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The Quarterly Review: Newline by Fifth Third’s GM Tom Bianco plans on strengthening products, client experiences, and brand equity

Notes from the desk: Welcome to this month’s Quarterly Review, a series where I dive into what executives from some of the best brands in financial services are focusing on in this quarter, as well as how they are planning to achieve their goals. It’s a chance for the industry to learn about what goes on behind an FI’s four walls and how leadership manages their priorities. 

But that’s not all: a review implies no mandates, a check in. So stay tuned next quarter to learn whether the executive achieves his plans and translates theory into reality.

In this edition, we will focus on Tom Bianco, General Manager at Newline by Fifth Third. 

Bianco runs Newline by Fifth Third, and has previous experience at J.P. Morgan Chase as Executive Director and Vice President of Payments Strategy. In the following quarters, Bianco’s plans span product development, improvement of client relationships, as well as creating a stronger image and recognition for the Newline by Fifth Third brand.

The focus: Products, client experiences, and brand awareness

Bianco: Our focus for the coming quarters is going to center around three main pillars:
 

  • Build brand awareness and recognition for Newline in the broader fintech ecosystem.
  • Continue delivering new and innovative solutions for our clients to build their end user value propositions. 
  • Drive richer program manager experiences to unlock operating efficiencies.

1. Build new products and services for our clients:

We will see a lot of value propositions around account to account payments, leveraging what’s going on in Open Banking in the United States. We have an Open Banking groundswell of activity, plus real time payments like FedNow, which is a software-based payment method – those two things come together, and we see a total open market and opportunity for us to help our customers and our clients build their value propositions and take advantage of those two changes in the payments ecosystem in the US.

With real time payments and FedNow, we have two payment networks that are built for real time and have started to look more like card networks, as opposed to ACH. We have payment methodologies and technologies that can keep pace with the real time world, which is not historically how the banking and payment sector outside of the card networks have operated in the US. So we think those two things are going to create a massive opportunity in the US. 

  1. Drive richer program manager experiences

Often we get stuck in calling and emailing. But if you are building digital first payment experiences, you need a digital first relationship experience on the banking side for our program managers or our clients so they can leverage the power of software and the power of integration to support their business. 

We need to even out the relationship experience with the digital experience so that our clients and our solutions. 

  1. Build better brand awareness and recognition

We need to just make sure everybody understands that Newline is a Fifth Third brand. We have Newline by Fifth Third because we have a separate client set that we’re going after. So we need to make sure that there’s brand uniqueness, but we can’t lose the identity of the strength, stability, and the power of one of the largest banks in the United States. 

First, we need to make sure everybody understands Newline is a part of Fifth Third. Secondly,  we need to make sure people understand that even though we are a part of Fifth Third, we can move at the pace that they expect a fintech to move at. That’s been one of the proudest moments we’ve had at Newline. 

If you look at our clientele, we’re able to keep pace with them on product delivery, product development, and innovation. That’s one of those messages we want to get out to the market.  

Plan of action

  1. Strategy for product innovation and delivery

The way we’ve built and deployed the Newline solutions is that we like to have a single API endpoint for all payments, information, and accounts. Hence, we’ll continue to add functionality to those endpoints, and it’ll be one integration, and then you’ll have all the payment capabilities that exist through the Newline platform. 

Our goal is to make sure that everything that is necessary is available on the Newline platform, and then build the easiest implementation and integration experience for our clients. We try to remove a lot of complexity, so you don’t have to be an expert level software engineer to figure out how to get the integration done. 

  1. Blueprint for improving program management and client experience

We need to have the right tools and technologies to allow the relationship and the partnerships team to really figure out what is that next thing that we’re doing together with our clients. Allow the technology and the automation to exist, and the day-to-day operational experiences to be as streamlined and as efficient as the end user value proposition that we’re helping build with our clients. We are looking to empower the people to do the creative, strategic work, and letting the software handle some of the day-to-day.

To help with this, we do a lot of voice of customer exercises, to understand where some of those improvements can be delivered in the life cycle. We spend a lot of time meeting with our clients to understand the things that they’re trying to do and what information they need to get it done. We also ask how we can give them the information in the way they need and where can we automate certain process steps? So we spend a lot of time with our clients, just understanding what their expectations are, and then how we can drive a better experience on either side of the coin.

  1. Plans for creating more awareness and recognition for Newline by Fifth Third

We will bring more of our software engineering leadership into industry events with us. One of the things that makes Newline unique is that we have our own dedicated revenue organization, run by Dan Dall’Asta who leads the distribution channel for us, which includes traditional bank relationship managers. We have our own product organization led by John Piazza. Christopher Tino runs our software engineering organization. 

So within Newline, we have a dedicated group of professionals, and this is all we do all day long. We’re not bringing in a lead and then handing it off to a different product team or a different technology team. It’s all self-contained within Newline, the client targeting, relationship, onboarding, product development, servicing, support and implementation. 

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The Quarterly Review: Current’s CTO Trevor Marshall reports on Model-Driven Success

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“We want this to be a long term relationship, minimum 5-10 years”: Citi’s Chafic Haddad on how the bank chooses fintech clients and builds evolving partnerships

Choosing the right bank to work with is a skill that fintechs need to develop and nurture. When the right choices are made, fintechs can find themselves working with banks that not only provide a strong compliance and banking layer but also have opportunities for the fintech to plug into the bank’s infrastructure and become more than just a client. 

This evolving landscape is what Citi’s Global Head of Fintech Sales, Chafic Haddad, provided insight on when I spoke to him. He dove into the maturity cycle that fintechs go through by starting from offering basic products like accounts and then eventually growing enough to explore capital markets and investment banking. He also described how Citi helps these fintechs spread their wings beyond their local markets.

Listen to today’s conversation to learn from Haddad’s experience about how the bank helps fintechs grow sustainably and eventually spread their wings beyond their local geographies and the way Citi organizes and manages these relationships.

Big ideas

Chafic’s role: My team’s job is to provide or connect fintechs with what we do within the transaction bank. We’re the business that manages the overall relationship across all Citi products. We have a two fold structure: you’ve got the commercial bank, which would typically look after small to medium sized fintechs, and then the more mature unicorn type fintech would sit within our banking organization.

How Citi chooses which fintechs to work with: We consider a range of factors including growth potential. We have finite resources. We can’t take on everybody and it’s a space that continues to grow and evolve. Growth is key, because we want to be working with entities that have ambitions. Given our network, we’d like to be partnering with fintechs that want to grow beyond their home market.

How Citi’s fintech relationships begin: We want this to be a long term relationship, at a minimum of 5-10 years or even longer. Initially, the entry point is the business that I represent, which is the transaction banking business, or the Citi Treasury and Trade Solutions (TTS) because that is the go to area for any fintech on day one. They want accounts, access to payment schemes, and treasury management.

How Citi collaborates with fintech clients: They [fintech CEOs] have a vested interest in being part of the strategic discussion to work with Citi. This is ultimately their business and their name on the door. Those conversations take place at multiple levels, often starting at the top of the house, and then once we focus or zoom in.

Evolving relationships: Many start off as clients and we collaborate and co-create. But in several cases, they actually come into our ecosystem as providers of service and become clients over time.

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The full transcript

Building on legacy

Whether you play in the merchant acquiring space as a fintech, or you offer domestic cross border solutions or drive FX (foreign exchange) platforms, you need a provider that can give you access to payment channels and schemes, support you with operating accounts, help you manage liquidity, and help you manage and safeguard client monies. And to do all of that while guiding you through the regulatory environment. 

So I would say those are the two or three things that stand out for me in terms of what a fintech really needs from a provider or a banking institution. As a 200 year plus financial institution with international branches in over 90 countries, we believe that we are well-placed to support fintechs, whether they are domestically focused or looking to offer their solutions globally. We’re leveraging our long history as a provider of financial services as well as our global presence to roll out solutions to prioritize a digital, 24/7 approach to payments; advancing the client experience and ensuring liquidity for our clients around the clock.

Our network is unique. We have the largest network today compared to other large multinational banks, and that is something that really appeals to our clients, because it underlines our commitment to the international arena. 

When you deal with Citi, you’re effectively dealing with the institution that’s plugging you into one platform. The model is similar wherever you do business in New York, London, Tokyo or Sydney. The products and solutions are more or less the same.

I say ‘more or less’ because there are some differences that are driven by local regulation, but effectively, we can be your one stop shop. As far as a global strategy is concerned, we talked about how Citi supports fintechs around the world, but there is also collaboration or co-creation that Citi has entered into with a number of fintechs to come up with solutions that are now offered as mainstream. 

One example of that is our Pay-to-China offering. If you think about Chinese merchants that are selling online overseas, one of their challenges is collecting funds. So the Pay-to-China offering at Citi enables offshore payment intermediaries to pay directly into their merchant’s local currency bank accounts in China for goods that have been sold online or overseas through e-commerce platforms. It’s a solution that leverages our FX capabilities and access to domestic payment schemes in China to provide a seamless cross border payment experience. 

Another example is our Spring by Citi® offering, which is our acquiring engine and digital payment acceptance solution. It’s also an example of how we’re collaborating and co-creating with ecosystem fintech partners to roll out this offering in multiple markets.

One more example is Citi® Payments Express, which is our 24/7 cloud-enabled digital commerce solution. It’s a solution that facilitates multi-domestic and real time liquidity and gives us the opportunity to scale to 100 times the volume while operating at much lower costs. We’re looking to roll out Express in the top global markets in the next few years.

Fintech priorities: Growing beyond local borders

Fintech entities that we’ve been in business with for a number of years are now looking to grow, – if they haven’t already done so – beyond their home market. That is typically driven by both a need to support existing customers who are doing business in multiple markets, as well as opportunities to acquire new ones. 

The other interesting dynamic is that many set out to offer a single product. We will be your FX partner and we will help you acquire if you’re selling in marketplaces. Now we’re seeing those same entities develop and sell more than one solution. In order for them to expand their product offering, some have even gone as far as acquiring banking licenses, and that has allowed them to get into the deposit-taking space and lending space, as well as do other regulatory-focused products.

On working with Citi 

So one thing that we’re very keen on is we don’t simply want to be a provider of service. That is something that typically kickstarts the relationship. But over time, we want to co-create with the fintech clients that we do business with. That means we sit together, understand what their strategic objectives are, how they envision their strategy to be over the next three to five years, and then work with them in building the products and solutions to get them there. 

We typically connect at various levels of the organization. Unlike some other sectors, you’ll find that in the fintech space, a lot of the CEOs are owners and operators. They have a vested interest in being part of the strategic discussion. This is ultimately their business and their name on the door. Those conversations take place at multiple levels, often starting at the top of the house, and then once we focus or zoom in on an idea or an innovative solution, that gets focused with the people at various levels.

What’s interesting about our relationships with fintechs is they’re quite dynamic. Many start off as clients and we collaborate and co-create. But in several cases, they actually come into our ecosystem as providers of service and become clients over time. It’s a dynamic space. There are opportunities for us to plug into one another’s capabilities. 

One example of that is we have a cross currency crossborder platform called Worldlink. Even though we are present in over 90 countries, there are some markets where we are not physically on the ground for one reason or another. So in those instances, we need to find a partner that we can connect with and collaborate with to help us deliver our service on the ground – and those are the kinds of collaborations that take place with some of the fintech clients.

We’re quite deliberate about the fintechs we choose to take on as clients. We consider a range of factors including growth potential. We have finite resources, as you can appreciate. We can’t take on everybody and it’s a space that continues to grow and evolve. Growth is key, because we want to be working with entities that have ambitions. Given our network, we’d like to be partnering with fintechs that want to grow beyond their home market, as I mentioned earlier, and actually have longer term objectives. For us, these relationships are difficult to establish. The onboarding process is rigorous. It requires quite a lot of heavy lifting. 

So once we get over that, we want this to be a long term relationship, at a minimum 5-10 years or even longer. Initially, the entry point is the business that I represent, which is the transaction banking business, or the Citi Treasury and Trade Solutions (TTS) because that is the go to area for any fintech on day one: we want accounts, we want access to payment schemes, and we want treasury management. 

We want help collecting once we plug them into these solutions and we then evolve the conversation into other areas, whether it’s around capital markets or broader investment banking or working capital.

Citi’s evolution to work with fintechs

The capabilities within our network continue to evolve, as we roll out new solutions, and we’re doing that all the time. The ultimate aim is to be able to do that across the network to give you that seamless experience wherever you’re doing business with Citi. That is something that continues to be at the heart of everything that we do. Given the geographic reach that we have, we have expertise at the ground level to guide our fintech clients through the regulatory challenges, local laws, regulations, what to expect and how to go about licensing. That puts us in a unique position. We also have an experienced and dedicated fintech sales team – my role, and that of my teams, is focused exclusively on the fintech segment. 

We don’t talk to anybody else from a client segmentation perspective, unless they fall into our fintech definition. Hence, you’ve got that expertise on the team, that network that allows you to operate globally, and you’ve got the local expertise on the ground. I’d also add that over time, we’ve become a trusted advisor to our clients, so our deep rooted industry expertise enables us to guide our fintech clients as they seek new opportunities, new customer segments and look to grow.

Navigating timezones as a professional

Geography does not matter much when you’re in a global role, because I’m constantly on the road. From a timezone perspective, it works for me, because it gives me a good half day with Asia in the morning, and then as the day goes on, Europe and the UK come online. And then my afternoons and evenings are with the U.S.. So it works from that perspective. 

The way we’re organized is that I have regionals, and they’re located in New York, Miami – which is our Latin Hub – Hong Kong, and Dublin, which is our service European hub. They have individuals that report to their own teams and all of that is part of a wider team which supports our fintech clients and goes out and positions what we do best at Citi to those clients.

Citi’s organizational structure

I sit within the product organization. We also have side by side coverage organizations – what we at Citi call corporate banking – as well as our commercial bank. Commercial banking tends to be the entry point for a relatively new-to-market fintech: these are firms that have been operating for a couple of years, they’re low turnover, but have a good runway ahead of them.

My team’s job is to provide or connect fintechs with what we do within the transaction bank –the business that manages the overall relationship across all products. Citi also hast the commercial bank, which would typically look after small to medium sized fintechs, and then the more mature unicorn type fintech would sit within our banking organization.

I typically would service the fintechs that are more complex and have had several years of history under their belt, that are now at a stage where they have either expanded internationally or are continuing to expand internationally. That’s not to suggest that we don’t connect with our partners on the commercial bank, because what they’re looking after are fintechs at an early stage. But that early stage quickly becomes a later stage, and then there are opportunities for my team to plug into their strategy and provide them with the solutions they’re looking for to continue their growth. 

Disclaimer: The views and opinions expressed by the individual, unless reflected in Citi’s Research Reports, are those of the speaker and may not necessarily reflect the views of Citi or any of its affiliates.  All opinions are made at the time of the recording and are subject to change without notice. The expressions of opinion are not intended to be a forecast of future events or a guarantee of future results.

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Temenos CPTO Barb Morgan on measuring ROI, step by step modernization, and AI-enabled banking

Banks have a challenging time responding to technological leaps like AI primarily because of their compliance-comes-first approach. Financial institutions must also manage the technological debt of their legacy systems when approaching modernization. 

On this episode of the Tearsheet Podcast, Temenos Chief Product and Technology Officer, Barb Morgan, offers a refreshing perspective on how financial institutions can embrace technology while maintaining their human touch. Her insights reveal how banks, particularly regional institutions, are balancing innovation with customer service and regulatory compliance.

Morgan’s approach emphasizes “augmented intelligence” over artificial intelligence, positioning AI as a collaborative tool for these firms. Her view of AI’s potential in this industry stems from her deep experience working with regional and large banks at Temenos, as well as her time at firms like FIS and Capital One. 

The conversation highlights how Temenos is helping banks modernize at their own pace by  offering flexible solutions that can be implemented module by module. It also dives into how these firms are measuring their ROI on modernization initiatives, a must-have in this market. Lastly, Barb shares how her firm partners with its banking clients to work on unique ideas. 

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Industry Changes on the Horizon

Morgan predicts that AI-enhanced customer experiences will soon become standard. “Five years from now, [AI] will be the expectation,” she notes, adding that banks must move beyond simply wrapping digital interfaces around legacy systems to fully integrate their data for AI capabilities.

Data at the center

While many banks have focused on digital transformation, Morgan identifies data integration as the next critical step for institutions looking to leverage AI effectively and deliver modern CX. “As FIs improve the data… the positive outcome will be that they will be able to leverage data differently,” she shares, emphasizing how consolidated data systems will enable banks to better serve their customers and implement new processes and workflows enabled by AI. 

Augmentation not replacement with AI

Morgan envisions AI as a side-by-side agent that enhances customer interactions. “AI should be a side by side agent that offers personalization, offers the ability to create a more human experience,” she explains, noting Temenos’ development of a banking copilot that helps agents understand customers before conversations begin.

Flexibility in Modernization

Understanding that each bank has unique infrastructure needs and technical capabilities, Temenos has developed a multi-option approach to system modernization that accommodates various technical environments and strategies.  “We’re getting great conversations with our clients, almost an appreciation because we understand that doing a full core banking overhaul may not be in their year’s plan,” Morgan says, explaining how institutions can start with smaller, targeted modernization projects before considering a complete core replacement.

Time to live doesn’t have to span years

Lengthy implementation timelines can be a significant deterrent for banks that are thinking of undertaking modernization efforts or deploying new tech like AI. But the Temenos team has developed modular processes that dramatically reduce deployment time. “We had a new bank go live on our core system, and we were able to get them up and adding accounts in less than three months,” Morgan adds. 

Co-Design with Customers

Rather than developing solutions in isolation, Barb says Temenos actively engages with banks through user groups and design partnerships to ensure new features address real market needs and banking requirements. “When we get that momentum and we do a bit of co-design with our customers in our User Group forums, and it becomes obvious whether or not it’s something that we should build and move forward with,” she explains. When a client wants a unique feature or process implemented the company works with its technology partners as well as a group of regional banks to test the efficacy and experience of building such a feature out. 

The following excerpts were edited for clarity

What’s top of mind for banks with tech and AI

Customers are number one, at the heart of what banks are thinking about. Number two is regulatory and compliance. AI is really raising that expectation that there will be new regs and compliance, and it’ll just get tougher. But the growing complexities, new rules, proposals coming forth are definitely top of mind. We’re seeing some of our customers who are actually looking to allocate in the back half of the year. They need to save some funding for those types of initiatives, because they see them coming and if they want to play in the AI space, they have to be ready for it. And then operational efficiencies. When we think about AI it has been around for a long time, but previously, it’s been a lot of chat bot type things, automation of singular processes. 

Successful AI-based improvements stem from investing in data

I think five years from now, AI will be the expectation. So helping banks to be able to create that human experience leveraging AI is going to be critical. I also think we’re going to see this in the data space. We saw the digital transformations happen, and a lot of banks use digital as a wrapper around legacy systems. 

Now what we’re seeing is that data evolution has to occur side by side for them to be able to leverage AI, and so I think we’re going to see them improve the data. We spend a lot of time on this in our conversation with customers. If you have five systems right now, we have to get that data together so that you actually have your full picture. But then the positive outcome of that is being able to leverage data differently. 

AI as a banking copilot

I talk a lot about augmented information, or augmented intelligence, and it often leads us into the conversation around how AI should be a side by side agent that offers that personalization and the ability to create a more human experience. When you call a bank, you’re trying to get something resolved, you get put on hold, then you get transferred to another department. The process just goes on and on. With AI and having that side by side agent to help them, they can gather that data instantly and at speed. 

We’ve been working on a banking copilot, and we have a bit of a private preview right now with some customers.

Customized modernization pathways

By giving that flexibility and choice to our customers, we’re really getting a positive reaction. They say, hey, actually, I’m really happy with my retail banking. It’s great, but I want to up my game in the payments space. Can I just upgrade my payments? The flexibility that either we run it for them in a SaaS environment, so that they can focus on their customers and not infrastructure, or if they have a strong infrastructure team for them to be able to put in their own cloud, and then lastly if they are more comfortable running on premise, that’s okay, too. So it all comes back to flexibility and choice. We’re getting great conversations with our clients, almost an appreciation that we understand that doing a full core banking overhaul may not be in their year’s plan.

How banks measure ROI on modernization initiatives

For many years, banks have really tried to understand the cost of their legacy systems and now, I think they have a better understanding of really what the costs are. We have one of our customers in the US, in particular, who’s saying, we actually want to first go forward with deposits, get that up and running, and be able to actually measure turning off the legacy. And then we’re going to move forward with loan originations. 

What that allows them to do is both – measure and make sure that their flexibility and their customers are taken care of, but also they can really nail down that return on investment of moving forward with their modernization. Sometimes it’s good for them to be able to go to their board and say, hey, look, we did this portion. Here’s what we saw out of it. Now we want to move forward.

How Temenos approaches unique ideas

Making a single one-off customization is not efficient. The way that our applications are built, clients can build on top of their application. So if there’s something that’s truly unique, then we would pair them with one of our trusted partners and have them build out that customization. But oftentimes, when an idea is brought forth, we say let’s go tease this out. Let’s do a bit of a design partnership and get five or six regional banks and see if this is truly regional. And then when we get that momentum and do a bit of CO design with our customers in our user group type forums. 

We have a unique ability to co-design using a couple of very simple questions. Here’s the problem. Did we get the problem right? Yes or no. It’s a very simple process, but you end up with really rich products out of it that you can incrementally roll out, versus spending 12 – 18 months building something. They’re invested from day one and they like seeing that customization come to life. In a way, it’s part of them as well.

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How AI is disrupting financial services and how companies can respond — with Publicis Sapient CEO, Nigel Vaz

Nigel Vaz, Publicis Sapient

As advances in artificial intelligence impact the financial services landscape, banks and financial institutions face a critical inflection point. AI has been a part of banking operations for years, but the emergence of generative AI is creating unprecedented opportunities — and challenges — for innovation and business transformation.

In a wide-ranging conversation on the Tearsheet Podcast, Nigel Vaz, CEO of Publicis Sapient, discusses how AI is fundamentally changing the financial services industry. Nigel shares his deep insights on how financial institutions can navigate this technological disruption, from enabling broader access to wealth management to AI-driven credit models in mortgage lending, and on why some banks are better positioned than others to capitalize on AI’s potential.

Publicis Sapient is a digital business transformation company, focused on helping companies survive and thrive in a world that is increasingly digital. With expertise spanning Strategy, Product, Experience, Engineering and Data & AI (SPEED capabilities), Publicis Sapient helps businesses sustain relevance by adapting to change and capturing value through digital.

In more than two decades with the company, Nigel has acted as a strategic advisor on complex transformation initiatives across industries and geographies, including AI advances in the context of clients’ broader transformation requirements. Nigel is also author of the bestselling business title ‘Digital Business Transformation – How Established Companies Sustain Competitive Advantage from Now to Next’, based on years of partnering with clients to harness the power of digital.

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A New Era of AI in Banking

The financial services industry is experiencing a shift from predictive AI to generative AI, which is creating original content and handling specific tasks to enhance the traditional workforce and accelerate business. As Vaz explains: “We’ve gone from AI in the context of machine learning models to predictive AI to what is now, essentially, creation. Gen AI has brought to financial services the creation of original content, an understanding of natural language and adaptation to tasks that were otherwise considered the purview of people, not machines.”

Data Quality as Foundation

For financial institutions looking to implement AI, having the right data infrastructure is crucial. Vaz emphasizes this point: “Start with ‘What is the state of your data?’ Banks who’ve invested in connecting different data sets and organizations that have leveraged their data infrastructure to build an AI strategy are in a very different place to organizations who’ve simply started with AI implementation.”

Real-World Impact

AI implementations are moving beyond experimentation to delivering tangible business value – through cost-out innovation or growth-oriented value creation. One striking example Vaz shares demonstrates this impact: “In one case, a migration that was scheduled to take 10 years is now being done in three years, and this is from legacy COBOL to Java. These kinds of implementations are creating significant value, not only in the context of time to market but also in how they’re able to take costs out of their business.”

Workforce Evolution

Rather than replacing workers, AI is transforming how financial institutions approach talent and skills development. Vaz believes that upskilling and reskilling initiatives empower employees and ensure organizations remain agile in the face of change: “We often use this frame of learn, unlearn and relearn. More and more in organizations today, the shift in roles is going to need the creation of new roles focused on optimizing AI systems, analyzing data and insights and developing algorithms.”

Future of Financial Services

Looking ahead, Vaz envisions a fundamental reimagining of financial services and how the industry positively impacts people’s lives. He describes a future of democratized financial services: “Rather than an organization essentially trying to sell you a series of products, they will start to provide personalized financial services, where the organization understands that what I’m interested in talking about is not a mortgage rate, but that I’m interested in buying a home. As you start to get that personalized, unique perspective about the person that you’re advising and serving, you create a whole new opportunity to democratize the traditional definition of what it means to be a financial services institution.”

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What BaaS companies learned the hard way in 2024 — and what’s coming next

Is BaaS the land of the dead? Actually, not so much. 2024 was admittedly a difficult time for partner banks and fintechs alike when it came to BaaS. But through the fires of consent orders and lost customer deposits came a realization that all firms involved needed to look more deeply into how they structured their relationships.

Lauren McCollom, SVP and Head of Embedded Finance at Grasshopper, called 2024 an “enlightening and chaotic year” for BaaS players. As consent order numbers climbed into double digits, hitting institutions like Evolve Bank & Trust, Sutton Bank, and Blue Ridge Bank, many fintechs decided they had to pivot and find new partner banks to ensure their programs’ longevity and survival.

On the other hand, affected partner banks had to dig deep into their existing programs and look for weaknesses, while non-affectees saw more and more fintechs queuing up for partnerships. “This fintech outreach wave which fueled pipelines and enabled partner banks to engage with leading fintechs looking for safety and stability in long-term programs with an established partner bank,” said McCollom.

In today’s story, we look at the major challenges partner banks and fintechs faced in 2024 and what trends may emerge in the new year for these firms.

Recap: 2024’s BaaS trials

Here is a top down view of all the challenges partner banks and fintechs faced last year.

The regulators and BaaS programs: One major difficulty BaaS partners faced was dealing with enforcement actions, reconciliation issues born out of underbaked BaaS programs, and a desire by fintechs to build redundancy in their bank partnerships.

“What came from this period in early 2024 were inquiries and clarification questions from fintechs trying to cut through the noise. Overall this permitted the education of the industry and alignment on what ‘direct’ can mean in BaaS,” McCollom added.

Compliance became top of mind and ultimately led to a reinvigoration of compliance technology providers and a deeper look at how these tools could be used to strengthen existing BaaS partnerships in the face of regulatory scrutiny.

On the other hand, fintechs that foresaw trouble decided they needed a change of partners and sought to migrate their programs leading to a few partner banks seeing more traffic. And while this narrowed the number of partner banks operating in the BaaS landscape, those that continued built much stronger foundations in compliance.

Balancing act: Given the regulatory focus on the industry, firms had to carefully manage building better compliance capabilities while looking after the bottom line. “The balancing act of investing in the necessary infrastructure, controls, and capabilities while maintaining a profitability model added further complexity to the equation,” said Richard Rosenthal, Principal at Deloitte.

The solution to evolving BaaS programs to be resilient to regulatory headwinds for many was putting in place the right infrastructure. There is a class of partner banks and fintechs emerging now that focus on implementing the right controls and processes, added Rosenthal.

Expectations and trends for 2025

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The Quarterly Review: Chase’s Chief Design Officer Miki Van Cleave is digging into discovery and building better experiences

Notes from the desk: Welcome to this month’s Quarterly Review, a series where I dive into what executives from some of the best brands in financial services are focusing on in this quarter, as well as how they are planning to achieve their goals. It’s a chance for the industry to learn about what goes on behind an FI’s four walls and how leadership manages their priorities. 

But that’s not all: a review implies no mandates, a check in. So stay tuned next quarter to learn whether the executive achieves her plans and translates theory into reality.

In this edition we will
focus on Miki Van Cleave,
Chief Design Officer
at Chase.

The bigger an organization, the harder it is to ensure that customer and employee experiences speak the same language. One of Chase’s Chief Design Officer Miki Van Cleave’s key objectives is to ensure there is harmony between the firm’s customer and employee experiences. 

Van Cleave assumed the role seven months ago after spending five years as Head of Design for the firm’s CI&A (Customer Identity & Authentication) and Consumer Banking, where she built multiple design teams and worked on creating interconnected experiences.

Before Chase, Miki held several leadership roles at USAA Federal Savings Bank. She ran the bank’s innovation team and designed its auto experience product. 

Today she is here to share how she is strategizing for growth in her new role by breaking silos, digging into Chase’s backend processes, and building more confidence in product delivery and design processes of the firm.

The focus: Growth, codifying discovery processes, and improving employee experiences

I stepped into the role of Chief Design Officer in August 2024, and since then my goal has been to learn as much as I can and hit the ground running, picking up where my predecessor left off. The team achieved so much in 2024, and my goal is to keep up the team’s awesome momentum in delivering great experiences and products to our customers in Q1 2025 and beyond. Some of the key achievements in 2024 include increasing our investment in our teams in India, which has been a multi-year focus, and gaining clarity on our body of work (BOW) and improved team allocations to enable us to work more efficiently. 

Something I am really proud of is that we started a Challenge Coin recognition program in Design & Customer Experience. Inspired by military coins, I hand out Challenge Coins in person to those employees who have been nominated as showing up and willing to help.

1. Enhancing employee experiences: Customer-centric design continues to be at the forefront of our design strategy and we’re constantly working on new ways to enhance experiences for our customers and employees. Employees in our branches and answering our customers’ calls are the lifeblood of Chase, and it’s crucial we equip them with the right tools and resources to do their jobs. The team is so good at their craft, they know the space and know how to deliver great products. The next level of maturity for us will be to raise our business acumen and continue elevating our presence and profile within the design, product, tech, and data teams and business partners.

2. Building up: We’re currently focused on continuing our overall growth, building on what we accomplished in 2024. This includes ongoing conversations to align on a detailed BOW (Body of Work) and broader awareness across the organization’s leadership on driving efficiencies as we grow and evolve the team.

3. Discovery processes: I also want to codify our approach to discovery, which will help to raise our confidence on new product delivery and get alignment with our partners on the ROI of design. We’ve seen success in formalizing other processes and problem-solving approaches, like our “Customer Why Template,” and know there is value in continuing to standardize processes for better collaboration.

Plan of action

It’s important for us to stay focused on our objectives, while continuing to cultivate new ideas.

The key is to avoid being distracted in a fast-moving environment and stay the course.

1.  Working beyond silos: It’s critical that we look beyond our own team to solve problems and come up with new ideas. We want to avoid silos and collaborate with other teams to help us understand and better solve a customer issue. A design challenge isn’t always going to be solved by the design team alone; sometimes we need to enlist the support and ideas of people from product, data and other teams from our Product and Experience and Technology (PXT) organization, as well as customer-facing businesses from Chase’s consumer bank, to help us find the right solution.

2. Understanding the whole experience: Beyond designing new features that help solve a customer pain point, we also want to ensure we’re providing the best overall multichannel experience. This means looking at the customer experience holistically — not just at visible experiences like the mobile app, web or branch — to ensure there are no gaps. We employ Service Design Blueprints to understand how less-visible factors, like how back-end systems, call center policies and scripts, and more may be impacting the customer experience.

We’ve seen success in formalizing other processes and problem-solving approaches, like our “Customer Why Template,” which was an early tool in our discovery processes. We are now creating a more standardized practice for discovery which will help create consistency across the organization. Some of the key objectives are:

  1. Create a common understanding around what discovery means
  2. Establish timelines for how long discovery should take to complete
  3. Increase confidence in a design/product solution on the path to execution
  4. Mitigate risk 

Last month we covered

The Quarterly Review: How Zelle’s GM Denise Leonhard plans on leading the firm to $1 trillion a year and beyond

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The Quarterly Review: Citizen’s Rachel Mattes Greenberg on how her team is sprinting to success in order to meet the bank’s $50 billion Sustainable Finance target

Notes from the desk: Hello and welcome to The Quarterly Review, where I dive into what executives from some of the best brands in financial services are focusing on in this quarter. In the last year, we have surveyed executives from both banks and fintechs about their intentions and goals for the year.
With the new year, I am excited to bring you another “review” in this series. It’s where we compare the exec’s goals with results and see how well her plans stood the test of time.

Our review articles in this series are an exclusive offering for our TS PRO subscribers. If you want to dive into the juicy stuff and read the details of their labors and fruits —beyond the executive summary below— please consider becoming a TS PRO subscriber.

In this edition we will check back in with SVP and Head of Sustainability, Rachel Mattes Greenberg.

Executive Summary: 

When I last spoke to Citizen’s Senior Vice President and Head of Sustainability, Rachel Mattes Greenberg in April, she was laser focused on ensuring that the firm meets the objectives it set in its $50 billion Sustainable Finance target. 

Greenberg and her team had two broad goals for the previous quarters:

i) Ensure transparency and accountability by reporting on the firm’s progress. Greenberg’s team was preparing to launch the bank’s Environmental, Social and Governance (ESG) Report and Climate Report.

ii) Training employees to help them engage with the bank’s high-emitting clients on topics of sustainability. 

Seven months later, Greenberg is here to share what work went into putting the reports together, how Citizens’ hit 100% success on client engagement efforts, and her plans to push both goals even further in the future.

The Full Review: How Greenberg is helping Citizens move closer to its $50 billion Sustainable target – one report and client engagement at a time

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Creators need more than views—they need better financial tools

Banks have generally steered clear of influencer marketing even as some fintechs like Current and Chime have used it to connect more widely to their audiences. And this reluctance to use creators in their marketing is also emblematic of how little traditional FIs understand about this sector. This lack of understanding also seeps into capturing the creator economy as customers  and results in financial products that focus on making creators’ lives easier, being few and far in between. It’s a missed opportunity to connect to a customer base that is grossly underserved, growing rapidly – especially due to the low barrier to entry–, and strongly financially motivated. 78% of people report that being a creator helps them establish financial stability, according to research. And there are loads of issues that a so-inclined FI could potentially solve. Like any other SMB, creators need tools that help run their businesses, as well as ease the process of getting paid. While most big banks now have a healthy suite of products directed at SMBs, the nuances of the creator economy like unpredictability of payment and diversified income streams, warrant a dedicated strategy.

Source: Mastercard

Why FIs have been reticent

It won’t be wrong to say that what makes creators different from normal SMBs is also what makes them harder to build products for.

Influencers don’t fit existing molds: “Traditional banks are not engaged in building products for creators due to the instability of creators’ income streams. Banking business models are generally built around servicing “stable” customers, such as salaried employees or established businesses. They may view creators as higher-risk clients because it is difficult to apply traditional financial models like credit scoring, lending, and financial planning to them,” said Tachat Igityan, CFO and Founder of destream, a financial platform for content creators.

Tachat Igityan, CFO and founder,  destream

They have varying needs: Veteran Youtuber Hank Green, author and founder of Subbable, a crowd sourcing platform that was sold to Patreon, has expressed how hard it is to build products for this segment, having considered to build one himself during the years when VC funding was at its highest:

“Creators are so diverse in their needs that, to create a product that is scalable — and that doesn’t cost a ton of money trying to individualize itself for each individual creator — you end up creating a bad product,” said Green. Powerful platforms: Apart from the diversity inherent to this segment, building products for influencers is made more complicated by the power social media platforms hold in the lives of content creators. Even for Youtubers as skilled, famous, and experienced as Green, the exact amount of money they make on a particular platform can sometimes be unclear. “It’d be nice if I knew how much money I made. I have no idea, it hasn’t updated since January. It’s broken. It thinks I’m British. It’s paying me in pounds,” he said earlier this year.

Hank Green, Youtuber, Founder of Subbable

Why creators need FIs to act

Given that financial motivations are a top driver for most people to enter the creator economy, the lack of financial products keeps them from enjoying the fruits of their labor. Payments are at the heart of it all.

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