10 bank and fintech executives to watch in 2022

January 2, 2022 9:00 PM

When American Banker’s editors huddled to assemble a slide show of executives to watch this year, one major theme emerged: crypto.

Four of the 10 people who landed on the list lead companies that are placing big bets on cryptocurrency, underscoring the fact that digital currencies have rapidly become a central part of the financial system.

They include Jack Dorsey of Twitter and Square fame; Brad Garlinghouse, the CEO of Ripple Labs, which is locked in a high-stakes legal fight with the Securities and Exchange Commission; and a recently elevated cryptocurrency and fintech leader at the company formerly known as Facebook.

Also in the spotlight is Citigroup CEO Jane Fraser, who’s leading the New York megabank through a restructuring; TD Bank Group CEO Bharat Masrani, a key player in bank M&A landscape; and Omer Ismail, who left Goldman Sachs last year to head a Walmart-backed fintech venture.

The full list, featuring executives whose companies are at inflection points or emblematic of industrywide trends, follows.

Key Speakers at The Singapore FinTech Festival

Brad Garlinghouse, Ripple Labs

The cryptocurrency industry has many controversial figures, but Brad Garlinghouse would make anyone’s top 20.

He didn’t invent XRP, the digital asset created by the founders of his company, Ripple Labs, which the Securities and Exchange Commission calls an unregistered security.

But according to an SEC lawsuit, Garlinghouse has profited from the sale of XRP he obtained as Ripple’s CEO. He’s sold at least 321 million XRP, making $150 million, according to the agency. Ripple has collected at least $1.38 billion from sales of XRP that it holds in escrow, the SEC said.

At one time, several U.S. banks were interested in using Ripple’s software for cross-border payments. The idea was to execute faster, cheaper payments by pushing digital currency across a blockchain rather than relying on correspondent banking relationships and the Swift network. Today, no U.S. banks will confirm they are working with the company.

Yet Ripple is still valued at $10 billion. XRP is the eighth-largest cryptocurrency by market capitalization. Garlinghouse has said that he believes his company is making “good progress” in its court battle with the SEC.

If the courts determine that XRP is a digital currency and not a security, the value of XRP would likely rise, and Ripple could potentially win back hearts and minds in the U.S. financial community. But for now, a host of competitors that use stablecoins rather than Ripple’s digital asset as a funding mechanism are gaining ground.

— Penny Crosman

Joseph DePaolo, Signature Bank

Signature Bank has embraced cryptocurrency more quickly than most U.S. banks. Whether that eagerness will be an asset or a liability remains to be seen.

Led by CEO Joseph DePaolo, the New York-based bank has begun offering loans backed by digital assets like Bitcoin to select clients, writing its first such loan in the third quarter of 2021.

Signature, which

vaulted past $100 billion in assets

last year, has also seen a spike in growth in deposits for certain clients involved in cryptocurrency. The company holds about $23 billion in reserves for clients such as exchanges, miners and traders, DePaolo told analysts in October.

At the same time, Signature is enjoying growth in other crypto businesses that it launched ahead of competitors. Its blockchain-based payments system, Signet, was launched in 2019. The company began offering stablecoins on the platform last year.

The outcome of Signature’s early bet on crypto hinges partly on decisions that regulators have yet to make. Federal officials are expected to devote more attention to the crypto market in 2022.

Other regional banks have been eyeing the crypto space, but with

more reservations

than Signature.

DePaolo said in October that Signature’s crypto clients are eager for Washington to write new rules.

“Our stablecoin clients have actually welcomed the regulation because they are in a position that regulation will actually eliminate a number of competitors,” DePaolo said. “They're ready and willing and able to move under new regulatory guidance.”

— Jon Prior

Jack Dorsey, Block

After stepping down as Twitter’s CEO in November, Jack Dorsey should have more time to focus on the fast-expanding array of financial products and services at Block, where he still serves as chief executive.

Block, formerly known as Square, got its start in payment processing, and its recognizable card readers continue to use the Square brand. But cryptocurrency trading now

accounts for nearly three-quarters of the firm’s revenue

. Cash App, which competes with PayPal’s Venmo, has 40 million users who access the app monthly.

The San Francisco company’s banking arm, Square Financial Services,

began offering

FDIC-insured accounts and small-business loans last year.

And in August, Block

agreed to pay $29 billion to buy

the Australian installment lender Afterpay. The deal should give Block, which was co-founded by Dorsey in 2009, a large foothold in the booming buy now/pay later market.

At the same time, Block continues to focus heavily on crypto. Its TBD cryptocurrency project is working on a

protocol

to exchange digital assets, which could attract a larger market for cryptocurrencies.

“We see Bitcoin as the internet’s potential to have a native currency,” Dorsey said during an earnings call last May, “and we want to further that as much as we can.”

— Jon Prior

Stephane Kasriel, Meta

The financial services initiatives at Meta are a source of almost nonstop controversy, and the company formerly known as Facebook is entering 2022 with a new leader for those high-profile efforts.

Stephane Kasriel, who has recently served as product head for the company’s Novi wallet, is taking on a larger role as former blockchain chief

David Marcus leaves Meta

.

Kasriel will absorb at least some of the public scrutiny for Novi, a financial services app that's expected to support transactions involving the highly anticipated Diem stablecoin. Facebook announced the Diem project as Libra in 2019, and though Diem has since taken steps to distance itself from the social media giant, Meta is still among its partners.

While Diem has not yet launched, Novi’s availability is expanding. Meta’s

began tests of the wallet in December.

A group of Democratic senators has already called for the Novi testing

to be halted

, arguing that Facebook's privacy issues create consumer-related risks for payments businesses. The conflict will likely intensify as Novi moves deeper into financial services.

"The wallet is in pilot as we speak, so larger deployment can be expected as the bugs get resolved," said Tim Sloane, vice president of payments innovation at Mercator Advisory Group.

While Diem has been

scaled back

several times in response to regulatory concerns, the stablecoin will still have billions of potential users and ties to both Novi and other Meta products. Put it all together, and it

could serve as the base

for a financial super app at Meta.

— John Adams

Omer Ismail, Walmart-backed venture

It’s been a long time since Walmart was a bête noire for the banking industry.

But nearly 15 years after the retail giant ended its bid for an industrial loan company charter, Walmart is again poised to ruffle banks’ feathers.

Omer Ismail, a former head of Goldman Sachs’ consumer business, is leading a new financial services venture that has the backing of Walmart and the venture-capital firm Ribbit Capital. He’s joined by David Stark, who previously led Goldman’s credit card collaboration with Apple.

The fledgling venture does not have a publicly announced name, but the Bentonville, Arkansas-based retailer

has applied for a trademark

for the moniker Hazel by Walmart.

Ismail was a central player in the development of Goldman’s consumer business, known as Marcus, which has been built partly through the purchase of fintechs, and he could run a similar playbook at his new company.

The Walmart-backed venture does not plan to seek a banking license, The Wall Street Journal

reported

this fall.

But analysts at Citigroup

wrote

in June that the firm wouldn’t need its own charter to become a threat to banks, citing advantages tied to Walmart’s vast customer base and its sprawling network of stores. The Citi analysts also envisioned the possibility that the new venture will build a super app, offering banking, payments and shopping in a single app.

“There’s so many digital products that we can go build,” Walmart CEO Doug McMillon said at a conference in September. “I think there’s more to come … .”

— Kevin Wack

Stephanie Cohen, Goldman Sachs

The consumer division at Goldman Sachs was hit by a wave of departures in 2021, and Cohen is responsible for helping the unit regroup.

Omer Ismail and David Stark

left

to join the aforementioned Walmart-backed fintech venture. Sonali Divilek, the former head of product for Goldman’s consumer banking group, known as Marcus, departed for JPMorgan Chase. She was joined by the division’s former chief financial officer.

But Goldman has been reloading. The company’s recent hires include former Uber and Amazon executive Peeyush Nahar, Stripe alum Swati Bhatia and Brian King, a former Goldman executive who rejoined the company after a brief stint at Wells Fargo.

Goldman has also been making moves on the product front,

launching

a robo advisor and

announcing

a $2.24 billion deal to buy the point-of-sale loan provider GreenSky. The latter move will bring GreenSky’s customers under Goldman’s umbrella, and it will fuel Goldman’s banking-as-a-service strategy by allowing the bank to tap into GreenSky’s more than 10,000 merchants.

Last May, Cohen

told

American Banker that Goldman’s consumer banking unit, launched in 2016, had gotten to a place where its talented executive ranks were drawing outside attention.

“And so the fact that some of our people leave to do fantastic things,” said Cohen, Goldman’s global co-head of consumer banking and wealth management, “we think is a normal evolution.”

— Polo Rocha

Jane Fraser, Citigroup

Jane Fraser got plenty of attention in 2021, and she figures to be in the spotlight again this year.

Last March, Fraser became the first woman to lead a major U.S. bank. During her first year as Citigroup’s CEO, she rolled out a restructuring plan that aims to chop lagging businesses and invest in areas where the $2.4 trillion-asset company can achieve greater scale.

Citi created a

single global wealth division

and four overseas wealth hubs, and it

made plans to sell

13 overseas retail franchises that aren’t large enough to compete effectively. So far, the New York bank has found buyers for its franchises in Australia and the Philippines, and decided to wind down, rather than sell, its operations in South Korea. It is in talks with bidders for the remaining 10 overseas franchises.

Fraser, who was American Banker’s

Most Powerful Woman in Banking

last year, also led Citi through the start of a multiyear effort to modernize its risk management and internal control systems, which are

under scrutiny

by federal regulators.

Those initiatives will be closely monitored in 2022 as Citi faces ongoing pressure to narrow the gap between its returns to shareholders and those of other big banks.

Fraser is scheduled to lay out her vision of a new Citi during a March 2 investor day.

— Allissa Kline

Bharat Masrani, TD Bank Group

Whether the bank M&A wave of 2021 continues this year will be determined by executives like Bharat Masrani.

Last year, deals

totaled

more than $68 billion, outpacing all of 2019, when combined bank acquisitions reached $55.0 billion, and 2020, when they totaled $27.8 billion, according to S&P Global.

TD Bank Group, the parent company of Canada’s second- largest bank, sat on the sidelines, though not for lack of interest. Masrani, the Toronto company’s CEO,

has repeatedly expressed

a willingness to engage in M&A — should the right opportunity present itself.

The recent M&A wave has been driven partly by the need to achieve scale, and that trend is not expected to abate in 2022. But greater scrutiny from Biden administration regulators could serve as a headwind.

TD Bank built its U.S. franchise through large acquisitions, but it hasn’t made a deal since 2010, when it bought South Financial Group in Greenville, South Carolina.

TD was in a very different place at that time, Masrani said at an industry conference in September. Back in 2010, the Canadian company’s U.S presence was largely concentrated in New England, and it needed to build scale.

Today, TD has more than 1,100 branches from Maine to Florida. Though it has the capital to engage in dealmaking, Masrani has signaled that TD will be selective about any potential acquisitions.

“If there is a way that M&A might accelerate our growth aspirations, of course we should look at it seriously,” he said at the Scotiabank Financials Conference.

— Laura Alix

Thomas Cangemi, New York Community Bancorp

Thomas Cangemi made several big moves in his first year as CEO — lining up an

acquisition

, hiring a chief digital banking officer and

partnering

with a fintech company.

Expect the transition to continue in 2022 as Cangemi aims to diversify New York Community’s commercial lending portfolio, collect cheaper deposits and build out more robust digital banking capabilities.

What’s on deck? For starters, the anticipated closing of New York Community’s acquisition of Flagstar Bancorp in Troy, Michigan. When the $2.6 billion deal was

announced

in April, it was expected to close by the end of the year, but Cangemi reset expectations in October, projecting that the deal

would be completed in 2022

.

Assuming the acquisition closes, Long Island-based New York Community will be in position to capture more loans, deposits and fee income by tapping into Flagstar’s legacy businesses, cross-selling products and remixing its funding base.

Since changing CEOs in late 2020, New York Community has also entered into a partnership with — and made an investment in — San Francisco-based Figure Technologies. The two companies plan to work together on blockchain-related initiatives, particularly in the mortgage realm, where Flagstar specializes.

Cangemi has also said that the Figure partnership should lead to more growth opportunities as New York Community evolves from a thrift institution into a full-service commercial bank.

“There’s a lot happening,” he told analysts in October. “Stay tuned.”

— Allissa Kline

Jeff Disterhoft, GreenState Credit Union

No credit union struck more deals to buy community banks last year than GreenState Credit Union in North Liberty, Iowa.

The $8 billion-asset organization announced three bank acquisitions in 2021,

most recently

making a deal for the $411 million-asset Midwest Community Bank in Freeport, Illinois.

GreenState’s purchases accounted for a quarter of the 12 credit union purchases of banks last year — up from a total of seven in 2020 — and its activity level this year could be a bellwether of the larger trend.

In an interview, GreenState President and CEO Jeff Disterhoft indicated that the Iowa credit union has limited appetite for bank purchases in 2022.

“While we’ll remain open to opportunities in the market, the institutions already in progress will be more than enough to keep us busy for 2022,” he said. “That being said, we’ll continue conversations with potential credit union merger partners as well.”

Disterhoft said that the total number of credit union purchases of banks is unlikely to increase dramatically in 2022. He cited several factors, including banking industry pushback to the deals and the relative health of both industries, cautioning that loan quality may take a few steps back next year.

If loan quality at banks deteriorates considerably, it could factor into which banks become available, Disterhoft said.

Still, he said, the community banking industry remains very healthy as a whole. “We still come across a handful of viable candidates each month, so it seems there are interested sellers in the marketplace,” Disterhoft said.

— Ken McCarthy