The future of banking was the overarching theme of American Banker's Digital Banking Conference this week.
Digital trends such as open banking, artificial intelligence and decentralized finance are accelerating the democratization of financial services. This shift, in turn, is helping banks meet customer demand for cheaper, faster and more personalized digital financial products.
"Stablecoins are the banks that people wish they had but never had," Bitgo CEO Mike Belshe said in a keynote.
Leaders across the financial services industry, from bankers to fintech founders, met and discussed these ideas at The Boca Raton Resort in Florida through four days of keynotes, panels, demos and networking sessions.
The conference also debuted American Banker's Innovation of the Year award, where
Here are a few more of the conference highlights, as collected by American Banker's editorial team.
Citizens: 'Full steam ahead' on open banking despite regulatory changes
The Consumer Financial Protection Bureau is
The Trump administration called the open banking rule finalized by
However, banks such as Citizens are choosing to respond to the rule's tabling by continuing to follow their already established strategies for bringing open banking into the customer experience.
Lamont Young, head of digital and omnichannel banking at Citizens, explained the bank's approach and advised others to do the same at a panel event on Tuesday.
"If you had a strategy in place prior to this administration and the dismantling of the CFPB and you feel like your strategy is strong, I would say it should be full steam ahead," Young said.
"What we all want to do is make sure that we're doing the right thing for our clients and protecting client data. More importantly, we're also protecting our own ecosystems from a fraud and securities standpoint. While the ruling forces us not to have standards across institutions, what it doesn't force us to do is to change course on doing the right thing for our clients."
KeyBank expands Qolo partnership with minority investment
"For the past 10 years we've developed this muscle around fintech partnerships," Diana Welch Howell, head of alternative and fintech strategies for KeyBank's commercial bank, said in a panel discussion. "One of the core components of that, after we've co-developed a product that meets clients' needs and we've shared the best of both worlds culturally, is being able to deepen that relationship with an equity investment. It's really just the cherry on top of making sure our destinies are aligned."
The investment expands the Cleveland-based bank's partnership with Qolo. In March 2024, KeyBank announced
Read more about the partnership between KeyBank and Qolo
Amplify Credit Union: We made money by eliminating fees
When banks started dropping overdraft fees during the COVID-19 pandemic, many did so to avoid regulatory scrutiny. For Amplify Credit Union in Austin, Texas, the question was what if enough new members joined, and enough existing members chose not to churn, that the credit union could make money by eliminating all fees?
The group was making $2 million annually through fees when it stopped charging them in 2022. But if being fee-free could be a point of differentiation, it could bring in more members and encourage them to move more money to their credit union account, potentially generating more than the lost fee income, said Stacy Armijo, Amplify's chief experience officer.
That's what happened: In the first year after losing the fees, the credit union grew its checking accounts by 5% more than it had expected and savings accounts by 8% more, Armijo said during a panel on how credit unions can do high-touch digital banking. Because of this, net interest margin improved, and the new accounts contributed to interchange income from debit card transactions. (Higher interest rates during this period meant that the credit union saw its results shrink overall, but that wasn't because of the lack of fees, she said.)
The switch allowed Amplify to focus on its mission-driven structure, rather than continuing to make money off its most cash-strapped members, an outcome available uniquely to a credit union, she said. —Chana Schoenberger
Anchorage CEO tells banks to 'make the bold move' on crypto
All the pieces are in place for banks to start offering cryptocurrency services, Anchorage CEO Nathan McCauley said in a keynote address on Monday.
The company, which obtained a national trust bank charter from the Office of the Comptroller of the Currency in 2021, provides crypto custody, trading and collateralization services to financial services firms including hedge funds, sovereign wealth funds, institutional investors and public companies adding bitcoin to their balance sheet.
"Fifty-five million Americans own some form of digital assets, be it bitcoin, be it stablecoins, be it their favorite altcoin," McCauley said. "This is a huge phenomenon. That's about 25% of the adults within the country holding digital assets in some form. Where are they holding it? And I would guess that the answer is, 'Not at your institution.'"
"There has never been a better time to get into digital assets," he said. "There's never been a better time to make the bold moves." —Penny Crosman
Read more about McCauley's keynote address
Bankers see demand for digital assets, but remain gun-shy
With the easing of U.S. regulations on cryptocurrencies, bankers are thinking once again about issuing stablecoins and offering digital asset services such as custody and lending.
The largest banks are moving ahead with stablecoins. JPMorganChase was first with JPM Coin, which is pegged to the U.S. dollar and used to process $1 billion of payments daily. Bank of America has said it's planning to offer a fiat-backed stablecoin. Citi already has digital tokens it uses to transfer money internally across geographies; it is said to be considering issuing its own stablecoin as well.
Conference attendees this week said that although they are seeing demand for stablecoins and digital asset services from customers, they are watching and waiting for firm regulatory guidance before plunging ahead. (Many smaller banks laid plans for bitcoin custody a few years ago; those plans were kiboshed by regulators, and the banks remain gun-shy.) —Penny Crosman
Read more about bankers' appetite for stablecoin and other digital assets
How Truist and Western Alliance deploy AI to fight fraud
As financial institutions face an increase in fraud, scams and cybersecurity threats because of new artificial intelligence technologies, bankers with
Carl Eberling, who manages the division at Western Alliance Bank that
This process, he said, allows the bank to interpret "indicators of compromise" and understand activity across various channels, including core systems, call centers, web browsers and mobile devices. Expanding beyond a narrow security focus to encompass availability and reliability broadened the view of the "threat surface," enabling a different approach to attacking threats.
Thomas Mazzaferro, chief AI data and analytics officer at Truist Bank, said the bank partners with providers that use AI for threat detection and to scan the environment to take down attacks.
Truist uses machine learning models for scanning in cases where it has "defined inputs, defined logic, and defined outputs," he said. For detecting undefined threats and attack vectors, where patterns may differ from normal, the bank uses solutions based on generative AI, which is more tolerant to unstructured data. —Carter Pape
Read more about Truist and Western Alliance Bank's use of AI in fighting fraud
Fifth Third: Sharing threat intel comes with risk
The head of cybersecurity for
Brian Minick, chief technology and information security officer at Fifth Third, said the primary adversaries to banks are organized crime groups motivated by financial gain. Nation-state intelligence organizations represent the most advanced threats, but organized crime is more frequently encountered in the financial sector, he said.
Minick also discussed challenges with information sharing among banks, which can be a potent defense against cybersecurity threats but can be counterproductive in certain cases.
Fifth Third employs a layered approach to detect attackers, according to Minick — a practice
The goal is to maintain a "dynamic, very morphing defensive posture" to adapt to attacker changes, he said. —Carter Pape
Read more about Fifth Third's approach to cybersecurity
