Thought Leadership

3 Payments Shakeups This Summer That Will Shape Fintech in 2027

3 Payments Shakeups This Summer That Will Shape Fintech in 2027
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series, Thought Leadership

It is clear that the payments industry is entering its next phase. With stablecoins, AI advancements, and real-time payments, the payments scene of 2026 is a vastly different landscape from what it was in 2012. In this new era, success depends on scale, specialization, and settlement infrastructure.

This summer, three major announcements in the payments space have both supported evidence of this new era and hinted at where we can expect it to go next. Here are the top three headlines that will have impact on the space in the months to come.

Ant International raises $1.2 billion to expand cross-border payments and agentic commerce

What happened: Singapore-based Ant International raised $1.2 billion in Series A funding. The company said it will use the investment to accelerate global expansion, strengthen cross-border payments infrastructure, and invest in AI-powered merchant services and agentic commerce solutions. Ant International already connects more than 150 million merchants with over 2 billion user accounts through businesses including Alipay+, Antom, and WorldFirst.

Why it matters: The move to expand internationally and bolster its cross-border payments indicate two things. First, it shows that infrastructure for cross-border, agentic payments is becoming increasingly valuable, even if consumers are not ready for an agentic-led future. Second, Ant International’s plan for growth suggests that the company is readying for a potential future IPO. It is rumored that Ant International plans to IPO in Hong Kong as early as this year, which has the potential to create a new global payments heavyweight.

Stripe and Advent’s Failed $53 billion bid for PayPal

What happened: Stripe and private equity firm Advent International have made a joint offer to acquire PayPal Holdings. The move would have taken PayPal private and offered Stripe scale in addition to access to PayPal’s progress in the DeFi space, including its own stablecoin PYUSD. PayPal’s board rejected the bid, saying that it undervalues the company.

Why it matters: Whether or not a deal materializes, the reported bid signals that large payments platforms remain highly valuable strategic assets. It also suggests that established payments companies are increasingly being evaluated not only for their merchant and consumer networks, but also for emerging capabilities such as stablecoins, digital wallets, and AI-driven commerce, as well as their long-standing reputation and trusted consumer relationships.

Open USD Consortium launch

What happened: Visa, Mastercard, Stripe, Coinbase, and more than 140 other companies joined forces to launch Open USD, a consortium-backed stablecoin designed to create an open, interoperable digital dollar for business payments. Open USD will be operated by Open Standard to ensure decisions are made for the collective interest, not a single entity.

Why it matters: The new consortium offers a standardized, interoperable way for businesses to mint and redeem Open USD without relying on a single issuer or payments provider. By bringing together competitors such as Visa, Mastercard, Stripe, and Coinbase, the initiative could accelerate enterprise adoption of stablecoins for cross-border payments, treasury management, and settlement while reducing concerns about vendor lock-in.

Reading Between the Headlines

Taken individually, these stories may seem unrelated. Together, however, they reveal that the payments industry is undergoing a transformation. While the industry used to favor those who could process a transaction the fastest or cheapest, in 2026 however, the winners will be those that build the most intelligent, connected, and globally interoperable payments ecosystem will be the winners.

For banks, fintechs, and payments providers, success in the years ahead will rely on more than just the ability to keep pace with new technologies. It will require rethinking how money moves in an era of AI-native commerce, global payment networks, and digital-dollar infrastructure. Organizations that embrace agentic capabilities, integrate stablecoin-based settlement where it adds value, and build for interoperability will be better positioned to meet evolving customer expectations in 2027 and beyond.

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Fintech Fundraising Has Changed. What Should Founders Focus On?

Fintech Fundraising Has Changed. What Should Founders Focus On?
By Julie Muhn (@julieschicktanz) Posted on
Categories: IMPACT, Thought Leadership

Many of us fondly remember when, just a handful of years ago, VC funding was abundant. It was a golden era in which startups competed for investor attention, valuations climbed quickly, and founders optimized for growth.

Fast forward five years, and the situation is much different. Venture funding has become much more selective, and while it often favors cutting-edge technologies such as AI and the blockchain, investors have much higher expectations than they did at the dawn of the decade, wanting to see proven traction much earlier. Between the changing economics and new technologies, it is clear that the fundraising environment for fintechs has evolved.

AI is reshaping where venture dollars go

By now, it’s no secret that AI-focused fintechs and ideas are garnering a lot of VC funding. According to CB Insights’ State of Venture 2025 report, AI startups raised $226 billion in 2025, a figure that represented 48% of all global venture funding. This doesn’t mean investors have lost interest in fintech. Instead, fintech companies are increasingly expected to demonstrate how AI strengthens their product, operations, or competitive moat.

All of this is happening while deal counts continue to decline and total venture funding has increased, suggesting that more money is flowing to fewer companies. In other words, fintech fundraising has become increasingly challenging. Generalist investors who previously backed broad fintech opportunities may now devote more attention to AI infrastructure and applications. Therefore, fintech founders need to explain not only why their business matters, but also how AI strengthens their competitive advantage.

Investors are rewarding efficiency more than growth

In 2021, many investors were myopically focused on growth. Today, it is clear that the “growth at all costs” mentality has ended as investors have shifted their focus to long term sustainability. Higher interest rates, a more disciplined venture market, and several years of valuation resets have encouraged investors to prioritize sustainable businesses over rapid expansion. Five years ago, investors used to focus on how fast a company can grow and today they are asking if companies can survive, scale responsibly, and solve a meaningful problem.

What is clear is that investors are looking for sustainable unit economics, realistic customer acquisition costs, recurring revenue, capital efficiency, and credible pathways to profitability. The question has shifted from “How quickly can this company grow?” to “Can this company build an enduring business?” In the fundraising environment of 2026, disciplined execution and financial resilience have become just as compelling as ballooning growth projections.

Relationships matter more than ever

In a world where funding is more competitive than ever, what’s the best move for a founder? Just as with enterprise sales, relationships, fit, and timing matter when it comes to fundraising. At a time when fewer companies are receiving funding, warm introductions and a precise founder-investor fit become the two elements that can make the difference between getting a meeting and getting funded.

Given this, the strongest approach for founders is to spend time building relationships before formally raising capital. Instead of pitching everyone, founders’ strategy looks like building credibility with the right investors.

What’s a founder to do?

None of these changes mean fundraising has become impossible. But they do mean that founders need a different playbook than they did just a few years ago.

That’s one reason Finovate launched the new IMPACT Funders & Founders event. As fundraising becomes more relationship-driven and investors become more selective, founders benefit from opportunities to meet qualified investors, hear directly from active VCs, and build connections before they need them most.

The good news is that capital will continue flowing to companies solving meaningful problems. The founders who understand and adapt to today’s investment landscape will be best positioned to secure it.

Finovate’s IMPACT Funders & Founders event takes place on September 11, 2026 in New York. Reserve your spot today and check out our blog coverage for more detail on what to expect.

For more founder-focused insights on the current market, check out a panel conversation from FinovateSpring where investors discussed where investment will continue, shared their thoughts on M&A expectations, and analyzed whether or not the bubble has already burst in fintech.

Photo by Edge Training

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What’s Really Behind Robinhood’s 7% Yield?

What’s Really Behind Robinhood’s 7% Yield?
By Julie Muhn (@julieschicktanz) Posted on
Categories: Julie's Column, Thought Leadership

Robinhood announced a handful of features last week, including the rollout of Robinhood Earn, a decentralized lending product that allows people to lend their dollar-backed USDG through a self-custody wallet at an estimated 7% APY. This estimated 7% APY on USDG stablecoin deposits is high enough to raise eyebrows, especially at a time when banks are paying closer to 3% to 4% on their highest-yield savings accounts. So how can Robinhood sustainably offer 7%?

Robinhood Earn

First, let’s take a look at the details of the launch. Robinhood Earn applies to USDG, a stablecoin issued by Paxos Digital Singapore and Paxos Issuance Europe. Robinhood is not paying 7% APY on bank deposits. Instead, the yield is generated by lending activity for Robinhood users who lend stablecoins using Morpho, a decentralized lending protocol that powers onchain lending. Just as with fiat lending, there is risk in lending stablecoins. Users still assume the risk on the deposits. However, Robinhood has partnered with Lloyd’s of London and RELM to protect covered losses in the event of cyber or smart contract exploits. Essentially, the company is bringing decentralized finance (DeFi) into a familiar customer experience.

The 7% interest strategy appears no different from a fintech offering a new high-yield savings account that pays an above-average yield of over 4% APY in order to incentivize consumers to open new accounts. It is a marketing tool. Robinhood’s new DeFi lending product is already integrated into its mainstream brokerage experience, so the 7% is the additional incentive for users to convert cash to USDG, begin using Robinhood Chain, and eventually use tokenized assets and on-chain services.

Should banks offer 7% yield?

It is important for firms to recognize that yield has become a feature, not the product. If stablecoins become everyday money, what role does the deposit account play? If consumers can earn yield without a traditional bank account, how should banks compete? And what happens when customers don’t even realize they’re using decentralized finance?

The answer isn’t necessarily to match Robinhood’s 7% yield, which is good, because banks already know that offering a 7% yield is off the table. Instead, banks should focus on the advantages DeFi can’t easily replicate:

  • Trust
    FDIC insurance, consumer protections, fraud resolution, and regulatory oversight still matter—especially during periods of market volatility.
  • Financial relationships
    Consumers don’t just need a place to store money. They need mortgages, auto loans, credit cards, financial advice, and payment services. Banks have an opportunity to integrate yield-generating products into a broader relationship.
  • Simplicity
    Robinhood’s announcement demonstrates that consumers don’t want to navigate wallets, bridges, or smart contracts. Banks that can abstract blockchain complexity while maintaining a familiar customer experience will be well positioned.
  • Hybrid models
    Rather than viewing DeFi as competition, banks may eventually incorporate tokenized deposits, stablecoins, or on-chain lending into their own offerings, allowing customers to benefit from blockchain infrastructure without leaving the regulated banking system.

In the new era of finance, the winners will be those that make DeFi invisible. Just as most consumers don’t think about ACH, RTP, or card networks when they use a credit card, in the future they may not care whether their yield comes from a bank balance sheet or an on-chain lending protocol. Instead, they’ll choose the institution that offers the best combination of return, trust, and convenience.

Photo by Andrew Neel

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5 Things to Know about TradFi’s Move to Control Digital Money Infrastructure

5 Things to Know about TradFi’s Move to Control Digital Money Infrastructure
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series, Thought Leadership

Late last week, a handful of the largest US banks revealed a plan to launch their own tokenized deposit network.

JPMorgan, Citi, Bank of America, Wells Fargo, and other major banks will launch the new network, which is set to launch by mid-2027. The banks are launching this new network in partnership with The Clearing House (TCH), a bank-owned consortium that operates critical US payment infrastructure, including the RTP network, which enables real-time payments between participating financial institutions.

The initiative will connect traditional banking infrastructure with blockchain-based payments while keeping deposits inside the banking system. Here are five things banks and fintechs should know.

TradFi’s answer to stablecoins

With a market value of more than $316 billion, stablecoins are no longer a crypto experiment. Stablecoin issuance is projected to reach between $3 trillion and $4 trillion by 2030. This growth has the attention of some of the largest banks in the world, warranting a coordinated response.

Similar to stablecoins, a tokenized network offers 24/7 infrastructure and programmable payments, allowing banks to deliver many of the benefits associated with stablecoins. Most notably, the tokenized deposits network will not require customers to move funds outside the traditional banking system, meaning banks will be able to retain their deposits.

Because tokenized deposits are still bank deposits, they retain the same regulatory treatment, accounting treatment, and credit-risk profile as traditional deposits. Tokenized deposits are different from traditional deposits in that they are represented on blockchain infrastructure instead of existing bank ledgers.

It’s about controlling infrastructure

For much of the past decade, fintech competition centered on who could best distribute products and services. Fintechs and banks competed to acquire customers, launch new apps, and build better digital experiences. Recently, however, firms have shifted their focus to controlling the infrastructure that powers financial services.

This race toward infrastructure can be seen in Stripe acquiring Bridge to gain stablecoin infrastructure, Visa’s and Mastercard’s recent investment in stablecoin settlement capabilities, and in banks’ efforts to build tokenized deposit networks. Rather than competing for customer relationships, these companies are positioning themselves to own the rails that move money.

The new tokenized deposit network creates a shared infrastructure layer for programmable deposits and real-time settlement, allowing participating banks to ensure they remain at the center of digital money movement.

The initial target is corporate treasury, not consumers

The new tokenized deposits network will initially be aimed at corporate treasury, which means it will likely not reach consumers before 2028.

TCH expects early demand to come from multinational corporations seeking treasury automation, real-time liquidity management, cross-border payments, and programmable payments. These are the same use cases that have helped stablecoins gain traction among businesses.

While some of these workflows and use cases are applicable to retail clients, businesses stand to benefit the most from real-time settlement, programmable payments, and always-on liquidity management. For that reason, the battle between tokenized deposits and stablecoins may take place in corporate treasury long before it reaches the consumer wallet.

A tokenized network offers 24/7 infrastructure

One of the biggest benefits of blockchain-based payments is that they do not operate on traditional banking schedules that have batch processing at the end of each day.

The new proposed network would allow tokenized deposits to settle 24 hours a day, 7 days a week. This continuous movement helps banks compete with stablecoin networks that already offer near-instant transfers at any time.

Smaller institutions will eventually need a position

With large financial institutions taking the lead on this new tokenized deposits network, where does that leave smaller community banks and credit unions? These smaller institutions will need to find their role in a world where money increasingly moves on programmable infrastructure.

Fortunately for these smaller institutions, the network is expected to be available to banks across the US, not just the largest institutions. As different digital asset infrastructure matures, financial institutions may need to determine their stance on whether they will issue, connect to, custody, or simply enable access to these new forms of digital money.

Photo by Markus Winkler on Unsplash

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Why Banks Should Pay Attention to a Visa–Mastercard–Stripe–Coinbase Stablecoin Alliance

Why Banks Should Pay Attention to a Visa–Mastercard–Stripe–Coinbase Stablecoin Alliance
By Julie Muhn (@julieschicktanz) Posted on
Categories: Julie's Column, Thought Leadership

While many banks are still trying to create their stablecoin strategy (or decide to pursue a stablecoin strategy), some of the largest players in payments, acquiring, exchanges, and financial infrastructure are exploring a stablecoin collaboration.

CoinDesk reported that payments giants Stripe, Visa, and Mastercard are backing a stablecoin platform, while Coinbase is considering involvement. The move could challenge the dominance that Circle and Tether have on the stablecoin industry by helping standardize digital currency routing across legacy systems

What impact will this disruption have on players in the traditional space? Here are a few implications.

Stablecoin interoperability improves

As with many new enabling technologies in banking and fintech, stablecoins are quite fragmented. Even though Circle and Tether dominate issuance, moving stablecoins across wallets, exchanges, payment providers, and legacy financial infrastructure remains complex. Additionally, there is no universally accepted framework for how digital currency moves across financial infrastructure.

While both of these factors limit mainstream adoption, a consortium backed by companies such as Visa, Mastercard, Stripe, and Coinbase could help create a common framework that makes digital currency movement feel more like existing payment infrastructure.

For financial services providers in the traditional finance (TradFi) space, this common framework could help decrease integration costs, making stablecoin connectivity easier to implement. The shared framework could lower integration costs by reducing the number of connections banks and fintechs must build and maintain. A standardized ecosystem could potentially offer more consistent routing, settlement, and compliance processes. Importantly, the standardization would mean that banks would be able to act now instead of waiting for the winning standard to emerge.

Stablecoins become infrastructure instead of products

Right now, much of the conversation around stablecoins focuses on which company issues the token used for a transaction. Consumers, however, rarely care which payment rail, settlement network, or digital asset powers their transaction. Instead, they simply expect money movement to be fast, seamless, and secure.

For banks and fintechs, this may mean that owning the token itself becomes less important than controlling the infrastructure surrounding money movement. When consumers are rails agnostic, we may start to see that the companies that facilitate routing, settlement, custody, compliance, and customer experiences gain a competitive advantage over those that issue the underlying asset.

Economics of traditional payments face new pressure

Stablecoins are likely here to stay, but they will not replace cards, wires, or ACH payments. However, if major payment players like Visa and Mastercard help introduce new stablecoin infrastructure, it could create pressure on existing payment economics. For example, cross-border payments and merchant settlement could become faster and potentially less expensive.

This increased competition, even if only viable in certain use cases, could reduce margins and force traditional financial institutions to reconsider where they create value. Because both Visa and Mastercard have a stake in traditional payments, however, they are unlikely to introduce a structure that will eliminate traditional payment revenues altogether. Instead, there will likely be gradual pressure on pricing and a shift toward monetizing new infrastructure layers rather than existing friction.

Stablecoin strategy becomes harder to postpone

It is clear that stablecoins are no longer fringe, and at this point, sitting on the sidelines becomes a strategic decision. While it used to be acceptable to treat stablecoins like an optional experiment, the involvement of established financial infrastructure companies makes it mandatory to understand stablecoins. Traditional financial institutions of all sizes need to consider if they will issue stablecoins, custody them, connect to them, or simply enable customer access.

While the “wait and see” approach is still a valid strategy, at this stage it is more of an active strategic decision instead of a passive delay. Financial institutions that choose not to participate should do so intentionally, taking into consideration which revenue opportunities, customer segments, and payment flows they may be willing to forgo if adoption accelerates.

Photo by Thirdman

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6 Arguments For and Against Prediction Markets as Spain Cracks Down

6 Arguments For and Against Prediction Markets as Spain Cracks Down
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series, Thought Leadership

Spain’s ministry of consumer rights blocked access to Kalshi and Polymarket this week. The country has paused the use of the prediction markets (also known as event contracts) as it determines whether their models are operating legally without a gambling license.

Spain joins France, Belgium, the Netherlands, and Romania, which have all limited or blocked access to Polymarket.

The controversy begs the question: are prediction markets useful forecasting tools, speculative tools, or simply gambling platforms wrapped in fintech language? With that in mind, here’s a look at three arguments for and three arguments against event contracts.

Three arguments for

Supporters argue that prediction markets are not necessarily about gambling, but rather about information discovery.

  • Prediction markets can aggregate information more efficiently than polls or experts
    Prediction markets force participants to put money behind their convictions, which essentially rewards accuracy with financial incentives. Supporters argue this makes them more effective than polls or expert commentary at forecasting future events because markets continuously absorb new information and update probabilities in real time.
  • Financial markets already operate as forms of event contracts
    If you’ve ever invested in single stocks, you’ve essentially participated in prediction markets. The only difference is that, with stocks, investors are limited to predicting the outcome of a company instead of an event. Bonds and derivatives are also a type of prediction as well, as bonds essentially price default risk and derivatives price probabilities. This raises the question, why is betting on election outcomes different from betting on interest-rate moves.
  • Prediction markets could improve forecasting
    Because they are a useful tool for crowdsourcing information, prediction markets can be used by businesses or governments to improve decision-making. Users are more likely to make predictions on events about which they are knowledgeable, and this information could be helpful for forecasting recessions, fraud, supply chains, elections, and demand. Because they can source this information quickly, prediction markets can surface truths faster than committees or social media.

Three arguments against

Opponents argue that event contracts cause unwanted externalities

  • They may incentivize harmful or unethical behavior
    Oftentimes, event contracts offer events surrounding wars, assassinations, elections, and disasters. These are uncomfortable things to bet on, as it may feel as if users are rooting for these outcomes. Additionally, this raises ethics concerns over investors profiting from others’ tragedies.
  • Markets can be manipulated
    Even though prediction market outcomes may appear more organic than the performance of publicly traded companies, they are not immune to manipulation. Deep-pocketed participants willing to absorb larger losses may attempt to distort market odds, while coordinated misinformation campaigns and bot-driven activity can artificially influence sentiment and pricing. As event contracts become more popular, concerns are growing that the markets themselves could shape public perception rather than simply reflect it.
  • They lack consumer protections and regulatory frameworks
    Across the globe, prediction markets are relatively new and therefore lack regulation, as they don’t fit cleanly into existing categories. It is unclear if they are considered securities, gambling, or derivatives and therefore lack proper regulatory oversight and consumer protection standards.

As prediction markets continue to grow in popularity, regulators will increasingly need to decide whether these platforms belong within financial services, gambling, or an entirely new category. Spain’s move suggests that many jurisdictions are still uncomfortable with the idea of turning elections, world events, and public sentiment into tradeable assets.

Photo by Dante Grime Kahan

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How Tokenization, AI, and Banks Can Drive the Future of Commerce

How Tokenization, AI, and Banks Can Drive the Future of Commerce
By David Penn Posted on
Categories: FinovateSpring 2026, Thought Leadership

With the wealth of conversation about AI at FinovateSpring just a few weeks ago, what are some of the key takeaways on how businesses are understanding and deploying the technology?

One of the more compelling presentations on this issue was the keynote address provided by Chris Nichols. Nichols is President of Institutional Banking at SouthState Bank where he supports innovation, AI, digital assets, loan pricing, asset-liability management, open banking, payments, and fintech investing. He is also producer of the Banker-to-Banker blog. Based in Winter Haven, Florida, SouthState Bank traces its roots back to First National Bank, founded in 1933 in South Carolina. Today, the institution has more than 370 branches across eight states and, last year, completed a major $2.49 billion acquisition of Texas-based Independent Bank Group. SouthState Bank reported total assets of $66 billion as of Q3 2025.

In his keynote, Why Agentic AI is Truly a New Frontier in Financial Services & How Agentic Commerce Will Reshape the Retail Landscape, Nichols suggested that the intersection of tokenization, a technology that comes to us from blockchain technology, and agentic AI, the leading iteration of AI technology today, will radically change payments and commerce and, as an impact, change the way we order our professional and personal lives. These developments also introduce a major challenge and opportunity for banks. Here are some takeaways from his address.

Tokenization, Micropayments, and Smart Money

Nichols pointed out that tokenization and blockchain-based payments are poised to significantly reduce friction and costs for most transactions. This is huge for cross-border payments especially, but the technology would help enable 24/7 settlement, off-hour transactions, smart contracts, programmable money, and other capabilities.

It is easy to point to the cost of transactions like wire transfers and paper checks. But even instant payments as currently configured are significantly more costly than what is promised in a world of tokenized payments. In addition to payments that, in Nichols’ words, could cost less than a penny, the infrastructure that supports tokenized payments would also enable true micropayments and transactions of less than a cent. Such payments may have had little utility a few years ago, but the rise of the subscription economy and the gig workforce have created demand for a new kind of payment flexibility.

“As we think this through, we see commerce evolving dramatically,” Nichols said from the FinovateSpring stage. “If you are a content provider or another type of digital agent and you need 1/30,000th of a cent, it changes the face of commerce.”

Not only will tokenization make transactions faster and less expensive, transactions will also become intelligent. The ability to program money, to create smart contracts that are executable only when certain conditions are present, could revolutionize lending in finance, claims processing in insurance, and fractional ownership of assets in real estate—to name a few likely use cases.

Agentic Commerce’s Autonomous Participants

Interestingly, Nichols pointed out that what many of these smart contracts and programmable money technologies are likely to do is send commands not to human actors but to AI agents who will carry out the requisite tasks. Nichols used the example of planning and traveling to FinovateSpring in San Diego as work that will soon be completed almost 100% by AI agents acting on an individual’s behalf—from travel planning and hotel booking to registration fees and hotel bill.

What was especially noteworthy about Nichols’ observation was the role of discovery that these autonomous actors will play in a world in which they—the AI agents—are doing the research, inquiry, and even negotiation with various merchants, vendors, and other agents. “Yes, although humans will initially remain in control, the major debate is how much autonomy people are willing to give their agents,” Nichols said in response to an audience question. “The next evolution will likely involve validating agents independently, rather than always validating them via a human intermediary. Eventually, agents may even create other agents.”

AI Orchestration as an Opportunity for Banks

Where does this leave banks?

One major role for banks in this emerging environment is that of an orchestration platform. In this view, banks evolve into 21st century financial services facilitators, moving beyond deposits and money movement to serve as the infrastructure layer for a wide variety of financial workflows for multiple participants. The tasks of the bank would be to coordinate, automate, and secure the actions of everyone and everything from individual consumers and businesses to merchants and suppliers, and from payment rails and compliance systems to lenders and third-party platform partners—and their AI agents.

“For example, consider a property management company,” Nichols suggested. “An agent could upload lease agreements, read and structure them into smart contracts, enable renter payments, collect security deposits, and authorize recurring monthly payments. Renters could pay using credit cards, ACH, cash deposits at a branch, or deposit tokens.” Nichols explained how these funds could then be routed automatically to the property management company, which would take its share before forwarding the balance to the property owner. He pointed out that this process reduces credit risk for banks and removes the burden and potential error of the many intermediate manual processes. Nichols also noted that this was an opportunity for banks—and not just the largest institutions, either. “Agentic capabilities are making it easier than ever for smaller institutions to adapt,” he said.

“We believe banks will play a more central role in this future, often through partnerships with fintechs,” Nichols concluded. “Banks can help commercial customers move from analog sales processes to more agent-driven systems … Banks can help businesses become discoverable, move customers through the sales funnel, and handle both onboarding and follow-up processes.”

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The Consumer Credit Stack Is Being Rebuilt in Real Time

The Consumer Credit Stack Is Being Rebuilt in Real Time
By Julie Muhn (@julieschicktanz) Posted on
Categories: Thought Leadership

With new enabling technologies like stablecoins and AI moving quickly and classic fintechs like Mint.com and Dwolla making their exits, it feels like fintech is entering a new era. This is especially true in lending, where new capabilities are enabling faster, more efficient, and in many cases more customer friendly tools than we had five years ago.

Looking back at the dawn of the decade, most lending innovation focused on digitizing the application process, facilitating the onboarding process, and turning loans faster. While some of those elements are still in place today, lending has changed with better intelligence, different distribution, and new infrastructure layers underneath credit itself.

Here’s a look at what’s changed:

Underwriting is becoming continuous instead of episodic

We used to think of the FICO score as the gold standard in underwriting. Today, however, underwriting is no longer done as a snapshot in time. Instead, lenders are using cash flow underwriting to get a view of the borrower’s creditworthiness over time by considering their account balance, overdraft occurrences, loan repayments, and other risk indicators.

Cash flow underwriting is becoming increasingly common, especially as consumers become more comfortable with open banking and the concept of sharing their financial data across platforms.

Embedded lending changed consumer expectations

Embedded lending itself is not new. Uber, for example, began experimenting with vehicle financing for drivers as early as 2014. What’s changed is how targeted, contextual, and embedded these lending experiences have become.

Today, financing is increasingly surfaced directly within the software platforms, marketplaces, and operational tools where consumers and businesses already spend their time. Point-of-sale platform Toast, for example, uses merchants’ daily sales data to underwrite loans and proactively surface financing offers within the Toast platform itself.

As consumers and businesses become more accustomed to contextual lending experiences like these and embedded buy now, pay later options they are relying less on traditional bank websites or standalone loan marketplaces to search for credit products.

The interface layer Is shifting

In addition to competition from software platforms and merchant ecosystems, a third distribution channel is beginning to emerge in lending: large language models (LLMs).

Consumers are increasingly turning to platforms like ChatGPT, Claude, and Gemini for both information and guidance and decision-making, including financial decisions. As these tools become more integrated into consumers’ daily lives, many borrowers may begin consulting an AI assistant before visiting a bank website or browsing a loan marketplace. Instead of searching manually for financing products, consumers may increasingly ask an LLM to help evaluate their situation and recommend the most suitable lending option.

That shift becomes even more significant as financial data aggregation moves into these environments. Through Plaid’s partnership with OpenAI, for example, ChatGPT can now aggregate and contextualize a consumer’s financial accounts, giving the platform a much richer understanding of cash flow, spending behavior, obligations, and financial goals.

As a result, the lender may still technically originate and hold the loan, but the customer relationship shifts to the interface layer. In this emerging model, the LLM becomes the discovery engine, recommendation layer, and engagement channel sitting between the consumer and the financial institution.

What scales vs. what doesn’t

Looking back at the lending technologies demoed on the Finovate stage five years ago, there is a noticeable divide between the ideas that generated excitement in the moment and the solutions that ultimately achieved scale.

Many of the products that struggled to move beyond the demo phase shared a common challenge: they required consumers to significantly alter their existing behaviors, communication methods, or digital environments. Metaverse-based banking and lending experiences, for example, were fun to watch on stage, but they never aligned with how most consumers wanted to interact with financial products in everyday life. In many cases, they required users to adopt entirely new platforms, devices, or behaviors before their value could even be realized.

By contrast, the lending solutions that have scaled most successfully are the ones that meet consumers where they already are. Buy now, pay later (BNPL) is perhaps the clearest example. Rather than requiring consumers to seek out financing separately, BNPL options are surfaced directly at checkout within the shopping experience itself. As a result, installment financing has become an expected feature for many higher-ticket purchases rather than a niche alternative payment method.

What credit looks like by 2030

Five years from now, much of today’s lending ecosystem will still look familiar. Regulated financial institutions will continue to originate loans, underwriting will remain central to managing risk, and compliance will remain a critical consideration not only for lenders, but also for fintech partners, platforms, and emerging distribution channels.

What may look very different, however, is the interface layer between the consumer and the lender.

Consumers may interact less directly with banks and more through AI assistants, software platforms, wallets, and embedded ecosystems that help evaluate financing options on their behalf. As LLMs become more integrated into everyday decision-making, they may fundamentally reshape how consumers discover, compare, and select credit products. In that environment, traditional loan marketplaces could become far less relevant as financing recommendations are surfaced contextually and conversationally through AI-driven interfaces rather than through manual product searches.

Photo by Silvio Pelegrin

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5 Things to Know about the CLARITY Act

5 Things to Know about the CLARITY Act
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series, Thought Leadership

The US Senate Banking Committee unveiled the latest version of the CLARITY Act this week. The Act aims to establish a clear regulatory framework for digital assets.

The CLARITY Act offers enforceable guardrails for digital asset markets in an effort to protect consumers and investors, counter illicit finance and security threats, and support innovation in the US.

The bill is controversial, as it includes provisions to limit liability for decentralized software developers and enters an ongoing debate around whether stablecoins should be permitted to offer yield or yield-like rewards. After more than 10 months of bipartisan negotiations, the Senate Banking Committee is preparing for a key procedural markup. Here are five things you need to know about the new version of the CLARITY Act.

More than crypto regulation

While crypto regulation is making headlines, the Act comes with broader stakes as it also attempts to define who controls the future infrastructure of digital finance in the US. Supporters argue the Act helps preserve a more market-driven and decentralized approach by defining the boundaries of governmental power while protecting the autonomy of private developers and individual users.

This debate extends beyond crypto trading and will ultimately determine who will own and govern the next generation of financial rails. Stablecoins, tokenized assets, and AI-driven financial agents are on the rise, and the rules governing those future financial rails are yet to be settled. The companies and platforms controlling the new infrastructure could hold influence similar to what cloud providers, mobile operating systems, and card networks hold today.

Delineates between securities and commodities

The debate over whether digital assets are considered securities has been around for about a decade. That’s why determining when a token is treated like a security and when it can transition into a commodity is one of the biggest goals of the CLARITY Act. The determination will dictate how exchanges and platforms operate, which regulator oversees it, and what disclosures are required.

Yield is a battlefield

The debate over whether or not stablecoins can pay yield (or yield-like rewards) has been a major sticking point between banks and crypto firms. While banks argue that stablecoin yield products could compete directly with deposits and pull money out of the traditional banking system, crypto companies argue that restrictions would hurt innovation and competitiveness.

The Act does not explicitly use the term “yield” in relation to stablecoins. However, it does establish a regulatory framework that distinguishes between different types of digital assets based on whether they provide a financial return, such as interest. The CLARITY Act implies that if a digital asset provides a right to interest, it would likely fall under the jurisdiction of securities laws rather than being treated as a digital commodity or a permitted payment stablecoin.

While separate stablecoin legislation continues to evolve in parallel in the form of the GENIUS Act, the CLARITY Act intersects with those debates because of how digital assets offering financial return may ultimately be categorized.

About global competitiveness

Supporters of the Act argue that it is less about embracing crypto speculation and more about preventing the next generation of financial infrastructure from being built outside the US. Europe, Hong Kong, the UAE, and Singapore have already moved ahead with digital asset frameworks, and if the US does not create a set of regulatory guardrails within this arena, banks, fintechs, and crypto firms will feel less safe innovating in the digital asset space.

Even if it passes, the debate is far from over

The legislation does not resolve every concern. In fact, there are still ongoing debates around AML protections, DeFi oversight, systemic risk, political conflicts of interest, and consumer protection. So while the CLARITY Act brings more regulatory transparency to crypto, it also accelerates a broader debate about who will govern the future infrastructure of digital finance as stablecoins, tokenized assets, and AI-driven financial systems become more integrated into commerce and payments.

Photo by akbar fathi

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What I Heard Between the Sessions at FinovateSpring 2026

What I Heard Between the Sessions at FinovateSpring 2026
By Julie Muhn (@julieschicktanz) Posted on
Categories: FinovateSpring 2026, Julie's Column, Thought Leadership

FinovateSpring wrapped up last week, and with content running Monday through Thursday, there was a lot to take in. Because I spent the majority of the time running from microphone to microphone, from stage to camera, I missed many of the key demos and presentations.

I did, however, have time for a lot of quality conversations (both on and off stage). Here are some of the insights from the event.

Lines are blurring

It is clear that the world of fintech and banking we had from 2010 to 2023 is slowly fading away. Conversations with multiple people, especially my on-stage breaking news analysis session with Jim Perry, solidified this sea change.

As an industry, we are no longer talking about banks vs. fintechs or banks partnering with fintechs. Instead, the lines are blurring between what is a bank and what is a fintech as fintechs shift to becoming infrastructure providers. Similarly, in the payments world, consumers no longer need to understand the difference between decentralized finance and traditional finance. The increased use of stablecoins with easy on and off ramps to fiat currencies removes the complexities involved in leveraging decentralized finance and makes it easy for consumers to use new tools without ever changing their habits.

Distribution channels are shifting

LLMs are slowly becoming a major distribution channel for a range of bank tools. Consumers are increasingly consulting their preferred LLM to shop for loans, life insurance, credit cards, and more. As AI agents become more prolific, the customer relationship will be one step further removed from the lender, insurance company, and credit card provider. Instead, these players risk becoming infrastructure providers operating behind the scenes while AI platforms control discovery, recommendation, and engagement.

AI progress may not be linear

We are moving very quickly toward an AI-first future and if you don’t already have a team of AI agents running tasks behind the scenes, it is easy to feel like you are behind. There are, however, a few downsides to AI that may change the trajectory of adoption.

First, banks are built to handle human risk, not AI agent risk. While banks implement access controls, require approvals, and document audit trails, this is not sufficient for AI agents, which have been known to circumvent guardrails and even blackmail users in order to accomplish their own objectives. Given these risks and systemic limitations, banks may need to slow their progress, especially when it comes to using agentic AI.

Second, scaling AI is limited. While we often talk about AI like scaling software, in reality, it is closer to building up infrastructure. The energy demand for AI tools is exploding, and compute is constrained by the construction of data centers, which can be expensive and difficult to approve and build because of regulatory and environmental constrictions.

Additionally, it is important to consider the risks that happen when decisions are made in real time. When AI models are making decisions quickly, any mistakes, manipulation, or fraud within the model will propigate at the same rate.

Finovate is still about community

Finovate isn’t the biggest fintech conference, and it never will be. That’s because we have a focus on community. Instead of attending a frenzied event where you only get five minutes with each person you meet, the Finovate networking hall creates space for deeper conversations and genuine connections.

The focus on the fintech community is intentional. It is what keeps people coming back year after year. At a time when so much of the industry is being shaped by automation and digital interactions, there is still real value in face-to-face conversations, spontaneous introductions, and the kind of discussions that continue long after a panel ends.

Some of the most valuable insights from last week came from hallway conversations, lunch meetings, dinners, and the moments in between sessions where people could speak candidly about what they are building, where they are struggling, and where they believe the industry is heading next.

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What the OCC’s 2026 Rulemaking Means for Stablecoin Issuers

What the OCC’s 2026 Rulemaking Means for Stablecoin Issuers
By Julie Muhn (@julieschicktanz) Posted on
Categories: Julie's Column, Thought Leadership

In July of 2025, the GENIUS Act, the first comprehensive federal framework for stablecoins, became law. Last week, the US Office of the Comptroller of the Currency (OCC) issued a notice of proposed rulemaking (NPRM) to implement the GENIUS Act’s requirements for payment stablecoin issuance and related activities.

While the new proposed rulemaking makes the GENIUS Act a reality instead of just a statute, it doesn’t change the intent of the GENIUS Act. It operationalizes the GENIUS Act by creating a dedicated regulatory section for issuers, establishing the licensing mechanics and timelines, forming the capital and operational requirements, and stipulating foreign issuer treatment.

2025 GENIUS Act

The 2025 GENIUS Act had a crucial role in setting the stage for the legality of stablecoin payments. It defined what a payment stablecoin is and who is allowed to issue stablecoins. It stipulated that stablecoins require full reserve backing with liquid assets, prohibited interest-bearing stablecoins, and created a federal and state regulatory structure. Overall, the purpose of the 2025 Act was to set guardrails. With this year’s notice of proposed rulemaking, the OCC is bringing a more procedure-focused approach.

New dedicated regulation

As mentioned above, the OCC is operationalizing the GENIUS Act in four major ways, the first of which creates a dedicated regulatory section (12 CFR Part 15) that establishes standards and requirements for stablecoin issuers. Creating the new part in the CFR changes the GENIUS Act from a written requirement into more enforceable supervisory standards.

New licensing

Additionally, new licensing mechanics come into play that create a defined pathway for entering the stablecoin market. Under the OCC’s proposal, prospective permitted payment stablecoin issuers (PPSIs) must submit a formal application outlining their business model, governance structure, reserve management approach, technology infrastructure, and risk controls. The proposal establishes what constitutes a “substantially complete” application and outlines supervisory review expectations. The new licensing process makes stablecoin issuance similar to applying for a bank charter, rather than launching a new product.

New capital and operational requirements

Similarly, the 2026 capital and operational requirements make stablecoin issuance look more like running a regulated financial institution than launching a new product. While the 2025 GENIUS Act focused primarily on reserve backing, the OCC’s 2026 proposal stipulates minimum capital thresholds, liquidity buffers beyond token redemption obligations, formal governance structures, internal control standards, and explicit third-party risk management expectations.

Established banks already have these processes embedded into their operating procedures. For fintechs, however, the new requirements may call for meaningful investment in governance, compliance documentation, and risk oversight infrastructure. These new formalities raise the cost of entry into the stablecoin issuance market.

New foreign issuer treatment

The OCC’s 2026 proposal incorporates foreign issuer rules directly into the scope of the plan, meaning that non-US players can no longer rely on regulatory ambiguity as a strategy to enter the market.

Just as the proposed framework requires US issuers, foreign issuers serving US users would still be required to apply for OCC registration, provide evidence of Treasury’s comparability determination, consent to US jurisdiction and OCC access to records, and meet requirements around US-available reserves (subject to any reciprocal arrangement).

This limits offshore entities operating in regulatory gray zones while marketing to US customers. The new rulemaking makes clear that global stablecoin players will need to align with US supervisory expectations, creating a more demanding roadmap for cross-border participation.

What this means for banks and fintechs

The proposed rulemaking makes clear that stablecoins are moving closer to the core of regulated banking activity and are increasingly being treated as part of the financial infrastructure rather than as a crypto experiment. As stablecoin issuance begins to resemble supervised activity, banks enter the conversation from a position of structural advantage. With governance frameworks, capital planning, risk management, and compliance processes already embedded in their operating models, traditional financial institutions may be better positioned than fintechs to comply with the regulatory demands of stablecoin issuance.

As compliance costs associated with stablecoin issuance rise, so does the barrier to entry. Not every fintech will have the appetite or resources to meet capital, liquidity, and supervisory expectations. The increased friction, however, brings institutional credibility to a payment type once considered adjacent to Bitcoin. This credibility lowers the risk for issuers as well as for end consumers and will ultimately transform stablecoins into an everyday tool.

Photo by Moose Photos

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What Do Community Bankers Want? What Do Community Banks Need?

What Do Community Bankers Want? What Do Community Banks Need?
By David Penn Posted on
Categories: Report series, Thought Leadership

What is the state of community banking in the US today? How are community banks evolving and transforming at a time of both potential opportunity and unprecedented challenge and competition?

Success stories about how community banks across the country are taking advantage of new technologies like generative AI and embedded finance will be a major part of the conversation later this year at FinovateSpring, May 5 through May 7, in San Diego.

With that in mind, today we’re taking a look at the findings from the 2025 CSBS Annual Survey of Community Banks that was unveiled at the Community Banking Research Conference last fall.

Rising competition from within and without the community

The competitive challenge from nonbanks remains a major concern for community banks throughout the US. Especially in areas such as payment services and wealth management, these fintech competitors have effectively leveraged enabling technologies like AI and embedded finance to create digital platforms able to attract customers, especially younger customers who are digitally native and have fewer ties to the traditional banking system. Nonbanks without a physical presence, for example, produced a 7% year-over-year change in competitiveness in payment services, according to the community bankers surveyed.

That said, nonbanks still trail other community banks as the biggest competition in seven out of nine product and service categories. Community banks identified local regional banks as their main competitors in payment services and nonbanks as their primary rivals in wealth management and retirement services.

The battle over deposits continues to be a significant challenge for most banks and financial institutions, and community banks are no different. While transaction deposit levels have stabilized in recent years, competition from nonbank institutions has grown, especially among those nonbanks that are out-of-market. This has compelled community bankers to adjust their pricing strategies based on local market rates; the survey noted that the number of community bankers that said that they “always” responded to rate changes increased by more than 38% to represent a quarter of all survey participants.

Fraud and financial crime remain paramount concerns

In terms of internal risks, community bankers cited cybercrime as a top issue by far all others. Both credit and debit card fraud are the most common types of fraud reported in terms of dollar losses, with check fraud, identity theft, and account takeover also among the chief challenges. The survey noted that these financial crimes—card fraud, check fraud, and identity theft with account takeover—represent the lion’s share of both total fraud cases and dollar losses.

To this point, the community bankers surveyed indicated that they were putting resources to work combatting fraud and financial crime. After safety and soundness practices, money laundering and consumer protection standards maintenance accounted for the second and third largest commitments of total compliance expenses.

“We continue to put more resources into cybersecurity and technology risk,” one respondent noted, “which has grown rapidly as part of our cost structure. We’ve invested heavily in systems and processes and added staff to review outputs to protect customers and prevent fraud. Fraud is not yet a large loss item for us, but it could be.”

E-signatures and remote deposit over AI and BaaS

For all the talk of AI and stablecoins, the technologies that are moving the needle for many community banks are more pedestrian and practical than one might imagine. Technologies viewed as “extremely” or “very” important included such solutions as e-signature, remote deposit capture (RDC), and integrated loan processing systems. At the bottom of the list of priorities? Interactive teller machines (ITMs) and fintech partnerships for Banking-as-Service were deemed “not at all important” by more than 50% and nearly 40% of respondents, respectively.

Asked to look forward over the next five years, the responses from the community bankers are similarly grounded. The top response by far, with more than 75% of respondents in agreement, was that the expansion of mobile banking services will be the most promising opportunity for their bank in the next half decade. Fully integrated loan processing systems came in second at just over 61% with cloud-based core systems at more than 53%. AI? As a tool for enhancing customer interactions, AI technology earned less than half the number of respondents. Partnerships with fintechs? For digital transformation, about a third. For BaaS, about a fifth.

What do community bankers want from fintechs?

The 2025 CSBS Annual Survey is a rich source of information and insight into the thinking of community bankers in the US right now. For fintechs looking to work with these institutions, either as partners or vendors, the survey offers a number of takeaways that can help make those connections fruitful for both fintechs and community banks.

Boosting deposit growth—Fintechs can support community banks in boosting deposit growth by offering tools such as personalized savings plans and competitive interest rate management solutions. Enhanced customer engagement platforms that heavily incentivize deposit loyalty can also be valuable. Fintechs can also provide community banks with analytics to help them identify and respond to deposit trends.

Scalable loan management technology—Making the process of loan origination, underwriting, and servicing easier for community banks is key to helping them win against competition in key financing areas such as small business, agriculture, and commercial real estate. This is also where AI-powered solutions can have a dramatically positive impact. Streamlining processes, improving applicant review, and enhancing the customer experience in lending overall are areas where fintechs have a significant track record of success and can greatly benefit community banks.

Operational efficiency and compliance—It is true for most businesses and community banks are no exception. Enabling technologies are making manual tasks increasingly unnecessary, as automation and agentic AI transform legacy workflows into smooth operational processes free of human error. These technologies are also making it easier for institutions—including community banks—to be more aware of their regulatory responsibilities and to be better able to act quickly and completely to ensure compliance. Fintechs specializing in compliance management tools and services can be key allies for community banks at a time of significant regulatory change and uncertainty.

Photo by Hannah Busing on Unsplash

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