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Articles by CCG Catalyst
Sector Spotlight: AI Agents and Connectors for Banks and Credit Unions
Sector Spotlight: AI Agents and Connectors for Banks and Credit Unions This Sector Spotlight accompanies our two-part commentary on AI in banking: the model-risk guidance that left generative and agentic AI out of scope, and what protects a bank before governance catches up. Those pieces argue that agents are arriving inside the platforms banks already use, and that their capability is defined by their connections. This landscape maps both layers: agents and connectors.
Impact of Regulatory Uncertainty on Bank Innovation
This data suggests that the survey’s respondents fall primarily into two groups: those that are committed to navigating uncertainty in the pursuit of innovation and those that are more wary. There are undoubtedly several defining characteristics that separate these two groups; for example, those in the former group are probably more progressive to begin with, while those in the latter may be more traditional in their thinking.
Open Banking in the US: How Did We Get Here?
The US’ open banking journey is one of twists and turns. It began as an industry-led movement to get consumer data into third-party apps that customers were hungry for. In the meantime, regulation loomed on the horizon, and last year it looked as though it might finally become a reality. But then a change of administration ushered in a new era, putting the rule in limbo. Fast-forward a few months, and JPMorgan Chase just announced that it will begin charging for access to its customers’ data.
Sector Spotlight: Transaction Fraud Systems
Fraud detection and prevention systems play a crucial role in protecting financial institutions (FIs) from financial losses and reputational damage while ensuring compliance with applicable laws. These tools identify suspicious activity and mitigate fraud to avoid financial damage to the FI or its customers. Effective fraud systems help manage operational costs and support an institution’s growth by enabling more, faster, and lower-friction transactions at a low successful fraud rate.
What the GENIUS Act Means for Banks
The US Senate passed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act last week. If it were to be signed into law, the GENIUS Act would create the first federal framework for dollar-pegged stablecoins, according to CNBC. The GENIUS Act will now go to the House for further consideration. Stablecoins are having a moment.
Sector Spotlight: Core Banking Systems — Fourth Generation - CCG Catalyst
This is the first installment in a four-part series that covers the four generations of core banking systems. For more information on how these generations are defined and their history, read our commentary here. The latest generation of core banking systems — the fourth generation — focuses on process-centric, composable platforms with modular, cloud-native architectures. These systems represent the latest technology available.
A Blueprint for Your Bank's Next Decade
It’s no secret that the neobank threat waned in the last few years. Once a major topic of conversation in strategic planning sessions, talk of such competition slowly faded among bankers I spoke with as these fintechs struggled to reach profitability and many shuttered their operations entirely. But now that discourse is back, for one very big reason: Unicorn neobank Chime went public. Chime’s IPO reignited a conversation about the threat from fintech challengers to traditional banks.
The Importance of AI
Artificial intelligence in Banking More than half of financial services professionals globally surveyed by NVIDIA strongly agree that AI is important to their company’s success. Critically, this represents a major increase from the 29% who said so a year prior. It is clear that the recent enthusiasm around generative AI, propelled forward by the 2022 launch of ChatGPT, is leading to a massive, increased emphasis on the future of the technology set overall.
The Top 5 Things on Our Mind Heading Into 2025
As a new year begins, it is always useful to take stock of where we are and to contemplate where we’re headed. With that in mind, here’s a look at the top 5 things we will be watching closely as 2025 gets underway: 1.
The Lending Automation Imperative - CCG Catalyst
Skip to content The Lending Automation Imperative In our discussions with bankers, efficiency and automation in lending keep coming up. Automation should augment and improve what humans can do and increase their capacity. It should also make self-service channels more effective. In the CSI 2025 Banking Priorities Survey, digital engagement with customers topped the list of lending areas bankers said would benefit from automation, picked by 46% of respondents.
“All of the Above” Isn’t a Channel Strategy
It’s well-documented that mobile is the primary or preferred banking channel for Gen Z and millennial consumers, and that digital overall dominates consumers’ interactions with their bank. According to an American Bankers Association survey, the most-used banking method for 64% of Gen Zers and 68% of millennials is mobile. The vast majority for each generation measured is digital. Bankers should ask the question: Why measure primary channel at all?
Banking on Bangkok
As part of the 2024 FinTech Business Development Mission to Hong Kong and Thailand, we arrived in Bangkok late in the evening from our first stop in Hong Kong. The next day, our managing partner, Paul Schaus, and I met with the U.S. Embassy for a briefing and discussion of key financial statistics within Thailand. Sitting in a luxurious meeting room in the St. Regis, we discussed Thailand’s forward momentum in the digital economy, internet use, and mobile commerce.
Pitfalls in Technological Preparedness
Here are three common pitfalls when assessing preparedness: Assuming that a working tech stack is enough. Aging core systems built up over many years accommodate basic modern experiences, like mobile banking, and can continue to fulfill the bank’s basic functions. But a tech stack dominated by legacy systems may lack the extensibility and scalability to change quickly and robustly in response to new technologies and evolving customer needs.
Hong Kong: The World’s Window to Financial Play
Two weeks ago, I had the opportunity to join our founder and managing partner, Paul Schaus, as part of the . On this trip, my first to Hong Kong, I learned that when constructing high-rise buildings near the mountains, it’s customary to incorporate large gaps, known as “dragon gates,” into their design. This allows for the dragon to see the view, enter, and exit freely. This is a gesture of respect to ensure his safe return.
Bankers’ AI Confusion
Given that NLP and other associated technologies like generative AI are the building blocks of using AI for customer interactions, there is obviously a mismatch here. So, what is the difference? Well, one question asked about AI specifically, and the other didn’t use the term at all. Instead, the latter question focused on the specific technologies that fall under its umbrella.
Money 20/20 2024
CCG Catalyst attended Money20/20 USA last week to capture insights on what’s hot in banking and fintech. Based on our observations, its content confirmed several trends we are seeing in the market, with a couple of more surprising highlights. Here are three takeaways that stood out to us: Artificial intelligence (AI) got top billing — with a focus on risk and compliance.
Signals That Inform a Fintech Strategy
In particular, Curql, a consortium of credit unions, participated in deals for Amount, a loan origination system, and ModernFi, a deposit network. (Several regional banks also recently made direct investments in ModernFi.) The solutions they’ve invested in suggest a clear-headed approach to innovation based on business needs. Top deals in Q3 for US banking sector fintechs were: Amount: $30 million Series E.
The Banker's Technology Playbook
Innovation in bank technology is important for institutions of all sizes. While progress is often concentrated among the largest money center banks, this progress drives trends across infrastructure, operations, and the customer experience that are relevant to everyone. At the boardroom and senior management levels, executives need to understand this and decide how to react to those trends.
What Big Banks’ Confidence Tells Us
The data suggests that, as small- to mid-size institutions continue to contemplate the challenges of the current environment, from regulatory scrutiny to economic headwinds, big banks are largely forging ahead. This is important because large institutions, unbounded by geography due to their digital footprints, are a major competitive threat to community banks. Moreover, this isn’t about confidence alone; it is about what confidence does to inform strategy.
A Path to Predictive Customer Service
Customer service in banking has changed as new channels emerged and old ones evolved. Its gradual shift from in-person, branch-based interactions to include contact centers, self-service via phone, messaging via digital banking, virtual assistants, and live chat almost certainly pushed down costs per interaction for the bank and in many cases made customer service more convenient for customers.
Primary Bank Status Is Now About Data
Nearly 40% of bankers in a study conducted by Bank Director said they believed their bank had at least 50% of their customers’ financial data. But that number may be optimistic given customers’ potential relationships with competing institutions and nonbanks, like neobanks and consumer payment services, that consumers also use to perform financial activities.
New Frontiers In Banking 2024: Balancing Caution And Excitement
Skip to content To set forward-looking strategies, bank execs must be on top of today’s trends. This report is designed to help leaders understand what innovations dominate the conversation and where they’re headed. It is based on CCG Catalyst’s New Frontiers Survey 2024, which asked C-level bank executives in the US about their attitudes and priorities. AI dominated among respondents as having the most potential for influence, opportunity, and risk.
Can Innovation Be Vanilla?
One of the things we’ve heard over and over again recently is that now is not the time for adventures in banking. Rather, as one former regulator put it recently, “It is time to go vanilla.” This is largely in response to a tough regulatory environment, which has led to major crackdowns on anything novel in banking, following the collapse of Silicon Valley Bank in 2023. But what does that mean exactly? Is innovation dead?
Operational Efficiency, CX Drive Technology Strategies
Operational efficiency is a valid concern given many banks’ aging technology and legacy processes. It’s natural for many bankers to feel compelled to prioritize fixing operational risks, cutting costs, and removing roadblocks to modernization — like manual processes, inefficient workflows, inconsistent data between systems, and problems integrating third-party technology. This is an important part of modernization. Revenue generation, meanwhile, is the other side of the coin.
What I Heard In Washington
As a Washingtonian who escaped to Arizona after a successful banking career in the nation’s capital to build and scale a consulting firm, I had the privilege to join the bankers from the Western States in DC recently. I attended various meetings with the ABA and regulatory agencies (OCC, FRB, FDIC, and CFPB) as well as a meeting at the White House with Chairman Jared Bernstein, United States Council of Economic Advisers.
Prioritizing Products at Community Banks
Respondents’ selections aren’t surprising, given the local focus and the distribution of services a typical community bank would offer. Community banks originate a disproportionate amount of loans to small businesses, as we’ve noted, and on average hold a relatively large volume of CRE loans. A community bank may be the most qualified or only bank to make agricultural loans.
Managing New Recordkeeping Risks
As events over the past six months remind us, regulation that covers Banking-as-a-Service (BaaS) sits in a gray area. Sponsor banks per se are well-regulated. But by and large, nonbank partners are not. That makes the bank ultimately and often solely responsible for compliance violations. When something breaks without the right controls, the bank is left holding the bag. It may not be equipped to handle the situation. The risk grows as third-party partners multiply.
A Framework for Evaluating Fintech
To be actionable, bankers’ definition of “fintech” should be complete and specific. Popular fintech conjures images of third-party distributors of banking services — consumer payment apps and neobanks — and other companies that facilitate customer-facing depository and payments products. But those are only the tip of the iceberg.
Diagnosing Bankers' Planning Dilemma
Annual planning is underway, but it’s not clear what lies ahead. What should financial institutions’ (FIs’) senior leaders do? There may be no right answers — banking rules are piling up while changes in control of Congress or the White House could upend them. With the election a coin toss and without clear policy proposals, there’s no telling what legislation could look like in the next few years.
Data Strategy in the Age of AI
Fragmented data is a sales and customer retention problem. Different pieces of data, like demographics, product ownership, spending behavior, or financial goals, are isolated from one another, preventing a holistic view.
Finovate Fall 2024
Finovate Fall last week signaled topics that were top of mind in fintech and which companies had the ambition and traction to present. Artificial intelligence (AI) was wildly popular at the expo and in the general session — we counted eight general-session presentations focused squarely on AI and generative AI. Unlike in recent years, Banking-as-a-Service and embedded finance were more often framed as risks than opportunities, and conversations about crypto were sparse and brief.
Alkami Hosts Banking Executive Masterclass on Preparing for Open Banking in the U.S.
Webinar explores how financial institutions can prepare, while educating employees and account holders k5:G 4=2DDlQ!#}0x>365565pDD6E#676C6?46Q :5lQs:GpDD6E!=246w@=56C`QmkAmk2 9C67lQ9EEADi^^>>2]AC?6HDH:C6]4@>^>65:2^ghhhdd^p=<2>:0{@8@G`]9E>=Q C6=lQ?@7@==@HQ E2C86ElQ03=2?<Qmk^2mk^Amk^5:Gm kAm%96 >2DE6C4=2DD G:2 2 H63:?2C 3C@F89E E@86E96C s66A '2C>2[ 49:67 E649?@=@8J @77:46C 2E p=<2>:[ kDA2? 4=2DDlQI?\A6CD@?Qmy2>:6 {2?8k^DA2?m[ AC@5F4E @H?6C 2E p=<2>: 2?5 kDA2?
Alkami Hosts Banking Executive Masterclass on Preparing for Open Banking in the U.S.
Webinar explores how financial institutions can prepare, while educating employees and account holders k5:G 4=2DDlQ!#}0x>365565pDD6E#676C6?46Q :5lQs:GpDD6E!=246w@=56C`QmkAmk2 9C67lQ9EEADi^^>>2]AC?6HDH:C6]4@>^>65:2^ghhhdd^p=<2>:0{@8@G`]9E>=Q C6=lQ?@7@==@HQ E2C86ElQ03=2?<Qmk^2mk^Amk^5:Gm kAm%96 >2DE6C4=2DD G:2 2 H63:?2C 3C@F89E E@86E96C s66A '2C>2[ 49:67 E649?@=@8J @77:46C 2E p=<2>:[ kDA2? 4=2DDlQI?\A6CD@?Qmy2>:6 {2?8k^DA2?m[ AC@5F4E @H?6C 2E p=<2>: 2?5 kDA2?
Maximizing the Branch's Value
Gen Zers, now aged between 12 and 27 years old, include millions of consumers who have been legally able to open a bank account for years. Changes to banking channel use, including mobile’s growth into the most frequently used way consumers manage their bank account (as we’ve covered), haven’t erased legacy channels’ value to acquiring, engaging, and retaining customers.
Alkami Hosts Banking Executive Masterclass on Preparing for Open Banking in the U.S.
Webinar explores how financial institutions can prepare, while educating employees and account holders k5:G 4=2DDlQ!#}0x>365565pDD6E#676C6?46Q :5lQs:GpDD6E!=246w@=56C`QmkAmk2 9C67lQ9EEADi^^>>2]AC?6HDH:C6]4@>^>65:2^ghhhdd^p=<2>:0{@8@G`]9E>=Q C6=lQ?@7@==@HQ E2C86ElQ03=2?<Qmk^2mk^Amk^5:Gm kAm%96 >2DE6C4=2DD G:2 2 H63:?2C 3C@F89E E@86E96C s66A '2C>2[ 49:67 E649?@=@8J @77:46C 2E p=<2>:[ kDA2? 4=2DDlQI?\A6CD@?Qmy2>:6 {2?8k^DA2?m[ AC@5F4E @H?6C 2E p=<2>: 2?5 kDA2?
Alkami Hosts Banking Executive Masterclass on Preparing for Open Banking in the U.S.
Webinar explores how financial institutions can prepare, while educating employees and account holders , /PRNewswire/ -- Alkami Technology, Inc.
Alkami Hosts Banking Executive Masterclass on Preparing for Open Banking in the U.S.
Webinar explores how financial institutions can prepare, while educating employees and account holders k5:G 4=2DDlQ!#}0x>365565pDD6E#676C6?46Q :5lQs:GpDD6E!=246w@=56C`QmkAmk2 9C67lQ9EEADi^^>>2]AC?6HDH:C6]4@>^>65:2^ghhhdd^p=<2>:0{@8@G`]9E>=Q C6=lQ?@7@==@HQ E2C86ElQ03=2?<Qmk^2mk^Amk^5:Gm kAm%96 >2DE6C4=2DD G:2 2 H63:?2C 3C@F89E E@86E96C s66A '2C>2[ 49:67 E649?@=@8J @77:46C 2E p=<2>:[ kDA2? 4=2DDlQI?\A6CD@?Qmy2>:6 {2?8k^DA2?m[ AC@5F4E @H?6C 2E p=<2>: 2?5 kDA2?
Alkami Logo (PRNewsfoto/Alkami Technology, Inc.)
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Seeking Stable Modernization
Modernization strikes a delicate balance between the risks of change to banking technology and the perils of inertia when legacy systems and processes are in place for too long.
Addressing Scale Challenges in Risk and Compliance - CCG Catalyst
These BaaS (referred to in the study as embedded finance) partnerships are a lot for a bank’s risk and compliance teams to handle, particularly in the community-bank segment. Banks that depend on manual processes and the sheer size of their risk and compliance teams to mitigate potential problems introduce fixed costs that a sponsor bank may be unwilling or unable to bear.
Time to Design AI Risk Practices
Artificial intelligence (AI) is fraught with risks for financial institutions (FIs) that a few years ago didn’t exist on the same scale — particularly in the context of regulations that were written for another era. The sheer volume of data, the growing number of data sources, and increasingly complex mechanisms for analyzing data foretell rules that today are only nascent. Today, the development of AI in financial services is well ahead of the regulatory process.
AI May Be Better When It’s Boring
Artificial Intelligence in Banking The most common priority for AI adoption among a sample of financial institutions (FIs) in a study by Alkami was automating manual processes for employees. Within that group, which included both banks and credit unions, 57% ranked it as a top three priority. It was 13 points ahead of protecting the institution from fraud or threats. Improving the customer experience came in a close third.
Stay Smart About Innovation
There’s no doubt that Banking-as-a-Service (BaaS) is contracting amid the model’s regulatory scrutiny and outright failures. Sponsor banks are skittish about adding program partners, the market for new entrants has frozen, and some sponsor banks have shrunk or started to unwind their BaaS programs completely.
Setting Priorities With Third-Party Solutions
Setting Priorities With Third-Party Solutions Digital Banking, Onboarding, and Security A sample of financial institutions (FIs) globally most often picked a unified digital banking platform for retail and small and medium-sized businesses when asked to choose the top solution they would partner with a third-party solution provider for. Security and fraud management and digital account opening came in neck-and-neck for second place.
Who Will Step Away From BaaS?
Regulatory whiplash in Banking-as-a-Service (BaaS) threatens a business strategy relatively popular among community banks. Most at risk is the deposit-focused model common to the neobank era.
What Talent Plans Say About Strategy
Skip to content What Talent Plans Say About Strategy Technology, Risk, and Cybersecurity Staffing challenges at banks with less than $100 billion in assets appear to have eased, according to research by Bank Director, as financial institutions (FIs) shrink or put off hiring.
An Affinity Brand Goes Best With a Sidecar Core
Too many digital-only brands are smoke and mirrors — new brands offered by legacy banks, providing the same fundamental products and using the same core as the parent bank. The point of an online-only brand is usually to gather deposits and, sometimes, to grow the loan book. But it’s also a chance to introduce a modern core to offer products at a lower cost and in some cases set the stage for a greenfield modernization plan.
Fixing Banks’ Intractable Data Problem
Fixing Banks’ Intractable Data Problem Analytics and Vendor Management It’s no secret that most financial institutions (FIs) spend too much time extracting and making sense of their data and don’t get enough value in return. Many have tried to fix the issue by outsourcing data-related tasks but have only made it halfway: FIs in a study commissioned by MX predominantly managed their consumer data using a combination of in-house and outsourced solutions.
Applause for Regulators’ Better Grasp on BaaS
Regulators’ views on Banking-as-a-Service (BaaS) are maturing. The OCC, Federal Reserve, and FDIC just published a joint statement on banks providing deposit products and services through third parties — a classic BaaS use case — and the risks to end users. It addresses specific and timely issues in the BaaS space and drills down deeper than guidance on third-party risk management. The statement is part of a regulatory normalization that we’ve seen coming.
Put Cyber Risk on the Agenda
FIs anticipate more scrutiny of cyber risk from regulators. According to a study by KPMG, 80% of a large sample of senior US bank executives think that cyber risk supervision and enforcement will increase over the next 12 months. It’s the top factor by far among options in the survey that include data governance, financial risk management, and emerging technology risk.
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