Ever since cloud migration first started to displace on-premises solutions for core banking architectures, banks have approached modernization initiatives as primarily a story of cost optimization, scalability and resilience. Contracts were negotiated around storage tiers, uptime guarantees, and predictable compute usage. Those agreements reflected a world where workloads were largely transactional and covered payments processing, customer databases, risk models running on scheduled cycles.

That world no longer exists, and the agreements underpinning financial infrastructure may already be outdated.

The reason, of course, is artificial intelligence. As the Monday (April 27) earnings call from Customers Bank showed, with the lender’s CEO using an AI avatar to host the first part of investor call, AI isn’t going anywhere except closer to the core of banking. That trendline was emphasized separately by the news that the Dutch Central Bank was breaking with Amazon Web Services (AWS) for a homegrown IT provider in large part due to data sovereignty and AI concerns.

Running AI inference and scaling privacy-critical data pipelines can require far more compute, and far tighter integration, than traditional workloads. Against this backdrop, control over data and AI capabilities can matter as much as price for how core banking infrastructure is bought, governed and scaled.

See also: Earnings Show Banks Turning Transaction Banking Into a Platform Business 

AI Is Reshaping the Economics of Compute and Control

AI is not just another application layer. It is becoming the organizing principle for how data is processed, analyzed and monetized. That shift is forcing banks to reconsider where their data lives, how it moves, and who ultimately controls the intelligence derived from it.

Legacy cloud agreements weren’t necessarily designed for AI training workloads, stricter regulatory scrutiny, or growing geopolitical pressure around data sovereignty. Institutions that once viewed cloud providers as utilities are discovering that their agreements may constrain how, and how fast, they can deploy AI.

Legacy cloud agreements often assumed a more siloed architecture. They did not anticipate the need for continuous data flows across multiple systems and providers. As a result, banks are encountering friction as they try to build AI-driven platforms on top of these foundations.

“Legacy core is an impediment to innovation,” PYMNTS CEO Karen Webster noted during a recent conversation with Kathleen Pierce-Gilmore, senior vice president and global head of issuing solutions at Visa, as part of the “The Edit” series.

“If you don’t have well understood, well-managed, well-governed data, it’s going to be really hard to use AI,” Pierce-Gilmore said. “I would put my whole life savings on the modernization of infrastructure.”

Citigroup, for example, has reportedly increased its global AI market forecast amid rising enterprise adoption. The banking giant now expects the worldwide AI market to exceed $4.2 trillion by 2030, with nearly half of that total — $1.9 trillion — related to enterprise AI.

See also: CFOs Are Flying Blind on Counterparty Risk as Cross-Border Uncertainty Spikes 

Future of Core Banking Infrastructure

The battleground is shifting from infrastructure provisioning to ecosystem orchestration. Banks are seeking partners who can support this shift, but they are also recognizing the need to retain greater control over how their systems are connected.

In legacy cloud contracts, banks often ceded a degree of control in exchange for convenience and scalability. Data was stored and processed within provider ecosystems, with integration managed through proprietary tools. For traditional applications, this trade-off was acceptable. For AI, it is problematic.

Data sovereignty is emerging as a particularly critical issue. Geopolitical tensions and evolving regulatory frameworks are pushing banks to ensure that sensitive data remains within specific jurisdictions. This requirement can conflict with the global architectures of major cloud providers, which often distribute data across regions for efficiency and resilience.

Data in the “Global Payments Tracker Series” report by PYMNTS Intelligence, “Moving Money Forward: The Power of Payment Hubs,” showed that 60% of banks have implemented payment hubs or are in the process of doing so.

There is also a growing focus on exit strategies. As the importance of AI increases, so does the risk of being locked into a single provider’s ecosystem. Banks are seeking terms that allow them to move workloads, access their data, and adapt to changing technology.

For banks, the challenge is to align their infrastructure with their AI ambitions. This may require not only technical innovation but also a rethinking of the agreements that underpin their systems.

“While most U.S. banks focus digital solutions on retail consumers or large commercial enterprises, many SMEs lack a platform tailored to how owners and growing teams manage their everyday banking,” the lender said in a Monday (April 27) news release.

BMO says its offering addresses these needs with things like commonly used payment options and simplified user management, and clearer cash-flow visibility.

“Small and midsized businesses have long been underserved by traditional commercial banking solutions,” Derek Vernon, head of North American treasury and payment solutions at BMO, said in the news release.

“This new streamlined, intuitive experience that helps business owners quickly see their cash flow, complete everyday payments and keep their day-to-day workflow moving as their businesses grow.”

The launch follows a release of the platform in Canada in 2024 and a more limited U.S. release, BMO added.

Research by PYMNTS Intelligence shows that 39% of small and medium-sized businesses (SMBs) function with less than a month’s operating cash at the ready, which makes them highly vulnerable to even slight interruptions to their payment cycles.

“When receivables are delayed, a ‘failure cascade’ begins: a single late payment can force an owner to postpone payroll, incur late fees from vendors, or turn to high-interest emergency borrowing,” PYMNTS wrote earlier this month.

“To break this negative feedback loop, SMBs are increasingly leveraging real-time payments to transform their accounts receivable from a back-office burden into a strategic tool for immediate decision-making.”

The effect of payment delays is rarely confined to one line on a business’ ledger, the report added. Inefficient or inconsistent cash flow was mentioned by 43% of SMBs as the chief obstacle to qualifying for financing, as lenders can see irregular inflows as an indicator for heightened risk.

This lack of liquidity can lead to a domino effect: 63% of business owners report missing expansion opportunities because of late payments, and 51% point to high operating costs as a compounding strain when funds are delayed.

“The cumulative financial toll can be significant,” the report added. “SMBs estimate an average annual loss of $39,406 directly tied to delayed payments, with one in 10 reporting losses exceeding $100,000. Beyond the raw numbers, these delays severely erode SMBs’ reputations: 26% of SMB CEOs admit that slow payments have led to the termination of relationships with buyers or suppliers.”

Aiming to become “one of the first AI-enabled regional banks in the United States,” Customers Bank will leverage OpenAI’s advanced models to reimagine its lending, deposit and payment lifecycles, it said in a Monday (April 27) press release.

This will build upon a relationship that begin in 2023 when Customers Bank deployed ChatGTP Enterprise. Now, the collaboration will include direct onsite engagement with OpenAI’s technical teams and resources, with the companies working together to build custom AI capabilities on the Customers Bank’s own processes, data and institutional knowledge, according to the release.

The companies will start with three areas in which they see the greatest opportunity: lending, with AI handling document collection, credit memoranda preparation, legal documents, post-closing portfolio and collateral monitoring and similar tasks; deposits, where AI will streamline digital onboarding and account setup; and payments, where AI will accelerate the capabilities of Customers Bank’s proprietary payments platform, cubiX.

Customers Bancorp President and CEO Sam Sidhu said in the release that Customers Bank has spent the last year building the operational and governance infrastructure to deploy AI at scale, has 75% of its team members using tools powered by OpenAI, and now expects “a fundamental re-engineering” of how the bank operates.

“This strategic collaboration with OpenAI gives us the frontier models, engineering expertise and ability to co-create a roadmap toward becoming an AI-native bank,” Sidhu said. “This strategic engagement positions us to be the leader in AI adoption among regional banks. By the end of 2026, our bankers will spend more of their time on the work that creates value for clients and our shareholders.”

OpenAI said in March that its enterprise business now makes up more than 40% of its revenue and is set to reach parity with its consumer business by the end of the year.

In February, OpenAI said it now offers both a platform and the services of human engineers to help enterprises use AI agents. The platform, Frontier, helps enterprises build, deploy and manage AI agents.

Now, First Citizens says it’s time for an SVB rebrand, according to a Thursday (April 23) news release.

Starting in the fourth quarter of this year, Silicon Valley Bank will be divided into two units: First Citizens Innovation Banking and First Citizens Fund Banking.

CIT Commercial Services, a working capital financing provider acquired by First Citizens in 2022, and the Silicon Valley Bank Wine division will rebrand as First Citizens Bank, the bank said in its announcement.

“Following our acquisitions of CIT and SVB in 2022 and 2023, our clients have seen that their tailored experience has been retained under First Citizens for the last several years, and that is not changing,” First Citizens Chairman and CEO Frank Holding, Jr. said in the release.

“Our brand strategy is aligning with our business strategy and another sign of our long-term commitment to the innovation economy and the private equity sector. The experience we offer will stay the same. Only the names will change, and we continue to invest in our capabilities to make the experience for our clients even better.”

SVB was taken over and shuttered by the California Department of Financial Protection and Innovation in March of 2023 after the regulator found “inadequate liquidity and solvency.”

The department appointed the Federal Deposit Insurance Corporation (FDIC) as the bank’s receiver, and the FDIC reached an agreement with First Citizens, which bought $72 billion worth of SVB’s assets for $16 billion.

In the days leading to the takeover, Silicon Valley Bank had been faced  with customer withdrawals and plummeting stock prices after it incurred a $1.8 billion after-tax loss on the sale of its investments, and some investors became uneasy about its liquidity.

Meanwhile, the Federal Reserve has commissioned a third-party review of SVB’s collapse, Federal Reserve Vice Chair for Supervision Michelle W. Bowman said last month.

Speaking in an interview on Fox Business’ “Mornings with Maria,” Bowman said there was evidence of issues with the bank’s condition as early as 2022, and that those issues were included in the regularly published regulatory reports by the Federal Reserve.

“So, I think what happened there was really a failure of supervision and a failure of bank management,” Bowman said. “So, actually, we’ve just hired an external review to be conducted on all of the events that led to the failure of Silicon Valley Bank to ensure that we don’t repeat the same mistakes going forward.”

Her comments echoed the findings in the Fed’s 2023 post-mortem on the collapse, which said SVB “failed because of a textbook case of mismanagement by the bank.”

“The U.S. consumer remained healthy, and the overall economy remained resilient through the first quarter,” CEO Richard Fairbank said during the earnings call Tuesday (April 21), adding that income growth is still outpacing inflation and that “consumer spending remained robust,” even as energy prices and geopolitical tensions begin to cloud the outlook.

Capital One’s card franchise continues to expand, supported by steady purchase activity and improving credit trends. At the same time, management is watching closely for signs that higher fuel costs or broader macro shocks could alter behavior.

The earnings materials and commentary from the call indicated that, excluding the impact of the Discover deal, card volumes were up 8% year over year.

Within cards, performance trends suggest a consumer that is still managing obligations. Charge-offs rose modestly on a sequential basis but largely followed seasonal patterns, while delinquency rates moved lower. As noted here, the net charge-off rate was 5.1% in the most recent period, down from 6.2% a year ago.

Auto lending tells a similar story. Losses ticked higher on a year-over-year basis, reflecting a somewhat greater mix of subprime borrowers, but performance remains close to pre-pandemic norms. Vehicle values and recent originations continue to support portfolio stability, even as underwriting has become more cautious in certain segments.

Revenue declined modestly from the prior quarter, while earnings fell short of expectations, in part due to integration-related costs tied to Discover.  Investors sent the shares down about 2% in after-hours trading on Tuesday.

Integration, Investment Shape Outlook

The Discover acquisition remains the defining strategic thread. The integration is progressing, including the migration of debit customers onto the Discover network and the early stages of moving card originations onto Capital One’s platform. Yet that process comes with trade-offs. A temporary slowdown in Discover card growth, driven by earlier credit tightening and ongoing system transitions, is acting as a near-term headwind.

Fairbank described it as a “brownout” period, marked by restrained originations but stronger credit outcomes. The expectation is that once integration is complete, Capital One can reaccelerate growth using its own underwriting models and marketing engine.

That longer-term view is tied closely to the company’s technology strategy. Capital One continues to frame itself as an information-based business, built on a fully cloud-based infrastructure designed to support large-scale data processing and AI. The company is investing in AI capabilities embedded directly into its operating systems, rather than treating them as standalone tools.

AI in the Ecosystem

“All companies will be able to take advantage of AI, but the leverage is vastly greater when AI is embedded in the company’s ecosystem,” Fairbank said during the call, pointing to the firm’s multiyear effort to rebuild its technology stack around data and real-time decisioning.

Those investments extend beyond cards. The recently closed Brex acquisition is intended to accelerate Capital One’s position in business payments, while the decision to bring its travel platform in-house reflects a push to control more of the customer experience. Both moves add to expenses in the near term, even as they are framed as necessary for future growth.

Marketing spend is also set to increase over the course of the year, particularly in cards and consumer banking, as the company seeks to deepen relationships with higher-spending customers and expand its national digital banking footprint. Management indicated that first-quarter marketing levels were seasonally lighter, with spending expected to increase as the year progresses.

Capital One has offered limited formal guidance, but CFO Andrew Young and Fairbank underscored that the company continues to expect its long-term earnings profile to align with initial expectations tied to the Discover deal.

“Our expectation is that the earnings power on the other side of the Discover integration remains consistent with what we outlined at announcement,” Fairbank said, pointing to a combination of synergies, platform scale and continued investment as the drivers of that outlook.

 

Here’s how the everyday test works, because a bank account isn’t really a primary account until it passes this test: the customer’s paycheck lands there, the account pays the rent and the utilities and the subscriptions, the debit card swipes at the grocery store and money moves in and out of it as easily as it moves in and out of a phone wallet.

An account that fails this test, even one that’s been opened and initially funded, ends up as a dormant placeholder, holding one stale deposit and generating no real engagement. The industry has largely solved digital account opening and even initial funding; what it hasn’t solved is account activation, getting the account to become the one a customer actually uses every day.

A simple technology solution is only part of the answer. New PYMNTS Intelligence research found that 55% of community bank decision-makers say they’ve fully modernized their technology stacks, yet many of the accounts these banks open fail to become primary relationships. However, many community banks, while confident in their modernization efforts, lack the payments capabilities needed to support continuous engagement. This gap between perceived readiness and actual payments functionality is emerging as a key constraint on growth after funding. In this environment, payments are not just a feature of the account; they are what determine whether the account achieves primacy with any new customer.

Three ingredients have to line up for an account to pass the everyday test.

One: The first is that income has to go in. The single biggest signal that an account has passed the test is that the customer’s paycheck or gig income is deposited directly to it. Once direct deposit is set up, the customer reorganizes the rest of their financial life around that account, such as bill pay, automated transfers and debit card activity, because that’s where the money lives. Without direct deposit, the customer has to manually push money in, and the account becomes an afterthought.

PYMNTS Intelligence data shows consumer use of instant payments for income surged from 15% in 2020 to roughly 45% by May 2025, and the workforce is increasingly nontraditional: about 1 in 3 millennials and nearly half of Gen Z consumers earn core income from gig work, tips or selling products online. If a bank can’t receive that income smoothly, ideally instantly, it loses the primary relationship before it ever has one.

Second: Money also has to come out easily, and this is the piece most often underestimated. Consumers now hold multiple accounts across banks, neobanks, P2P apps and wallets, and they route their funds to whichever one moves money most easily. PYMNTS Intelligence research found that nearly 6 in 10 recipients who try instant disbursements once make it their preferred way to receive money going forward.

An account that feels like a vault with slow check holds — no Zelle, no instant external transfer and added friction on debit card use — won’t be the one people choose to fund, because they correctly sense that getting money back out will be harder than at their primary bank. The Federal Reserve’s Survey of Household Economics and Decisionmaking (SHED) reinforces this. Among consumers with a bank account, 17% are underbanked, and 15% of those have problems accessing funds in their accounts, compared to only 5% of fully banked consumers. Access friction is itself a deposit driver, in the negative direction.

Third: Everyday spending has to happen. Paycheck in, rent and card swipes out, Zelle to a friend on the weekend, this pattern is what creates the balance stability and the interchange revenue that makes a retail deposit relationship economical. An account without this pattern is paying acquisition cost with nothing to offset it.

Account Opening Is Key

People open community bank accounts for a specific reason. They range from a local CD rate, a mortgage or small-business loan relationship, a family referral or technology features. According to PYMNTS Intelligence’s most recent survey of community banks and credit unions, across the suite of tools and features offered by community banks, some features like mobile banking (100%), online banking (99%) and call center support (96%) are table stakes. Card transaction management, planning and budgeting tools, biometric authentication and mobile wallets all sit at or above 84% adoption. These figures reflect sustained, deliberate investment in the capabilities that members have historically ranked as essential.

Small and medium-sized businesses (SMBs) have different reasons. PYMNTS Intelligence finds 38% of SMB members are at least slightly likely to leave their credit unions within the next year, signaling a meaningful pool of at-risk relationships. It also found 70% of SMBs that switched institutions prefer digital onboarding, showing how central self-service and speed have become in winning new business accounts.

Many community banks still run on batch-based cores with fragmented payments capabilities. Only 24% of community banks currently receive FedNow instant payments, and just 9% send them, according to the 2024 CSBS Annual Survey of Community Banks, though another 44% plan to add receive capability within a year. Without instant receive, the bank can’t credibly land a customer’s gig income or same-day tips. Without instant send or modern P2P, the bank can’t be the account a customer uses to pay a friend or push funds to a brokerage.

In this scenario, both ends of the everyday test get weaker at once.

Regulatory Friction

Regulations add another layer of friction at exactly the wrong moment. Under the Expedited Funds Availability Act, banks may legally hold checks deposited into accounts opened in the last 30 days for up to seven to nine business days, and may extend holds on large deposits (over $6,725) or checks of doubtful collectability. From a safety-and-soundness standpoint this is entirely reasonable. From the customer’s standpoint, during exactly the window where the account is being evaluated as a potential primary relationship, the money “isn’t really there,” which pushes the customer back to the account that works on Day 1.

The everyday test is also a funding-cost problem. The Federal Reserve Bank of Kansas City (April 2024) found that community banks are more vulnerable to deposit outflows than larger institutions because they are more dependent on deposit funding and have limited access to broader wholesale funding markets.

Since the Federal Open Market Committee’s 2022 rate hikes, community banks have had to shift toward longer-maturity time deposits and borrowings from the Fed’s discount window and Bank Term Funding Program. All of these are more expensive and less stable than core transaction deposits. The 2024 CSBS Annual Survey reported that 59% of community bankers ranked the cost of deposits as inflation’s single most impactful effect on their bank. FDIC Quarterly Banking Profile data through Q4 2025 shows domestic deposits rising for six consecutive quarters, with community-bank domestic deposits up roughly 5% year-over-year as of Q2 2025, a meaningful improvement.

But community bank net interest margin in Q1 2025 (3.46%) remained below the pre-pandemic average of 3.63%, meaning the cost of holding deposits is still pressing on earnings. Every account that fails the everyday test is acquisition cost without offsetting revenue, and it forces the bank to replace that lending capacity with pricier wholesale funding. For an industry that originates roughly 35% of U.S. small-business loans and 70% of agricultural loans (FDIC), that is not a trivial margin issue.

Banks don’t fail the everyday test out of carelessness. They fail it because the safeguards that prevent loss also create the friction that kills engagement.

New-account fraud, first-party fraud, synthetic identity fraud, check kiting and money-mule recruitment all show up disproportionately in freshly opened accounts. PYMNTS Intelligence found that 26% of community banks cite fraud concerns as the primary barrier to implementing faster-payments capabilities. The same real-time rails that would let a customer instantly receive their paycheck and push funds to Venmo also give a fraudster a way to drain an account before a bad deposit can be clawed back. Holds, deposit limits and funding-source restrictions exist precisely because of this tension, and they also suppress the activity the bank needs.

Passing the Test

The everyday test requires holding both sides at once: modern payment rails on the front end, paired with smart, layered fraud controls including device intelligence, identity verification, consortium data and behavior monitoring that don’t impose blanket friction on legitimate customers.

The emerging playbook for community banks centers on making every part of the everyday test work.

• On the money in/account funding side, banks are prioritizing FedNow and RTP receive capability, integrating with gig platforms and payroll providers, and proactively prompting direct-deposit switches at account opening rather than leaving customers to set it up themselves.
• On the money-out side, they’re embedding Zelle and P2P, enabling instant external transfers, and tightening ACH and card-network experiences so that money moves out of the account as fluidly as out of a neobank wallet.
• On the everyday activity side, they’re leaning into debit card incentives, relationship-tiered rewards, and cross-sell from existing loan or CD relationships into checking, converting a single-product customer into a full one.

Where internal technology investment isn’t feasible, FinTech partnerships close the gap. Firms such as Ingo Payments (which acquired Deposits Inc. in late 2024), Jack Henry and deposit-aggregation services plug modern money-movement rails onto legacy cores without requiring a full re-platforming project.

The community bank deposit challenge is really a test-passing challenge. An account that receives income, moves money out easily and supports everyday spending will get funded, stay funded and generate stable deposits at a reasonable cost.

An account that fails any one of those three requirements will drift into dormancy no matter how elegant the onboarding experience was. Rebuilding deposit growth at community banks means rebuilding the everyday test, end to end.

Banks’ legacy core systems were built to prioritize stability, accuracy and scale, and they still deliver on those goals. But as banks attempt to modernize, digitize and incorporate artificial intelligence (AI) into everyday operations, those same systems are increasingly limiting what institutions can do and how fast they can do it.

“Legacy core is an impediment to innovation,” PYMNTS CEO Karen Webster noted during a recent conversation with Kathleen Pierce-Gilmore, senior vice president and global head of issuing solutions at Visa, as part of the “The Edit” series. What has changed, Pierce-Gilmore said, is how visible and costly that constraint has become.

AI Turns Infrastructure Into a Business and Risk Issue

Artificial intelligence (AI) has raised the stakes for infrastructure decisions. AI depends on timely, governed access to data — something with which legacy, batch-based environments struggle.

“If you don’t have well understood, well-managed, well-governed data, it’s going to be really hard to use AI,” Pierce-Gilmore said.

In many banks, data is fragmented across systems, limiting real-time use. Pierce-Gilmore referred to those silos as “data prisons,” where information is trapped inside infrastructure and cannot easily be mobilized for analytics, personalization or compliance.

That limitation affects far more than customer experience. It also shapes how banks evidence controls, monitor activity and respond to regulatory inquiries in an AI-driven environment.

Regulatory expectations are tightening just as banks attempt to move faster. AI adds new complexity to long-standing requirements around data usage, transparency and governance.

Pierce-Gilmore noted that regulators themselves are still working through how to oversee emerging technologies. That uncertainty makes infrastructure choices more consequential, not less. Banks must be able to explain how data flows through systems, how decisions are made and how controls are enforced, even as AI models evolve.

The result is a compressed timeline. Banks are no longer debating whether modernization is necessary. They are deciding how to modernize without increasing risk or creating new forms of technical debt.

“I do think there is a greater sense of urgency than ever,” Pierce-Gilmore said.

Unlocking Data Enables Real-Time, Compliant Engagement

Unlocking data embedded inside infrastructure allows banks to move from static processes to real-time engagement. When events can be consumed as they occur, banks can respond with timely alerts, personalized offers and more accurate risk management.

Pierce-Gilmore offered a straightforward example: a cardholder pays down a balance and immediately sees available credit update, receives a relevant alert and is presented with a promotion tied to that action.

“You can do that in a much more seamless and relevant way if you’ve got the data at the time that it’s happening,” she said.

Batch processing makes those experiences difficult. Real-time event streaming makes them possible, and also auditable.

Future-Proofing Is Now a Requirement

Infrastructure decisions made today must accommodate technologies and regulations that do not yet exist. Pierce-Gilmore stressed that banks can no longer modernize with a fixed end state in mind.

“We just don’t know today how data is going to be used or how additional layers of technology are going to be built out,” she said.

That uncertainty places a premium on modularity and configurability. Systems must be flexible enough to adapt as AI use cases expand and as regulators clarify expectations, without locking banks into rigid architectures that become the next generation of legacy.

Speeding Innovation’s Time to Market

One of the most acute challenges banks face is time. Many institutions want to launch new products or experiences but face technology queues that stretch multiple years.

Pierce-Gilmore described scenarios where issuers are “desperate to get a new product to market” but are blocked by core system backlogs. Waiting for full modernization is often not an option.

Visa’s approach allows banks to move forward without ripping out existing infrastructure. Capabilities can be deployed on a standalone basis or layered alongside existing systems, enabling faster launches while deeper transformation continues in parallel.

Why Pismo Matters More Than Ever

Pismo sits at the center of that strategy. Its real-time event streaming and flexible issuing capabilities allow banks to modernize incrementally, aligning infrastructure changes with immediate business priorities.

Rather than forcing banks into an all-or-nothing transformation, Pismo supports targeted progress—whether launching a new digital product, improving servicing or enabling real-time engagement.

Crucially, Pismo also supports operational readiness. Real-time infrastructure only delivers value if banks can consume and act on events across servicing, risk and compliance functions.

Visa’s Modular, Ecosystem-Scale Approach

Visa’s infrastructure strategy reflects its scale across tens of thousands of issuers globally. Rather than selling isolated features, the focus is on modular components that can be combined to deliver measurable outcomes.

“Our clients don’t want to buy features and functionality,” Pierce-Gilmore said. “They want to buy outcomes.”

That approach allows Visa to act as what Pierce-Gilmore termed a force multiplier, applying lessons learned across markets and regulatory regimes to help banks modernize more efficiently and responsibly.

A Clear Direction of Travel

Legacy cores may still keep banks running, but the ability to unlock data, operate in real time and adapt to AI and regulatory change will determine which institutions can compete—and which remain constrained by the systems they rely on most.

Pierce-Gilmore weighed in confidence. “I would put my whole life savings on the modernization of infrastructure,” she said.

PYMNTS CEO Karen Webster is one of the world’s leading experts in payments innovation and the digital economy, advising multinational companies and sitting on boards of emerging AI, healthtech and real-time payments firms, including a non-executive director on the Sezzle board, a publicly traded BNPL provider. She founded PYMNTS.com in 2009, a top media platform covering innovation in payments, commerce and the digital economy. Webster is also the author of the NEXT newsletter and a co-founder of Market Platform Dynamics, specializing in driving and monetizing innovation across industries.

The bank is seeking a banking license in Saudi Arabia and is preparing to open a regional headquarters in the country later this year, Venkatakrishnan said in an interview with Bloomberg TV.

“Those plans are in place, and we remain as committed as ever to the Middle East,” he said.

Barclays had left Saudi Arabia more than a decade ago but returned to the country last year, Bloomberg reported Thursday.

Saudi Arabia and the United Arab Emirates (UAE) have been working to de-risk themselves from oil dependence by diversifying their economies, Venkatakrishnan said.

“The attractiveness of the UAE, the strength of the Saudi economy, will continue to be strong,” Venkatakrishnan told Bloomberg TV. “I think investors will appraise those risks that are happening now, but I think the sooner this war comes to an end, the easier that statement is to make.”

Asked if the turmoil around the war in Iran could impact the large initial public offerings (IPOs) that are planned for this year, Venkatakrishnan said that is unlikely.

“Not in a structural sense,” he said. “It could affect timing, you know, do you go this week or a month later. But the companies you’re talking about—let’s just take one of them, SpaceX—these are remarkable companies that have been built offering important, real products to the global economy, and the capital they’ll get from an IPO is meaningful.”

Barclays announced in October that it was strengthening its presence in the Middle East after gaining a provisional Capital Market Authority license in Saudi Arabia, which paved the way for the bank to begin investment banking and global markets activities, and securing premises in Riyadh to open an office in 2026.

The bank was already operating in the UAE and Qatar, it said at the time in a press release.

“Expanding our Investment Bank capabilities in the Kingdom is a significant milestone for us as we continue to grow our regional footprint in key markets,” Venkatakrishnan said in the release.

The Independent reported in October that Barclays left Saudi Arabia about 11 years ago at a time when a former chief executive was cutting thousands of jobs, exiting “non-core” businesses and focusing on regions where it had a greater competitive advantage.

The BCS was initially announced in June 2025 and was launched Wednesday (April 8), the Montréal Exchange said in a Tuesday press release.

It offers market participants a credit derivatives contract that serves as a tool to trade and manage Canadian credit risk, according to the release. It is based on a new FTSE Canadian Bank Credit Spread Index, with the contract isolating the credit spread component of a portfolio of Canadian bank bonds, the release said.

“Combining our premier derivatives franchise with FTSE Russell’s expertise in index-based solutions allows us to provide a tailor-made and transparent Credit product for our clients,” Robert Tasca, managing director, derivatives products and services at the Montréal Exchange, said in the release. “The launch of BCS Futures marks a natural progression from our current yield curve Futures, delivering the Canadian hedge the Credit space has required.”

Anthony Farinaccio, head of Canadian investment grade credit trading at TD Securities, said in the release: “Credit futures offer a practical, efficient way for investors to hedge Canadian credit risk. They provide transparent, scalable risk transfer for institutions, with exchange-traded contracts that simplify execution and reduce operational complexity.”

Alan Bogos, managing director and head of global IG credit trading at BMO Capital Markets, said in the release: “The BCS contract could prove beneficial for those looking to add beta and manage financial sector exposures. The underlying basket represents a clean and clear liquid subset.”

When announcing its plans to launch the FTSE Canadian Bank Credit Index Futures in a June 2025 press release, the Montréal Exchange said this credit derivatives product would be the first of its kind and would meet the evolving needs of market participants.

The Montréal Exchange’s parent company, TMX Group, reported in a February press release that TMX delivered a 16% year-over-year increase in revenue in the fourth quarter, bringing its total revenue to a record $457.8 million. The company attributed its gains to its adaptations to meet the evolving needs of clients.

In a report issued Wednesday (April 8), the Council of Economic Advisers (CEA) addresses an issue that has held up pending cryptocurrency legislation: the idea that cryptocurrency platforms that offer a yield on stablecoins could cause a deposit flight from banks.

The CEA report argues that banning these rewards under the CLARITY Act would only lift traditional lending by 0.02%, with 76% of it coming from larger lenders and the remaining 24% from community banks.

Assuming the economists’ worst case assumptions, the model used by the CEA produces $531 billion in additional lending, or a 4.4% increase in bank loans. That figure would require the stablecoin market to expand at around six times its current size as a share of deposit, “all reserves to be locked in unlendable cash rather than treasuries,” and the Federal Reserve to jettison its current monetary framework.

“Even under those implausible conditions, community bank lending only rises by $129 billion, corresponding to an increase of 6.7%,” the report said. “The conditions for finding a positive welfare effect from prohibiting yield are similarly implausible. In short, a yield prohibition would do very little to protect bank lending, while forgoing the consumer benefits of competitive returns on stablecoin holdings.”

The CEA’s findings run counter to a study last year from the Independent Community Bankers of America (ICBA), which said community banks could lose $1.3 trillion in deposits and $850 billion in loans if stablecoin rewards were permitted.

Work on the CLARITY Act stalled earlier this year due to conflict between the banking and sectors on this topic, though lawmakers have said recently that they are making progress.

Writing about this issue last month, PYMNTS said that stablecoins have become a focal point in the debate as they “sit at the intersection of payments, banking, and capital markets.” In targeting yield, regulators would be narrowing the scope of stablecoins to that of a payment instrument instead of an investment vehicle.

New research by PYMNTS Intelligence indicates that businesses that wish to use stablecoins are more inclined to work with banks than with crypto wallets.

Those wallets, while efficient, “introduce unfamiliar risks: private key management, fragmented reporting, uncertain custody standards and evolving regulatory interpretations,” PYMNTS wrote recently. “Banks, by contrast, provide a trust layer that CFOs already understand.”