Commercial Banking Services

What's Under the Hood? Neobank vs. Traditional Bank Tech The banking landscape is changing rapidly, and the tech stacks powering this transformation are a key indicator. From cloud-native architectures and microservices to legacy systems and mainframes, the gap is significant. My latest analysis compares the technologies used by neobanks and legacy banks, highlighting the complexities faced by established institutions. Observations: Legacy Systems: Deutsche Bank, Caixabank, and Barclays all have significant legacy systems (often COBOL-based and running on mainframes) that are still critical to their operations. Modernizing these systems is a major challenge. Hybrid Cloud: While fintechs are often cloud-native, traditional banks tend to have a hybrid approach, with some workloads in the cloud and others remaining on-premises due to regulatory requirements and security concerns. Slower Pace of Change: Due to the complexity of their systems and regulatory constraints, traditional banks often adopt new technologies at a slower pace than fintech companies. Focus on Stability and Compliance: Reliability, security, and regulatory compliance are paramount for traditional banks. This influences their technology choices and development processes. Nubank's Clojure: Nubank's use of Clojure is notable. It's a functional language that offers benefits in concurrency and data management, aligning well with their data-intensive operations. Constantly Evolving: All tech stacks are constantly evolving as they grow and adapt. ❓ What are your thoughts on the tech divide in banking? 👇 Share your insights in the comments 👇 #neobanks #banking #digitaltransformation #innovation #techstacks

Cash flow is not an afterthought. It is strategy. When I walk into a business, the first thing I want to see is how money actually moves. Not just on paper, but in practice. That story always tells me more than the P&L. At one company, we found that 40 percent of revenue was being collected in the last two months of the year. That meant the business was constantly strapped for cash even though it looked profitable on paper. The solution was to secure a new lending facility tied to receivables. That single move changed the entire trajectory of the business. In another case, a company wanted to accelerate growth, but the real bottleneck was suppliers who were paid in 60 days while customers were taking 90 days to pay us. We shifted terms, built a rolling 13-week cash forecast, and suddenly the company had room to invest in growth without taking on additional debt. I have learned that cash flow planning is not about being conservative. It is about being prepared. It gives you the ability to say yes when the right opportunity comes, or to survive when the unexpected happens. Profit is theory. Cash flow is reality. And if you want to be strategic, you start with reality. How often do you treat cash flow planning as strategy rather than just finance housekeeping?

College costs have risen faster than inflation and wage growth. And yet, research shows that the barriers to saving for college are often not just financial. Stanford Initiative for Financial Decision-Making (IFDM) 's Financial Literacy Colloquium today featured Guglielmo Briscese, who presented findings from a landmark analysis of over 900,000 Illinois 529 college savings accounts. The results are striking. Among parents who could save enough to cover half of their child's future college costs, 61% still believed their savings would be meaningless. That is not a resource problem. That is a knowledge and perception problem. Financial literacy emerged as one of the most powerful predictors of whether and how much families save. Parents with higher financial literacy saved more, planned better, and made more effective use of the tools available to them. This is exactly why financial literacy education matters so much, and why it has to start early. The tools exist. The programs exist. What is often missing is the knowledge to use them well. Guglielmo's research is an important contribution to a field that is growing, and a reminder that addressing the college affordability crisis requires more than expanding access to savings vehicles. It requires closing the knowledge gap that prevents families from using them. Read his research:  https://lnkd.in/dxrggdrE

Banking is Resilient – Backed by Regulators, Driven by Technology  In 2025 , We stand at the intersection of #FutureFinance and #EmergingTechnologies, the resilience of banking institutions is no longer just about compliance or cybersecurity—it’s about transformational readiness across every unit. 💡 I recently mapped 25+ banking units and how each will be impacted by AI, Blockchain, CBDC, Open Banking, and beyond. Want to know how your banking unit ranks in readiness for Future Finance ? 1. Retail Banking Hyper-personalized financial services using AI/ML, AI-driven customer support, digital onboarding. 2. Corporate Banking Real-time cross-border settlements, tokenized trade finance, automated cash flow forecasting. 3. Digital Channels API-first infrastructure, embedded finance, super app ecosystems on Mobile , Internet Banking 4. Treasury & Investment Management Quantum algorithms for portfolio optimization, AI-based risk analytics. 5. Risk Management Real-time risk scoring, predictive modeling, fraud detection. 6. Compliance & Regulatory Automated compliance checks, real-time transaction monitoring, smart audit trails. 7. Credit Underwriting Alternative credit scoring using AI and behavioral data 8. Loan Origination & Servicing End-to-end digital loan journeys, auto-repayment logic via smart contracts. 9. Customer Experience (CX) & Engagement AI chatbots, behavioral personalization, voice and facial biometric interfaces. 10. Fraud Prevention & Cybersecurity Real-time fraud alerts, zero-trust architecture, biometric-based access. 11. Payment Systems Instant domestic and cross-border payments, programmable money, tokenized assets. 12. Trade Finance & Supply Chain Finance Smart contracts for letter of credit, tokenized documents, traceability. 13. Wealth Management Robo-advisory, AI-based portfolio management, tokenized investment options. 15. Data Analytics & Business Intelligence Unified dashboards, behavioral analytics, real-time performance insights. 16. Core Banking Systems (CBS) Microservices, real-time ledger updates, blockchain-based CBS extensions. 17. IT Infrastructure & Cloud Operations Serverless banking, secured edge computing, resilient multi-cloud. 18. Fintech Partnerships & Ecosystem Engagement API marketplaces, Banking-as-a-Service (BaaS), ecosystem monetization. 19. Human Resources (Future of Work) Talent upskilling in AI/Blockchain, virtual onboarding, gig workforce models. 20. Audit & Internal Controls Continuous auditing, automated red-flag systems, smart logs. 21. Branch Operations & Automation Smart kiosks, paperless branches 22. Sustainability & ESG Reporting Real-time carbon tracking, green investment , ESG tokenization. 23. AI/ML Model Governance Unit Bias detection, regulatory validation. 24. Centralized KYC/AML Unit Self-sovereign digital identity, cross-bank KYC sharing, AI for anomaly detection. 25. Innovation Office Sandbox testing, emerging tech adoption, innovation KPIs.

The ATM isn’t dead. It was just waiting for a cloud-native brain. While incumbent banks view ATMs as a cost center—a legacy utility for dispensing cash—Revolut has quietly reimagined them as a fully autonomous customer acquisition channel. This isn't just a hardware update; it is a masterclass in architectural agility. In the time it takes a legacy institution to update a mainframe protocol, Revolut’s new terminals are delivering a full-stack branch experience: Instant Onboarding: Open a fully KYC-compliant account in minutes. Physical Issuance: Dispense a ready-to-use debit card on the spot (no mail delays). Frictionless Access: Fee-free withdrawals and multi-currency support that challenges traditional FX spreads. The deeper question for banking leaders: Why can Revolut deploy this while traditional banks struggle? It comes down to the Core. Legacy banks are often paralyzed by "spaghetti code"—layers of vendor-specific software and on-premise constraints that make real-time hardware integration a nightmare. Revolut decoupled the ATM's core logic, moving critical decision-making to the cloud. This infrastructure allows them to leverage AI not just for "chatbots," but for real-time fraud detection and instant risk scoring during that physical account opening process. If your innovation roadmap is blocked by your core banking system, you aren't competing on features; you are losing on velocity. Is your infrastructure an anchor or an accelerator? #Fintech #BankingInnovation #CoreBanking #AI #DigitalTransformation #Revolut #FinancialServices

This Deep Dive edition of Fintech Wrap Up explores the great bank unbundling offering a comprehensive analysis of how the financial services industry has evolved through technological innovation and regulatory shifts. Analyses by Contrary Research, break down fintech's transformation into three major phases: Digitization – The transition from traditional banking to online services, driven by innovations like online banking in the 1990s and early digital financial tools. Disintermediation – Post-2008 financial crisis distrust in large banks and the rise of smartphones led fintech startups to disrupt traditional banking with digital payments and simplified infrastructure. Embedded Infrastructure – Platforms like Stripe and Plaid enabled fintechs to deliver financial services more efficiently, fueling the growth of Banking-as-a-Service (BaaS). The article also highlights how community banks partnered with fintechs to stay competitive, taking advantage of regulatory changes like the Durbin Amendment. Companies like Uber leveraged embedded finance to unlock new revenue streams and improve customer retention, while BaaS providers empowered non-bank companies to launch financial products faster and more affordably. However, the piece also underscores the growing regulatory scrutiny and compliance challenges in BaaS, stressing the importance of balancing innovation with regulatory compliance. #fintech #banking #baas Prasanna Thomas Richard Panagiotis Tony Nicolas Arjun Dr Ritesh Sandra

🟣 This is the way I make research, and I am grateful for the ongoing engagement and insights from IBM clients and banking executives who enrich my IBM Institute for Business Value studies each year by generously sharing their time and strategic perspectives. I am especially indebted to the select group who graciously allow us to publish excerpts from our conversations in the annual edition of "The Voice of the Makers", a companion to our primary research findings. They work for: 🇹🇷 Akbank 🇨🇴 Bancolombia 🇳🇴 DNB 🇿🇦 FirstRand 🇮🇹 Intesa Sanpaolo 🇧🇷 Nubank 🇧🇷 Santander GetNet 🇨🇦 TD Bank 🇸🇬 UOB 🇨🇦 Zafin The insights that emerge are compelling, and I invite you to delve deeper. Three key themes resonate throughout these conversations: 🚀 Build competitive advantage by modernizing your banking core with AI: Innovation in banking faces challenges from regulations, client responsibilities, and technical debt, complicating long-term initiatives. To gain "asymmetrical advantages", banks shift to strategic models where AI simplifies operations, re-orchestrates workflows, and embeds business logic. AI evolves software development, automating scalable code generation from rules and legacy mining for efficiency. 🛞 Change core banking tires at full business speed: Core banking modernisation is crucial in fast tech cycles, requiring resilient IT aligned with business strategies. CIOs lead with hybrid infrastructure, APIs, and AI to enhance efficiency, overcoming silos and risks. Phased approaches decouple data, adopt modular systems, leverage cloud, and integrate AI, balancing stability with innovation for customer-centric growth. ☔ Create a new profession: The AI risk manager: In the AI era, banks need robust risk management to leverage generative and agentic AI while ensuring integrity and compliance. By making all bankers AI risk managers, institutions shift to proactive strategies through collaboration, addressing biases, privacy, and vulnerabilities. Tailored validation and AI tools enhance oversight and innovation. Find in comments a quote from each contributor ⤵️ And read the full interviews by downloading this paper, as well as the main research study. There is so much I have learned, and I am happy to share with all of you! 2025 THE VOICE OF THE MAKERS 📥 https://lnkd.in/d2wvGQrg THE 94% CORE BANKING PROBLEM 📥 https://lnkd.in/gzhXm4XQ #IBM

In a NAV (Net Asset Value) credit facility, the methodology/procedure for valuing assets is at the core of the deal. The valuation of assets in a NAV facility determines the amount that can be borrowed under the facility and when prepayments of the loan must be made, usually through the use of a maximum LTV (Loan-to-Value) ratio. The higher the valuation of the assets, the more the borrower can borrow under the facility. A secured lender's worst fear is that the loan will default and the collateral will not pay back the loan. For this reason, NAV lenders focus on the valuation of a fund's assets and the LTV ratio (which allows for breathing room in case the assets sell for less than their assessed value). The question lenders often confront, however, is "What the heck are these assets worth"? The answer depends on the fund's investments/strategy: ➡ Private Equity Funds: These funds, which own equity in private companies, use the Discounted Cash Flow (DCF) method, where future cash flows are discounted to current value using a rate tied to the time value of money and the risk of the investment. The LTV ratio for these funds tends to be low, usually 5% to 20%, because these investments are illiquid and bespoke. ➡ Private Credit Funds: These funds, which make or purchase loans, often value assets using a mix of the DCF method and comparisons to the valuation of similar loans sold in the market. Because the cash flows are tied to contractual obligations in the underlying loan agreements and there is often an active secondary market for loans, the valuation is more reliable and the LTV range is higher, usually 30% to 70%. ➡ Secondaries: These funds buy equity interests in other funds in the secondary market. The valuation of these investments is often a combination of the market approach (either examining the price of similar recent transactions or using a price to earnings multiple) and the DCF approach. Secondaries funds typically have an LTV ranging from 25% to 60%, reflecting the higher level of confidence in the valuation. The valuation procedure in the credit agreement varies based on the strategy of the fund borrower. A fund borrower usually supplies the initial valuation and provides regular updates on the value, usually on a monthly, quarterly or semi-annual basis. The credit agreement may include the methodologies and assumptions to be used in valuing the assets. The credit agreement may also provide a procedure for disputing an asset valuation, which is often triggered when the facility's LTV gets close to the covenanted LTV level. There may be limits to how often a valuation can be challenged and provisions as to which party has to pay for the valuation. These protocols are subject to negotiation but also vary depending on the fund strategy, with a challenge right being more common in a private equity buyout fund and less typical in a secondaries fund or a private credit fund.

I’ve been to more accelerator demo days than I can count, but this one was different. Innovation Day showcased impactful POC collaborations with FIS that are pushing the boundaries in fintech: 1. Prelim: A seamless integration pulling core data into treasury management documents, removing manual input and boosting efficiency. In partnership with FIS, this innovation transformed a bank’s workflow, making data entry accurate and fast. 2. RiskScout: As financial crime rises, RiskScout provides real-time solutions that streamline compliance, automate workflows, and ease BSA team workloads. Partnering with FIS, they tested transaction monitoring, risk scoring, and automation, setting a new standard for regulatory compliance at reduced costs. 3. Entrio: Simplifying vendor management, Entrio offers visibility into tech stacks, identifying and optimizing existing solutions. FIS worked with Entrio to clean and consolidate its own vast supplier network, unlocking new efficiency in vendor governance. 4. Spade: With real-time merchant intelligence, Spade identifies genuine merchant identities to enhance transaction clarity. A POC with FIS saw 96.4% of transactions accurately matched to merchants, improving approval rates while preventing fraud. 5. MoneyKit: Connecting fragmented financial accounts is key, and MoneyKit offers FIS a single API for five major platforms, driving seamless customer interactions. The POC demo showed how consolidating data can boost engagement and loyalty in digital banking. 6. Blooma CRE: Automating commercial real estate underwriting, Blooma’s cloud-based platform delivers faster and smarter insights. FIS’s POC confirmed Blooma’s potential to minimize implementation fatigue and manage risk, with AI adding value without replacing human judgment. Stay tuned for Part 2, where I’ll cover the remaining companies and panel takeaways! #fis #innovationday #fintechinnovation #ecosystembanking

What does “financial literacy” mean to Frost, an institution with a longstanding tradition of serving the growing Texas population? To us, it’s about empowering individuals to make informed financial decisions that foster not only their own growth but the growth of their communities. Regional banks like ours have a responsibility to show up in the communities we serve, providing the unique resources and education locals need to thrive. Regardless of geography or size, here are just a few things the financial services industry can do better to promote #FinancialLiteracy among the communities they serve: ✅ Meet people where they are – Financial literacy isn’t a one-size-fits-all effort. It starts with understanding where and how consumers get their information and using those insights to make programming more accessible and relevant. ✅ Simplify financial concepts – Not only do banks have a responsibility to use clear, straightforward language when communicating about these topics, but they also have to humanize the banking experience. This comes from being non-judgmental, empathetic and truly understanding each customer’s unique needs and challenges so we can support them in the best way possible. ✅ Partner with schools – Financial education should start early, and our industry can play an important role in helping integrate financial education into school curriculums. ✅ Invest in community outreach – Hosting financial workshops, partnering with local organizations and offering mentorship and networking programs are all ways to build trust and positively impact the financial wellbeing of a community. Institutions like Frost are uniquely positioned to champion financial literacy because we understand the specific needs of the communities we call home. This should be more than a responsibility or a box to check for our industry – it's a shared journey with customers towards financial wellness and prosperity. #FinancialLiteracyMonth