Among the top news of January is the Federal Deposit Insurance Corp.'s impending Synapse Rule, Regions Bank's play for an open banking future, the cybersecurity impact of the Treasury Department's recent breach and more.
Capital One's five-day outage highlights third-party risk
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Earlier this month, disruptions to financial transfers plagued dozens of banks, including Capital One, in an episode that highlighted the issues of technical resilience and third-party risks, two matters that regulators have given special attention in recent years.
Capital One and 26 other banks experienced outages starting Jan. 15 that caused some deposits, payments and transfers to be delayed. Financial services vendor Fidelity Information Services, better known as FIS, said Jan. 20 that a power outage initiated the disruption.
FIS provides banking operations and payments services to more than 5,800 companies and processed $12 trillion in 2023. A spokesperson for the fintech said the outage was "due to a local area power loss and a hardware failure" that occurred on Jan. 15.
How Fiserv's new CEO shakes up succession at two firms
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Fiserv has appointed PNC executive Michael Lyons to assume outgoing CEO Frank Bisignano's role, bringing a longtime bank executive into the world of technology sales, and leaving an empty seat on the Pittsburgh-based financial institution's talent bench.
Lyons became president and CEO-elect of Fiserv, effective Jan. 27. He reports to Bisignano until June 30, or upon Bisignano's earlier Senate confirmation as commissioner of the Social Security Administration for the Trump administration. The move changes succession planning for PNC, which had viewed Lyons as a top candidate to eventually succeed CEO William Demchak.
What banks can learn from the Treasury breach
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Many aspects of the cybersecurity breach the
To these add two more: the hackers lurked inside the Treasury's computers undetected, in what's called an advanced persistent threat. And U.S. banks are susceptible to this same kind of attack.
American Banker has some takeaways from the Treasury breach for banks.
How Jenius Bank can afford to pay 4.8% on savings
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Jenius Bank, a digital-bank division of SMBC Manubank in Los Angeles, has grown from zero to more than $1 billion of assets in a year, with an almost completely remote team.
It's a rare example of a digital offshoot of a traditional bank that appears to be successful.
In 2018, several banks launched
The so-called Synapse rule and other BaaS challenges of 2025
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Unless the new administration squashes it, soon banks and fintechs will need to work with the FDIC's so-called Synapse rule, which would require them to ensure that the balances of custodial deposit accounts are accurate and reconciled on a daily basis.
"The majority of responsible, embedded finance and innovative banks are doing that today, or they're in the process of making sure that they're able to do that," said Phil Goldfeder, chief executive officer of the American Fintech Council. "The fundamental responsibility of the bank partnering with a fintech company is reconciliation and ensuring that they know what money is coming and going. In bank-fintech partnerships, the buck stops with the regulated entity."
For some smaller banks, this will be a tall order, said Konrad Alt, co-founder of Klaros Group.
New York, California gear up to scrutinize bank cybersecurity
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Over the coming year, state financial regulators in New York are expected to ratchet up their enforcement of cybersecurity regulations as amendments to these rules take effect and examiners scrutinize the details of whether and how banks implement the rules.
Recent enforcement actions by the New York Department of Financial Services have signaled that banks operating in the state will need to pay close attention to what exactly they do to protect nonpublic information, according to Bess Hinson-Greenspan, a partner at law firm Holland & Knight who focuses on cybersecurity and privacy litigation. Hinson-Greenspan spoke about the outlook for state cyber enforcement actions during an event put on by the law firm.
According to NYDFS regulations, nonpublic information includes consumers' personal information such as Social Security numbers, but unlike some other regulatory definitions of similar terms, it also broadly covers any information that "would cause a material adverse impact to the business" in the case of a data breach.
How AI is changing banking jobs: Rise of the 'AI whisperer'
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In June,
Experts and anecdotal evidence so far suggest
"I'm highly confident it's going to change the way we work, but I think it's going to create different types of work," Mike Abbott, global banking lead at Accenture, told American Banker. He estimates AI will affect 75% of banking jobs in some way.
Payments fintech investors bet on a turnaround in 2025
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The buzz around real-time payments, blockchain and artificial intelligence are pushing banks to come up with adoption plans, leading fintech investors to seek opportunities in fast-expanding sectors of the technology market that sell into these trends.
There are already signs of burgeoning demand for payments technology that portends a busy 2025. Payments-oriented fintech investment totaled $21.4 billion in the first half of 2024, compared with $22.7 billion for all of 2023, according to
Across all fintech sectors, global investment fell to $51.9 billion in the first half of 2024 from $62.3 billion in the second half of 2023, according to KPMG, noting payments is one of the few sectors within technology where investment is growing.
How Stripe 'teaches' tech to beat the payments fraud exam
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Crooks start most payments fraud by trying to figure out if the crime is actually worth the effort, sending small probes to see if there is enough money to steal.
The payments company says the technology has reduced a type of attack called "card testing" by 80% in the past two years. That has come as Stripe's yearly payment volume has grown from about $500 billion to more than $1 trillion during that time, a jump in payments activity that theoretically makes card testing easier.
Regions Bank deploys tech to take advantage of open banking
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In the wake of the Consumer Financial Protection Bureau's release of its long-awaited data sharing rule, many financial institutions, including
Regions is partnering with Axway, a data integration provider, to expand future open banking services for Regions' customers. One of Axway's products, Amplify Open Banking, will be integrated into Regions Bank's core systems to upgrade the bank's ability to share data with fintechs and other third-party financial service providers.
Its implementation of Axway's technology will help Regions Bank work toward compliance with the CFPB's recently finalized open banking rule, known as
