focus their marketing efforts on younger demographics, who are more inclined to integrate this payment method into their routine transactions. Additionally, high-income individuals are more likely to adopt open banking payments, with 50% of those earning over $100,000 annually expressing interest, compared to 42% among those with lower incomes.

Security and Trust Are Primary Obstacles

The report reveals that 56% of non-users cite trust issues as a significant barrier, while 44% are unfamiliar with the concept of open banking payments. Security concerns are particularly prevalent among older consumers, with 64% of baby boomers and seniors highlighting this issue, compared to 44% of Gen Z and millennials.

To address these barriers, open banking providers must focus on enhancing security measures, improving transparency and increasing consumer education. Partnering with established financial institutions could also help build trust and credibility.

Discounts, Loyalty Programs Can Elevate Open Banking Adoption Rates

According to the report, 38% of consumers would be more inclined to use open banking payments if offered discounts, with this figure rising to 52% among millennials and Gen Z. Similarly, 37% of consumers are influenced by loyalty programs, with a stronger preference among younger generations.

By integrating these incentives into their offerings, open banking providers can enhance appeal and encourage wider adoption. As consumers become more familiar with the benefits of open banking, their satisfaction levels rise, particularly among frequent users, with 82% of those using the payment method more than 15 times in the past year expressing high satisfaction.

As a result, this satisfaction increases their likelihood of switching to businesses that support open banking payments, further emphasizing the need for providers to create compelling incentives to drive usage.

To capitalize on the high interest but low current use of open banking payments, providers should focus on increasing awareness and trust while leveraging incentives. Tailoring strategies to highlight the benefits of open banking payments for routine transactions, addressing security concerns transparently and offering attractive incentives will be crucial in bridging the gap between consumer interest and actual adoption.

With the right approach, open banking payments have the potential to become a mainstream payment option, especially among younger and higher income consumers who show the strongest interest and willingness to integrate this innovative payment method into their financial routines.

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• Financial Shortfalls Continue to Plague SMBs
• SMBs Seek Digital Remedies for Cash Flow Pain
• From Traditional Banks to Trusted Advisers
• Writing the Digital Prescription for SMB Client Success

Financial Shortfalls Continue to Plague SMBs

Late payments, inflation and outdated payment processes create a triple threat of blocked cash flow, inefficiency and impaired decision-making for small businesses.

Inflation is stretching small businesses to their limits.

Seventy-six percent of SMBs with revenues under $10 million say they are suffering under the economy’s prolonged inflationary conditions, with a staggering 71% still experiencing cash shortfalls. Conditions have reached desperate levels for many, with 35% of SMB owners dipping into personal savings, 31% forgoing their own paychecks and 19% filling cash gaps with personal loans to keep their businesses afloat. This unrelenting pressure calls for smarter money-management tools tailored to SMBs’ needs.

Manual accounting processes exacerbate macroeconomic distress.

In an era of advanced technology, legacy accounting processes nevertheless maintain their choke hold over many business operations. An astonishing 36% of mid-sized firms are still using costly paper payments in accounts payable (AP), while 35% are wrangling accounts receivable (AR) manually. Smaller SMBs, particularly those generating less than $100,000 annually, are bearing the brunt of this inefficiency, with these work tools contributing to already highly unpredictable payment cycles.

SMBs Seek Digital Remedies for Cash Flow Pain

SMBs are aware of the need to digitalize and are actively seeking banking partnerships that can help them do so. They are also frustrated with — and ready to jettison — those that do not.

SMBs are frustrated with their current financial management and banking processes.

SMBs have a fast-growing appetite for digital banking solutions.

Going digital is more efficient, and 78% of SMBs prefer to pay employees with a click, not a check. An even greater share, at 90%, are demanding the same push-button ease for vendor payments. Nearly seven in 10 SMBs want comprehensive cash flow management tools from their primary banks. With $150 billion in annual SMB banking revenue at stake, FIs that cannot deliver on these digital demands risk both client churn and a potential share of the valuable SMB market.

SMBs are actively pursuing new banking relationships to upgrade their digital capabilities.

Small business clients discontented with current banking partners are voting with their feet. In the U.K., 25% of SMBs plan to sever ties with their primary banks within the year, while 41% of U.S. SMBs are threatening to do the same, similarly motivated by lower barriers to credit (39%), better support (33%) and more impressive digital banking experiences (32%) elsewhere. These findings suggest that banks and CUs not offering robust digital solutions could face an exodus of their SMB clients to competitors.

From Traditional Banks to Trusted Advisers

By offering digital solutions that include predictive tools, seamless integrations and tailored guidance, community banks and CUs can position themselves as strong financial management partners in their SMB clients’ success.

To become better partners to their clients, banks can partner in turn — with technology providers.

Community banks and CUs might find themselves coveting the digital arsenals of bigger banks — such as Citizens, which can now offer SMBs a 12-month glimpse into their fiscal futures with its new cash flow forecasting tool. However, FIs do not need to be megabanks to check all the boxes on SMBs’ digital wish lists. Partnerships with the right FinTechs and other payments providers can turn community banks and CUs into digital dynamos that are second to none. Golden 1 Credit Union has taken note of this, partnering with NCR Voyix to develop an adaptable digital banking platform that caters to SMBs’ evolving needs.

Writing the Digital Prescription for SMB Client Success

The traditional banking model is simply no longer enough. SMBs are demanding comprehensive digital banking solutions, but these pleas are rooted in genuine needs that reflect a rapidly digitalizing economy. As SMBs increasingly search for intuitive, integrated and insightful banking solutions, FIs — especially community banks and CUs — face an extraordinary market opportunity to redefine their roles from mere banking service providers to strategic growth partners.

PYMNTS Intelligence recommends that community banks and credit unions consider partnering with FinTechs to offer digital services to small businesses, especially if they lack these offerings in-house. This approach can be mutually beneficial to FIs and their SMB clients by doing the following:

1. Expanding product offerings: Partnerships with FinTech firms enable community banks to integrate third-party solutions, offering a more comprehensive range of financial products to small businesses. This allows banks to provide innovative digital services without having to develop them from scratch.
2. Accelerating innovation: The ease of integrating FinTech solutions allows community banks to implement them quickly, reducing the time to market. This is particularly valuable for small banks that may not have large research and development budgets.
3. Enhancing customer experience: Collaborating with FinTechs can give banks access to cutting-edge technology, enabling seamless digital experiences and personalized services for small business customers. For example, SF Fire Credit Union partnered with a FinTech to create personalized digital experiences, resulting in significantly improved application completion rates.
4. Addressing specific needs: Partnering with FinTechs can allow FIs to tailor solutions to the unique needs of their small business clients for greater satisfaction and loyalty. For instance, The Cooperative Bank partnered with a FinTech to provide advanced artificial intelligence (AI) technology for protecting elderly customers from scams.

By offering both seamless digital technology and personalized financial expertise, community FIs can forge lasting relationships with their SMB clients — and make a serious play for the gold ring of SMB digital-first banking business.

The post The $150B Question: Can Community FIs Capture the SMB Digital Banking Opportunity? appeared first on PYMNTS.com.

The bank on Wednesday announced the waitlist for Monzo for Under 16s, designed to offer money management tools to kids between the ages of 6 and 15. 

“The account gives children the opportunity to experience magic money firsts like saving, budgeting, receiving pocket money or using a card to pay in a shop, all while giving parents or guardians complete control and visibility to ensure they’re managing their money safely,” Monzo said in a news release.

According to the release, the program lets kids sign up without paying fees for top-ups, subscriptions or spending abroad. Children can set savings goals and receive scheduled pocket money, while their parents can have these accounts linked to their own to control spending, online payments and cash withdrawals.

Monzo says the Under 16s accounts also offer guidance on things like saving, budgeting and spending safely online and allow children to move up to a 16-17s account and again to a full Monzo account upon reaching adulthood.

Monzo’s efforts to help educate younger customers come at a time when many teenagers in more prosperous countries — such as the UK and U.S. — are behind in financial literacy.

Although more than two-thirds of students regularly use financial products and services, levels of financial literacy are too low to make sure they can escape financial risks, the Organization for Economic Cooperation and Development (OECD) said last month after releasing the latest volume of its financial literacy assessment.

That study examined the financial skills of 15-year-olds in 14 OECD and six partner countries and economies and determined that many of them engage in basic financial activities from a young age. 

“However, many still lack the skills and knowledge needed to make sound financial decisions: nearly one out of five students on average in participating OECD countries and economies, did not achieve baseline proficiency levels in financial literacy,” the organization said.

Meanwhile, research by PYMNTS Intelligence has found that many consumers want more financial expertise, and often look to financial institutions (FIs) for guidance, with many younger consumers being unaware of things like their credit scores.

“This may not be surprising, considering that 79% of Gen Z and millennials say they get their financial advice through social media,” PYMNTS wrote recently. “Only 11% say they use financial advisers to get the direction they need.”

The post Monzo Debuts Digital Bank Accounts for Kids Under 16 appeared first on PYMNTS.com.

The new funding, announced in a news release Wednesday (July 17), will help finance Matera’s continued expansion into North America and fuel product development. 

Matera has its roots in Brazil, a country that — per the release — “is a global standard when it comes to payments infrastructure, led by a long-standing innovative central bank agenda.”

Payments through the Brazilian central bank’s Pix system account for more than 40% of all electronic transactions in the country. Matera’s solution, meanwhile, processes more than 5 billion transactions a year, almost half of which are initiated by scanning a QR Code.

“Pix set the standard for the digital finance revolution,” Carlos Netto, co-founder and CEO of Matera, said in the release.

“At Matera, we know first-hand the pressure for banks to modernize their infrastructure to keep up with innovative new payment methods such as instant payments and pay-by-bank. 

We’re honored to leverage our PIX expertise with proven solutions to help financial institutions across North America keep pace with their customers’ digital demands.” 

Matera announced plans to expand into North America in late 2022 and last year introduced its flagship offering for the region, known as Digital Twin.

As PYMNTS reported at the time, this is a cloud-native software designed to sit on top of a financial institution’s core banking platform, allowing for real-time transaction authorizations and balance updates 24/7 for various financial accounts.

Digital Twin is designed to allow banks and credit unions to speed their digital transformation while reducing operational costs, the company said.

Meanwhile, research from the PYMNTS Intelligence report “How The World Does Digital” backs up Matera’s statement about Brazil’s attitude toward payments, with that study showing that the country had the highest level of digital engagement of the 11 nations studied.

And Pix’s launch was a force that “lit up” Brazil, Ruben Salazar Genovez, president of cross-border payment enabler TerraPay, said during a recent PYMNTS panel discussion.

“In many ways, Pix is the enabler for this impressive digital adoption in Brazil,” he said. “The gig economy, content creators, gaming, streaming services like Netflix or marketplaces like Mercado Libre, all of them need efficient payment infrastructure. So Pix is the backbone of this digital adoption in Brazil today.”

Pix, said Genovez, also helped businesses and consumers to engage across digital marketplaces, while setting the stage for FinTechs and other digital-only innovators — to the point that the country has been the source of 45% of FinTech revenues in the region as neobanks such as Nubank have gained ground.

The post Matera Gets $100 Million to Expand Banking Software Footprint appeared first on PYMNTS.com.

Kowal left the bank during the past week, and an internal memo that announced the move in late June did not mention a reason, Reuters reported Sunday (July 7), citing the memo.

TD Bank did not immediately reply to PYMNTS’ request for comment.

Kowal, who had been with the bank since 2017, will be succeeded by Deputy Chief Compliance Officer Erin Morrow, according to the report.

Morrow joined TD Bank in January from Citi, where she had been for more than 10 years, per the report.

This report comes about six weeks after it was reported that TD Bank had fired more than a dozen employees and begun an overhaul of its processes as part of its efforts to address earlier failings in its anti-money laundering (AML) program.

The bank began this comprehensive overhaul of its AML practices amid regulatory scrutiny and legal challenges focused on problems with its AML program, the Wall Street Journal reported on May 23.

To address the shortcomings in its AML program, TD Bank brought in top talent with experience in transforming and leading AML programs at major banks, cooperated closely with authorities by providing documentation and internal video recordings related to the matter, and invested 500 million Canadian dollars (about $365 million) in its AML program, per the report.

On June 5, Bloomberg reported that TD Bank could be facing fines of up to $4 billion in relation to money-laundering probes in the United States alone.

Investigations by U.S. authorities revealed cases involving a former TD Bank branch employee in Florida who allegedly accepted bribes to help clients move millions of dollars to Colombia, as well as a former employee in New York who admitted to defrauding a customer by circumventing the bank’s compliance measures.

In a statement provided to PYMNTS on June 4, a bank spokesperson said: “When we became aware of these matters, we took action against these employees, coordinated efforts with the DOJ [Department of Justice], and have supported their work to bring these criminals to justice. More broadly, where our program was ineffective, we have held those leaders accountable and are taking action to drive the changes and meet our obligations.”

The post Report: TD Bank Chief Compliance Officer Monica Kowal Leaves Job appeared first on PYMNTS.com.

In this effort, the bank will use existing technology to lower the cost of expansion, Bloomberg reported Monday (June 17), citing unnamed sources.

BBVA did not immediately reply to PYMNTS’ request for comment.

The project is led by the head of BBVA’s digital bank in Italy, Javier Lipuzcoa, and the bank is preparing a feasibility study and putting together a team that would lead the new unit, according to the report.

This effort follows a similar expansion by BBVA into Italy, a move that exceeded expectations and drew more than 420,000 sign-ups, the report said.

The move also comes at a time when JPMorgan Chase & Co. and other firms are also looking to offer digital banking services in Germany, per the report.

BBVA launched in Italy in October 2021, offering a fee-free account and card for customers’ everyday business and competitively priced financing and savings products, the bank said in a November 2023 press release.

“The products most in demand by Italian customers include the Stipendio in Anticipo, which lets you request a salary advance of up to €1,500 [about $1,610], and which is totally free if the customer advances the salary up to five days; the Prestito Immediato, a personal loan that can be taken out online in just a few clicks or the Pay&Plan, which makes it possible to split payments of up to €1,500,” the company said in the release. “Overall, nearly 9,000 customers have requested these services.”

In another recent move, BBVA launched a hostile takeover bid for domestic peer Sabadell days after Sabadell rejected an earlier merger proposal.

BBVA’s latest bid mirrors the terms of the previously rejected one, which Sabadell’s board of directors concluded did not align with the best interests of the bank and its shareholders. BBVA said the offer was generous.

The roots of that corporate saga trace back to November 2020, when both banks initially unveiled plans for a merger, citing the need to fortify themselves amid the economic uncertainties stemming from the COVID-19 pandemic.

The post Report: Spain’s BBVA Considering Opening Digital Consumer Bank in Germany appeared first on PYMNTS.com.

That’s why the finance industry must continually modernize the banking experience — and its relatively monolithic core architecture — to adapt to technological, behavioral and market disruptions.

With the news Wednesday (June 12) that JPMorgan has joined the MACH Alliance, a not-for-profit industry body dedicated to advocating for open, best-of-breed technology ecosystems, embracing MACH principles is on the agenda for FIs looking to leverage composability to compete in the digital ecosystem.

“At J.P. Morgan Payments, we continue to deliver new solutions and enhance our capabilities as we build a modern payments business globally … The movement toward MACH is an exciting transformation and we look forward to helping our clients accelerate innovation to better deliver more seamless and secure experiences for their end customers in a rapidly evolving landscape,” said Kate Walton, chief commercial officer, merchant payments at J.P. Morgan Payments in a statement.

By embracing composable banking built atop MACH architecture principles — Microservices, API-first, Cloud-native, and Headless — FIs can not only meet but exceed the changing demands of digital-first customers by offering agility, scalability and innovation.

Composable banking, as the name implies, uses components instead of monolithic mainframes to deliver financial services. Observers increasingly believe it will shape opportunities within both digital banking and next-generation financial services. 

Read more: Experts Say Composable Banking Builds Better Digital Customer Experiences

Embracing the MACH Opportunity in Financial Services

By adopting Microservices, API-first, Cloud-native, and Headless (MACH) principles, FIs can transform their operations, delivering superior customer experiences, achieving operational efficiency and maintaining a competitive edge. 

“It’s becoming an imperative to improve the operational efficiency at these legacy banks and be more responsive to client needs and industry trends,” Galileo Head of Product Strategy Michael Haney told PYMNTS, explaining that the new generation of platforms is being based on MACH principles.

That’s because today’s financial services customers are digital natives, accustomed to seamless, instant and personalized experiences. They expect the same level of service from their banks and financial institutions as they do from leading tech companies. This shift necessitates a fundamental transformation in how financial services are delivered.

“Banks still play the role they’ve always played, but as we become digital, as we become mobile, and as the banks become branchless, the relationship becomes centered in the technology and the capabilities — not always the individuals, the bankers that knew you,” Shaunt Sarkissian, founder and CEO of AI-ID, told PYMNTS.

The traditional monolithic architecture, characterized by large, interdependent systems, is ill-suited for this new reality. These systems are often slow to adapt, difficult to scale and prone to outages.

But what exactly does embracing a MACH architecture entail?

Read more: How APIs Bridge Modern and Legacy B2B Payment Architectures

Unlocking Microservices, API-first, Cloud-native and Headless Architecture

For a better understanding of MACH, let’s take a look at the features embedded in the acronym.

Microservices architecture breaks down a monolithic application into smaller, loosely coupled services, each responsible for a specific business function. This modular approach allows teams to develop, test and deploy microservices independently, enabling faster release cycles and reducing time-to-market. Adopting microservices means being able to quickly adapt to regulatory changes, launch new products and integrate with FinTech innovations without overhauling entire systems.

As Form3 U.S. CEO Dave Scola told PYMNTS, “creaking, older legacy platforms” are struggling to adapt to new demands.

In an API-first approach, APIs are designed and developed before the actual application. This ensures that all services can communicate seamlessly and allows for easy integration with third-party systems.

“One of the biggest things that organizations are looking for is, ‘How can I use my current infrastructure and the partnerships that I have?’” said Aaron Le Hew, director of invoice-to-cash at Esker, in a conversation with PYMNTS posted May 23.

Adopting a cloud-native approach enables financial institutions to deploy updates and new features rapidly, responding to customer needs in real-time. 

“Historically, it was just banks competing with banks. But increasingly, FinTechs and other disruptive entrants are leveraging solutions … innovations and competitive offerings … which can be costly and complex for banks to quickly stand up,”  William Artingstall, global co-head of cross-border payments and receivables at Citi, told PYMNTS.

Headless architecture decouples the front-end presentation layer from the back-end services, allowing a bank to offer a mobile app with a user interface optimized for quick transactions, while simultaneously providing a detailed, interactive web portal for in-depth financial planning.

Ultimately, implementing MACH architecture is not merely a technological upgrade; it is a strategic imperative for financial institutions aiming to thrive in the digital-first era. The journey to MACH may be challenging and require an internal culture shift, but the rewards — a more agile, scalable and innovative organization — are well worth the effort. 

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