How 23 people changed banking this year

December 28, 2023 4:12 PM

Now that the year is coming to a close, we're checking back on our list of 23 people who we predicted would change banking in 2023. Here's an update on how each of them fared this year — some well, and some not so well.

To see who we think will change banking in 2024, see our latest list.

Beverly Anderson

CEO, Boeing Employees Credit Union

Named CEO of Boeing Employees Credit Union in December 2022, Beverly Anderson ranked #3 on our list of the Most Powerful Women in Credit Unions for 2023. A former executive at Equifax, First USA, Fleet, American Express and Wells Fargo, Anderson took over Tukwila, Washington-based BECU just as the credit union was recovering from a data breach, one of 2022's largest among banks and credit unions, that exposed data on 340,000 customers. She said she would get right on updating the credit union's technology and partnerships. Like many credit union leaders, Anderson saw the banking crisis of spring 2023 as only incidental to her membership-based business model. "Our foundational approach to business and financial management has not changed as a result of the banking crisis," Anderson told American Banker at the time. "BECU's business model is largely consumer-based and well-diversified."

Sam Bankman-Fried

Former CEO, FTX

Bankman-Fried Released on $250 Million Bond in FTX Fraud Case

Stephanie Keith/Bloomberg

When last we left Sam Bankman-Fried, he had been indicted for fraud after his crypto exchange, FTX, imploded into bankruptcy at the end of 2022. At his trial, the prosecution portrayed him as a mastermind who deliberately stole customers' money, and they successfully won a conviction. Bankman-Fried is scheduled to be sentenced in March 2024 and faces more than 100 years in prison. Was he always a fraudster, or just a hapless businessman who didn't know enough to protect customer accounts? It's a question being posed by industry watchers, including author Michael Lewis, who followed Bankman-Fried for months before his arrest and whose book on the FTX drama came out this fall. Meanwhile, with crypto regulation still stalled in Washington, banks are wondering if it's safe to touch crypto at all. A new Congress might pick up this dropped ball, or it could take regulators' advice and leave it alone.

Michael Barr

Vice Chair for Supervision, Federal Reserve

Al Drago/Bloomberg

Michael Barr lived up to our prediction from a year ago: He did indeed change banking in 2023. In March, he helped lead the government's response to the banking crisis, stabilizing the sector and preventing further contagion as Silicon Valley Bank and Signature Bank failed, followed soon after by First Republic Bank. In the fallout from those bank failures, Barr has been vocal about new regulations and strict supervision he feels the banking sector needs, for instance to require greater liquidity that could prevent high-speed bank runs. Also on tap for Barr and his Fed colleagues this year was the launch of FedNow, which brought a public instant-payments option to banks. He also spent the year advocating for revised capital rules for banks under the Basel III framework, against which the industry is fighting furiously. That fight will come to a head in 2024 against the backdrop of the presidential election and the prospect that a new administration will have different regulatory priorities.

Greg Becker

Former President and CEO of SVB Financial

Sarah Silbiger/Bloomberg

Silicon Valley Bank's future was in doubt by the end of last year. Now the verdict is in: The tech-focused bank failed spectacularly in March, sparking a banking crisis that spread fears of industrywide chaos. Ultimately, only five banks failed in 2023, and two of them were small institutions that failed for what could be considered normal and nonsystemic reasons. SVB itself became part of First Citizens. But Silicon Valley Bank's demise kicked off a period of intense scrutiny for the industry and especially for regional and midsize institutions. This has led to plans for increased regulatory supervision and more rules. In addition, the largest banks in the country will now pay the FDIC higher rates for deposit insurance. For fintechs and neobanks, the aftermath was often positive, however, as they acquired new customers fleeing from banks considered shaky.

For Becker, who resigned as part of SVB's government-managed resolution, the fallout included a May appearance before a Senate committee, where he was grilled about risks the bank took under his leadership. His legacy is likely to be regulators' and bank executives' increased focus on the impact of interest rates on banks' balance sheets.

Jeffrey Brown

CEO of Ally Financial

Ally CEO Jeffrey Brown was named American Banker's Banker of the Year for 2022 — but he won't last for much of 2024. Brown, who spearheaded Ally's transition from an auto lender affiliated with General Motors to an online bank with a retail customer base, is leaving to become CEO of an auto dealership group that is a longtime client of Ally. The move comes as the auto lending market is becoming tougher for banks. Shortly after Brown said he was leaving the bank, his veteran deputy, Diane Morais, a Most Powerful Women in Banking honoree and the president of Ally's consumer and commercial banking units, also said she would depart.

Rohit Chopra

Director, Consumer Financial Protection Bureau

Ting Shen/Bloomberg

This fall, the CFPB's funding mechanism went before the Supreme Court, which will rule in 2024 on whether the bureau is unconstitutional — an outcome that could mean the end of the agency, especially if a Republican administration comes to power. Chopra started off the year filing fewer enforcement actions than his predecessors, both Democratic and Republican, with just five actions in the first half. But he isn't slowing down: A $60 million enforcement action against Toyota Motor Credit in November was just one of the CFPB's projects. Chopra's "junk fees" campaign picked up speed this year, building on the post-pandemic fight against bank overdraft fees. One target: credit card late payment fees, which he proposed setting at $8. Look for Chopra to continue his fight for the regulation of AI in financial services, for new rules on data sharing and for meat-and-potatoes enforcement. Banks, payment companies and even big tech firms will continue to look over their shoulders at the CFPB.

Jamie Dimon

Chairman and CEO, JPMorgan Chase

Andrew Harrer

Considered the dean of bank CEOs, Jamie Dimon often speaks for them after two decades atop the country's biggest bank. Dimon is known for his strong opinions, such as his long-held view that crypto is a scam that the government should shut down. He was recently rated the bank CEO for whom bankers would most like to work. This year saw Dimon continue in his leadership role for the industry; JPMorgan Chase took over failed First Republic Bank from the FDIC in a rushed but carefully managed resolution. JPMorgan has long touted its relationships with half of American households; this fall, the bank was approaching a new milestone of $4 trillion of assets — that's trillion with a T. Dimon's run will likely continue into 2024; he's said he isn't ready to retire.

Jack Dorsey

CEO, Square

Drew Angerer/Getty

Square founder Jack Dorsey stepped further into the headlines this year when Alyssa Henry, the executive who had run the Square merchant-services unit for nearly a decade, left the company. Dorsey, who runs the parent company, Block, took over her role. Block continues to make waves in payments, with its moves into buy now/pay later with Afterpay as well as its quest to build a financial super app. Another contender trying to compete in that arena is Elon Musk, who bought Twitter, the other tech giant Dorsey founded, renamed it X and is attempting to reinvigorate the social network with a payments angle. Dorsey's Block already has its Cash App, but it has a long way to go before it becomes ubiquitous.

Misha Esipov

CEO, Nova Credit

In a year when migration came to the fore globally, as a result of war in Ukraine, climate change and economic dislocation around the world, there are increasing numbers of people moving across national borders and reestablishing their lives. That requires credit, the problem Nova Credit was founded to solve. How do you show your credit history if it doesn't travel with you as you move between countries? This year, Esipov made good on his plans to launch internationally, announcing a new U.K. initiative. We named him one of the Innovators of the Year, citing his Cash Atlas product, which allows consumers to show their bank accounts to potential lenders, using their payment history to bolster their loan applications. Immigration continues to be a hot-button issue around the world, so the need for Nova Credit isn't likely to go away.

Richard Fairbank

Chairman and CEO, Capital One

For financially stressed consumers, it's been a difficult year. Credit card balances across the industry hit $1 trillion, a dubious milestone that points to the growing indebtedness of the public. Capital One is one of many banks that are seeing growing delinquencies as credit card customers, in particular millennials who may not have benefited from pandemic-era low mortgage rates, are now facing higher rent and inflation. In the third quarter, the 30 days' past due delinquency rate rose to 4.31%, up 134 basis points from the previous year's third quarter, Fairbank said on the company's third-quarter earnings call. But Fairbank has said he feels the consumer economy is stabilizing. The bank has spent years investing in technology, and this summer it laid off 1,100 workers in its tech operations because software has taken over their jobs and made the company more efficient. With analysts still concerned about the resilience of commercial real estate loans, banks are looking to consumers as one bright spot — but 2024 could be a year when credit cards cause problems for banks.

Jane Fraser

CEO, Citigroup

In 2023, Fraser retained her spot atop our Most Powerful Women in Banking list; she continues to be the only female CEO of a top-50 bank by assets. But like her male predecessors at Citi, Fraser faces challenges with making the giant global bank function smoothly. This year she announced a massive restructuring effort, eliminating layers of management, laying off thousands of employees and jettisoning units like the municipal finance business where Citi was long a strong competitor. That comes on top of the pressures facing all banks, including continued regulatory fallout from the spring's banking crisis, economic uncertainty, inflation and higher interest rates. But there's evidence that consumers' wobbly finances are getting stronger, which is good news for Citi and other banks heavily involved with credit cards. If Fraser's restructuring can make the bank more profitable, she'll have pulled off a major feat that none of Citi's previous CEOs have managed in the past two decades.

Gary Gensler

Chair, Securities and Exchange Commission

Al Drago/Bloomberg

2023 was supposed to be the year of crypto regulation, after the spectacular fall of crypto exchange FTX at the end of the previous year. That didn't happen — although FTX founder Sam Bankman-Fried did get convicted of fraud for the exchange's implosion — leaving the push for regulation to run another year. The SEC has pursued crypto exchanges in the U.S., including Coinbase, a campaign critics say will push the crypto industry into less-regulated overseas markets.

It's likely to be difficult to get regulation enacted in a presidential election year. The challenge for Gensler, who has pushed for his commission to take a leading role in regulating crypto coins as securities, is that no one agrees on what kind of a financial product crypto is: commodity, property or security?

At issue for banks is to what extent they are allowed to touch crypto at all, either custodying coins for clients, trading it or using it for their own purposes. Gensler has linked the 2023 bank failures with the collapsed banks' connection to crypto. Whatever rules get enacted or laws get passed involving crypto this year, it's likely that Gensler and the SEC will be at the center. He's also taken a position that AI can be dangerous to the financial system and needs to be regulated closely — another hot-button issue that could put him and the banking industry at odds.

Martin Gruenberg

Chairman, Federal Deposit Insurance Corp.

Sarah Silbiger/Bloomberg

It's been a busy year for the FDIC's chairman — and not all in a good way. Gruenberg took a leading role in the spring banking crisis, since the FDIC oversees the Deposit Insurance Fund that guarantees depositors' accounts. In the aftermath of the crisis, Gruenberg worked with other regulators to explain to Congress and the public what had happened and how bank supervision needed to change. He was also heavily involved in the new Community Reinvestment Act rules that came out this fall, as well as the Basel III endgame regulations, aganst which banks are fighting hard.

The biggest problem for Gruenberg came in November, when a Wall Street Journal investigation described a culture of sexual harassment throughout the FDIC. Republican lawmakers called for Gruenberg's resignation, arguing that as the agency's leader during this period, he was unfit to manage the culture change that was needed. Gruenberg remains at the helm, but the expose damaged his standing.

Frank Holding

Chairman and CEO, First Citizens Bank

Frank Holding had a quiet first quarter — until mid-March. That's when Silicon Valley Bank failed in a spectacular collapse. Holding's First Citizens bought large chunks of the bank from the FDIC. Winding down and disposing of the bank cost the Deposit Insurance Fund $16.1 billion. Since acquiring the failed bank, First Citizens has moved to win back the startup clients that were a large part of Silicon Valley Bank's business. The regional bank also presented a $6.5 billion community plan to go along with the acquisition. And the bank continued to digest its 2022 acquisition of CIT Group, extending the First Citizens brand to much of the business. Overall, it was a good year for the bank, which reported strong third-quarter earnings.

Patrick McHenry

Chairman, House Financial Services Committee

Andrew Harrer/Bloomberg

After two decades in Congress, North Carolina Rep. McHenry announced this fall that he won't run again in 2024. He's been working on a stablecoin bill with his Democratic counterpart on the House Financial Services Committee, ranking member Maxine Waters of California, and will now have until the end of this Congress to push the legislation through.

The legislator was especially busy in March and April, when the federal government decided to backstop every depositor of banks that failed during the banking crisis, whether or not their accounts were below the FDIC insurance limit. In the summer, McHenry took aim at Fincen's new rules on sharing information about companies' beneficial ownership, echoing banks' complaints. McHenry also made news this fall when he and fellow House Republican leaders took a starring role in investigating the FDIC after reported allegations of sexual harassment at the agency.

McHenry, who led the House for a short period of time during Republicans' leadership crisis earlier this year, hasn't said what he'll do once he leaves office.

Ken Montgomery

First Vice President and Chief Operating Officer, Federal Reserve Bank of Boston

FedNow was in the works for many years — and in 2023, it was now.

Montgomery, who has spent four decades in various Fed roles across the central bank's system, was the program executive in charge of the instant payments network's design and rollout. FedNow was conceived as the government's answer to the RTP network, which is run by The Clearing House, a bank consortium. In announcing the program's launch date this summer, Montgomery cautioned that it would take months and even years for FedNow to reach its full potential as banks adopted it.

In its first few months, FedNow has drawn limited praise and is starting to affect the market. At credit unions that are adopting the system, executives say it's a differentiator for customers. The system's rapid transfers have also spurred questions about how FedNow will play into bank regulation, especially after the spring's banking crisis, which led to billions of dollars digitally fleeing failing banks within hours.

Hailed as an important step in modernizing the U.S. payments infrastructure that banks and businesses use, FedNow could speed up how we move money. After years of work, Montgomery's project now has to show its worth in the marketplace.

Anthony Noto

CEO, SoFi

David Paul Morris/Bloomberg

For SoFi, best known as a student-loan-refinancing fintech, the moratorium on student-loan payments that followed the pandemic was a problem. In January, the company, one of the few fintechs to have both a bank charter and its own core software provider, joined peers in laying off employees as it struggled with the pause in revenue from student-loan borrowers who stopped making their payments. The fintech even sued the U.S. Department of Education to force the government into ending the moratorium. But Noto said that SoFi had no plans to leave the student-loan market, even though higher interest rates were making it challenging for refinancings of all kinds. The payments resumed in the fall, and by the third quarter, the company was reporting growth again. (SoFi also offers student-loan repayment help to employees as a benefit.) This was also an acquisitive year for Noto in other business lines: In the spring, SoFi bought Wyndham Capital Mortgage, a fintech lender, in a bid to expand its platform.

As the economy normalizes after the pandemic, SoFi still must contend with interest rates that are no longer at zero. How student-loan borrowers feel about their economic prospects this year will affect whether they want to refinance their loans — which could be important for SoFi.

Zach Perret

CEO, Plaid

George Frey/Bloomberg

Because Plaid sits at the intersection of fintechs and banks, Perret's company has come to play an increasingly large role as more companies seek to move financial information back and forth. The San Francisco-based company's data shows that "about 80% of consumers are engaged in digital finance and about 50% on a daily basis are engaging with some sort of financial tool," Aly Yarris, who heads financial access at Plaid, said at American Banker's Digital Banking conference in June. The dark side of greater integration is the prospect of fraud, which is an entrenched problem for banks and credit unions. This summer, Plaid tried to help by strong-arming its partners into working together on a database of stolen identities.

Looming over all else is the CFPB's plan to issue a new rule in 2024 governing open banking, with the goal of having consumers take control of their own financial data. This poses both opportunities and challenges for Plaid in the new year.

Bill Rogers

Chairman and CEO, Truist Financial

Al Drago/Bloomberg

Truist spent 2023 continuing to digest and integrate the units that created the bank in a merger of BB&T and SunTrust Banks. Getting customers to be happy about the changes has been hard. In an annual JD Power survey, Truist came in last of 9 big banks in customer satisfaction, although its score rose over last year.

This year, Rogers became one of several bank CEOs who sold off part or all of an insurance unit, an increasingly popular trend, as Truist grappled with an underwater bond portfolio.

The bank continues to face criticism from investors and analysts who say Truist isn't doing enough to realize the cost synergies the merger promised. To ramp up the bank's transformation, Rogers expanded his leadership team this fall, hiring executives from rivals. He also announced a $750 million restructuring plan. Whether he can squeeze Truist into the smaller but more efficient shape that shareholders think it should take is a challenge for 2024.

Dan Schulman

CEO, PayPal

Louis Lanzano/Bloomberg

Schulman kicked off the year by announcing he would step down from PayPal. After eight years as CEO, he said he would retire and hire a successor. In August, the company named Alex Chriss, an Intuit executive, as the next CEO.

The legacy of Schulman, who helped maneuver PayPal out of Ebay, sustained a blow in December when Amazon said it would no longer integrate with PayPal's Venmo app, a tie-up Schulman had spearheaded. PayPal's stablecoin efforts also came under regulatory fire this year when the SEC subpoenaed the company, which said it would cooperate with the probe.

Schulman had said he would leave the company's board at the May 2024 shareholder meeting, but then announced this fall that he would step down by the end of 2023, allowing Chriss to take over leadership fully. On the company's third quarter earnings call, Chriss said he'll refine PayPal's strategy: "The company's focus has not been clear."

Sebastian Siemiatkowski

CEO, Klarna

Johan Jeppsson/Bloomberg

At Swedish buy now/pay later fintech Klarna, 2022 ended unhappily. The company lost about $1 billion for the year amid economic uncertainty and the question of whether buy now/pay later would have a future.

But in 2023, the future is already here. In the fourth quarter, Klarna returned to profitability after having lost money for several years. Amid questions about how AI will affect the financial services and payments industries, half of the company's employees already are using generative AI from Microsoft-backed OpenAI for customer service and shopping recommendations.

Not all is rosy. Klarna's Swedish employees are in a labor fight with the company that could lead to unionization both in its home market and potentially abroad as well. Consumer advocates also point at what they say are unfair barriers to arbitration for customers who have problems with the company.

A Fed report this fall pointed to a role for buy now/pay later loans in expanding financial inclusion for borrowers who may not qualify for traditional credit. But skeptics still abound, and it remains to be seen how buy now/pay later loans will change in the coming year.

Nikolay Storonsky

CEO, Revolut

Luke MacGregor/Bloomberg

It can be challenging to be a challenger bank. In 2023, U.K.-based Revolut hit 840,000 U.S. users and launched a redesigned app, part of its strategy to offer a "super app" that does everything for customers' finances. That's the good news for the company, which offers cross-border payments, savings and investing to people in a variety of countries, especially those who immigrate or move around frequently. The bad news is that Storonsky's company has yet to get a charter to operate as a bank in the U.S., a credential it hoped to win back in 2021, even as it's run into some issues in other countries. Revolut announced in December that it would temporarily halt crypto purchases for its U.K. clients as it worked to comply with new British regulations on crypto. The company also said that in the last two years it had doubled its number of employees involved in fighting financial crimes and fraud to more than 2,500 workers, as the amount of digital fraud swells around the world.

Sandra Thompson

Director, Federal Housing Finance Agency

Ting Shen/Bloomberg

When banks began failing in March 2023, the Federal Home Loan banks suddenly burst into the news. It started with Silvergate Bank, a crypto-linked bank that borrowed $4.3 billion from the San Francisco Home Loan Bank before suddenly entering a voluntary liquidation. As it happened, the Federal Home Loan bank network — originally a set of banks designed during the Great Depression to backstop the American dream of homeownership — had advanced $30 billion into the banking system before the banking crisis was over, a report by the inspector general of the system's regulator, Thompson's Federal Housing Finance Agency, found in September. The FHFA asked for public comment and then issued its own report in November, in which the regulator laid out its reasons for wanting to reorient the Federal Home Loan banks away from their current role as a lender of last resort and back to fulfilling their original purpose in the housing market. Thompson has stated that taxpayers are stakeholders in the Federal Home Loan banks — an obvious point, but one she had to make given the uproar about the system's operations.