Most of the AI agent systems being sold today are not truly agentic, according to a report from business research and insights firm Gartner. According to the report, out of thousands of AI agent systems touted by vendors, only 130 are real. Gartner predicted that more than 40% of agentic AI projects will be canceled by 2027 due to high costs, unclear business value and weak risk controls brought on by AI systems incorrectly marketed as agentic. “True AI agents are defined by goal-driven autonomy — the ability to work dynamically and proactively, with self-determination, to pursue long-term business goals,” Sagi Eliyahu, co-founder and CEO of the tech orchestration platform Tonkean, told. “A true agentic AI system orchestrates agents across every relevant piece of technology or team environment. If the ‘agent’ only handles discrete tasks that are defined by the user, if it only works inside its own system, or if it’s only accessible through chat, it may in fact be an AI capability, but it’s not an agent — it’s an automation or it’s a chatbot.” Akhil Sahai, chief product officer at Kanverse.ai, wrote in a post on LinkedIn that companies need to ask the following questions to identify whether an AI system is truly agentic: Can the system operate without constant human input? Does it pursue goals autonomously rather than follow scripted tasks? Can it reason, plan and improve with experience? “If the answer to any of these is ‘no,’ it’s not an AI agent,” Sahai said.
KeyBank 2Q25: Client deposits and relationship households were up 2% year-over-year while deposit costs were managed below 2%; Commercial payments-related fees grew high single digits
KeyCorp announced net income from continuing operations attributable to Key common shareholders of $387 million, or $.35 per diluted common share, for the second quarter of 2025. For the first quarter of 2025, net income from continuing operations attributable to Key common shareholders was $370 million, or $.33 per diluted common share. For the second quarter of 2024, KeyCorp reported net income from continuing operations attributable to Key common shareholders of $237 million, or $.25 per diluted common share, or adjusted net income of $241 million, or $.25 per diluted common share(a). Included in the second quarter of 2024 are $4 million, after-tax, of charges related to the FDIC special assessment(b). Chairman and CEO, Chris Gorman said, “Our second quarter results demonstrate continued strong momentum. Revenue was up 21% year-overyear driven by our clearly defined net interest income tailwinds and 10% growth in noninterest income, while expenses grew 7%. Sequentially, net interest income grew 4%. Credit quality continues to trend in a positive direction with overall credit migration improving for the sixth consecutive quarter. Business activity with clients and prospects continues to accelerate. Client deposits and relationship households were up 2% year-over-year while deposit costs were managed below 2%. Period end commercial loans grew $2.1 billion in the second quarter. Assets under management reached a record $64 billion. Investment banking pipelines remain at historically elevated levels. In the second quarter we raised over $30 billion of capital on behalf of our clients. Commercial payments-related fees grew high single digits year-over-year. We continue to make investments in people and technology that will drive future growth for our company. We remain on target to increase our front line bankers – investment bankers, middle market relationship managers, payments advisors, and wealth managers – by 10% in 2025. I am energized by our momentum as we win and take share in the marketplace. I remain confident that we will continue to execute against our compelling organic growth opportunities.”
- Revenue of $1.8 billion, up 21% year-over-year; Significant positive operating leverage on both a total and fee basis year-over-year
- Net interest income up 4% and net interest margin increased 8 bps quarter-over-quarter
- Period-end loans up $1.6 billion quarter-over-quarter; Commercial loans up $3.3 billion or 5% year-to-date
- Net charge-offs declined 8% quarter-over-quarter; Other credit metrics stable to improved
Consumer Bank Summary of Operations (2Q25 vs. 2Q24)
- Key’s Consumer Bank recorded net income attributable to Key of $122 million for the second quarter of 2025, compared to $59 million for the year-ago quarter
- Taxable-equivalent net interest income increased by $153 million, or 29.3%, compared to the second quarter of 2024
- Average loans and leases decreased $3.0 billion, or 7.8%, from the second quarter of 2024, driven by broad-based declines across all loan categories
- Average deposits increased $2.6 billion, or 3.1%, from the second quarter of 2024, driven by growth in money market deposits and demand deposits
- Provision for credit losses increased $22 million compared to the second quarter of 2024, primarily driven by changes in reserve levels due to deterioration in the economic outlook
- Noninterest income increased $1 million from the year-ago quarter, driven by an increase in trust and investment services income, partially offset by a decrease in consumer mortgage income
Commercial Bank Summary of Operations (2Q25 vs. 2Q24)
- Key’s Commercial Bank recorded net income attributable to Key of $349 million for the second quarter of 2025 compared to $206 million for the year-ago quarter
- Taxable-equivalent net interest income increased by $145 million, or 35.3%, compared to the second quarter of 2024
- Average loan and lease balances decreased $161 million, or 0.2%, compared to the second quarter of 2024, driven by a decline in commercial real estate loans and commercial lease financing
- Average deposit balances decreased $1.5 billion compared to the second quarter of 2024, driven by a reduction in higher-cost client balances
- Provision for credit losses decreased $3 million compared to the second quarter of 2024, driven by a lower reserve build as changes in the portfolio mix offset economic deterioration, as well as lower net loan charge-offs
- Noninterest income increased $61 million compared to the second quarter of 2024, primarily driven by an increase in investment banking and debt placement fees and commercial mortgage servicing fees
- Noninterest expense increased $18 million compared to the second quarter of 2024, driven by higher support and overhead expense
A multi-round AI coding challenge K Prize that tests models against flagged issues from GitHub to assess how well models can deal with real-world programming problems sees a top score of just 7.5% versus the industry benchmark of 75%
Nonprofit Laude Institute announced the first winner of the K Prize, a multi-round AI coding challenge launched by Databricks and Perplexity co-founder Andy Konwinski. The winner will receive $50,000 for the prize. The final score set a new bar for AI-powered software engineers; with correct answers to just 7.5% of the questions on the test. K Prize runs offline with limited compute, so it favors smaller and open models. It levels the playing field. Konwinski has pledged $1 million to the first open source model that can score higher than 90% on the test. K Prize tests models against flagged issues from GitHub as a test of how well models can deal with real-world programming problems. But while SWE-Bench is based on a fixed set of problems that models can train against, the K Prize is designed as a “contamination-free version of SWE-Bench,” using a timed entry system to guard against any benchmark-specific training. For round one, models were due by March 12. The K Prize organizers then built the test using only GitHub issues flagged after that date. The 7.5% top score stands in marked contrast to SWE-Bench itself, which currently shows a 75% top score on its easier “Verified” test and 34% on its harder “Full” test. Konwinski still isn’t sure whether the disparity is due to contamination on SWE-Bench or just the challenge of collecting new issues from GitHub, but he expects the K Prize project to answer the question soon.
Citi’s new retail head of retail banking says simplified strategy distinguishes Citi from larger banks; credits fintechs with pushing traditional banks to reduce complexity
Kate Luft, Citi’s new head of U.S. retail banking, draws inspiration for customer engagement from the airline industry. “I think of it like an airline,” she said. “The more you do with us, the more we recognize you.” Luft led the overhaul of Citi’s U.S. retail strategy last year, simplifying products, consolidating checking accounts, and introducing “relationship tiers” that reward customers with perks like waived fees when they meet balance thresholds. “Really what we did was redefine our products and value [propositions],” she said. “Our mandate was, how do we make it super-simple for our clients?”
Anthropic study finds all LLMs showed “performance degradation with extended reasoning” on complex deductive tasks, “suggesting difficulties in maintaining focus during complex deductive tasks
Artificial intelligence models that spend more time “thinking” through problems don’t always perform better — and in some cases, they get significantly worse, according to new research from Anthropic that challenges a core assumption driving the AI industry’s latest scaling efforts. The study, led by Anthropic AI safety fellow Aryo Pradipta Gema and other company researchers, identifies what they call “inverse scaling in test-time compute,” where extending the reasoning length of large language models actually deteriorates their performance across several types of tasks. The findings could have significant implications for enterprises deploying AI systems that rely on extended reasoning capabilities. The study reveals distinct failure patterns across major AI systems. Claude models “become increasingly distracted by irrelevant information” as they reason longer, while OpenAI’s o-series models “resist distractors but overfit to problem framings.” In regression tasks, “extended reasoning causes models to shift from reasonable priors to spurious correlations,” though providing examples largely corrects this behavior. Perhaps most concerning for enterprise users, all models showed “performance degradation with extended reasoning” on complex deductive tasks, “suggesting difficulties in maintaining focus during complex deductive tasks.” Major AI companies have invested heavily in “test-time compute” — allowing models more processing time to work through complex problems — as a key strategy for enhancing capabilities. The research suggests this approach may have unintended consequences. “While test-time compute scaling remains promising for improving model capabilities, it may inadvertently reinforce problematic reasoning patterns,” the authors conclude. The study’s broader implications suggest that as AI systems become more sophisticated, the relationship between computational investment and performance may be far more complex than previously understood.
Truist 2Q25 reports continued net new checking account momentum supported by a strong 82% primacy rate; 27% YTD increase in net new AUM from Wholesale and Premier clients
Bill Rogers, Truist Chairman & CEO said:
We delivered strong second-quarter results, driven by strategic loan growth and higher net interest income derived from continued strong production from our business. Our performance reflects the value of our client-centric business model and momentum in our strategy, as we see tangible results from investments we have made in talent and technology across our platforms. We remain on track to achieve our annual expense growth target, which includes continued investments in talent and technology. Asset quality remained strong, and our strong capital position continues to support both our growth initiatives and our ability to return capital to shareholders. As we stay on offense, our clear strategic focus, strong balance sheet, and unwavering commitment to our purpose—to inspire and build better lives and communities—position us well to continue driving improved performance in the evolving environment.” —
Consumer & Small Business Banking–
- Continued net new checking account momentum; added ~37K in 2Q25, supported by a strong 82% primacy rate
- Strong loan growth across all consumer portfolios driven by new loan production of ~$13 billion for the quarter, a significant year-over year increase of $5.5 billion
- Advanced our Premier banking strategy with deposit and lending per banker production up 31% and 37% year-over-year– Maintained pricing and credit discipline; new loan production yielding higher rates than the existing portfolio; consumer NCOs at multi quarter lows
Wholesale Banking
- EOP loans increased by $5.3 billion, or 2.9% vs. 1Q25, driven by broad-based growth across industry groups and geographies
- Doubled new client growth in Commercial & Corporate YTD
- Wealth net asset flows were positive, aided by a 27% YTD increase in net new AUM from Wholesale and Premier clients compared with the same period a year ago
- Ongoing progress in Wholesale Payments, evidenced by 14% year over-year growth in treasury management fees
Driving digital growth
- Experience enhancements and performance marketing drove 17% year-over-year growth in digital account production
- New-to-bank clients acquired through the digital channel grew 27% year-over-year, contributing 43% of total new-to-bank clients in 2Q
- LightStream lending products were integrated across Truist digital experiences, becoming LightStream by Truist in 2Q
Empowering clients efficiently
- Over 1.8 million digital clients utilized financial management tools in online and mobile banking, up 40% year-over-year
- New Plan & Track Dashboard empowers clients to take control of their financial planning, driving a 30% increase in activity
More efficient financial markets, powered by unifying digital layers that operate 24/7, will free up billions of dollars in collateral held against operational risks and create new opportunities for financing and liquidity
The financial industry is rapidly transforming as blockchain technology enables real-time, global, and 24/7 markets. Major firms like BlackRock, Fidelity, and Franklin Templeton are investing in public blockchains such as Ethereum, Solana, and Avalanche to tokenize real-world assets—starting with stocks, bonds, and money market funds, and soon potentially expanding to real estate, art, and carbon credits. Unlike traditional systems, blockchain allows for instant settlement, composability, and continuous operation, eliminating time-based trading constraints and cross-border barriers. Legacy infrastructure like session-based markets and end-of-day fund valuation is being replaced by systems that enable second-by-second tracking of yield and daily payouts—even on weekends. However, not all tokenized assets offer true blockchain functionality; some merely provide digital receipts while relying on legacy systems. The real breakthrough comes when ownership and yield distribution are fully on-chain and managed via compliant digital wallets, empowering investors with peer-to-peer transfers, self-custody, and seamless access to a broad range of assets. This shift toward wallet-based finance promises to free up capital, reduce operational risk, and fundamentally reshape how global markets function. Institutions that fail to embrace this evolution risk falling behind.
Regions 2Q25 reports digital channel YTD checking growth of 10% from digital funnel improvements and mobile app mobile users increased 2% YoY; Treasury Management revenue increased 8.1% YTD, driven by client base growth of 10.2%
“Our second quarter results demonstrate continued momentum across our franchise and the benefits of the strategic investments we’ve made in talent, technology, and capabilities,” said John Turner, Chairman, President and CEO of Regions Financial Corp. Turner added, “We are experiencing solid deposit growth, disciplined loan production, and strong performance across fee-based businesses, including Treasury Management and Wealth Management. As we modernize our platforms and expand further in key growth areas across our footprint, we remain committed to executing our plan while generating top-quartile returns and long-term value for our shareholders. Our strong performance is the result of remaining focused on the financial needs and opportunities of our clients and operating in a responsible manner for the benefit of the people we serve.”
Corporate
- Driving growth in our priority and core markets by adding resources
- within Treasury Management and Commercial Banking
- Treasury Management revenue increased 8.1% YTD, driven by client base growth of 10.2%(1)
- Capital Markets income up 4% QoQ driven by higher M&A activity and RECM originations
- Ascentium Capital 1H25 loan production is up 12% YoY, contributing to growth are transactions originated through cross-marketing relationships with the Commercial Bank & Branch network
- Leveraging advanced technology including Natural Language Processing to efficiently screen public filings to evaluate 18K+ product opportunities for large corporate clients
Consumer
- Growing and retaining primary relationships by reskilling ~300 bankers to focus on small business opportunities and reallocating ~300 bankers to align talent depth with highest opportunity across key customer segments
- Delivering on localized strategies leveraging key sponsorships and campus activations including conducting ~6k financial education workshops in 2Q25
- Digital channel YTD checking growth of 10% from digital funnel improvements
- Mobile App mobile users increased 2% YoY; New Mobile App launch in progress
- Saved over 200k hours from centralizing processes so bankers can focus more on serving customers
Wealth
- Record 2Q25 NIR, up 1.2% QoQ
- Relationship growth of 8.3%(2)
- Investing in our Associates through our Next Level Advisor Development Program
- Completion of new cloud-based portal to improve infrastructure of existing and future WM applications
- Leveraging new tools to drive enhancements to Advisor CRMs leading to improvements in both experience and efficiency
- Fully launched social media program for client-facing associates to deliver compliant content through LinkedIn
- New head of Regions Investment Services named; Brandon Greve
Turning embedded payments into a profit center requires software platforms to participate in card economics by taking a slice of the acquiring fee or issuing virtual cards, route payments and control disbursements and monetize the payment network
Jay Dearborn, president of Corporate Payments at WEX described embedded payments maturity as a three-stage journey: enablement, customer value creation and monetization. Stage 3 is about turning embedded payments into a profit center. That’s where Dearborn said he sees the biggest gap and the biggest opportunity. “It almost takes someone to bring payments expertise onto the leadership team,” he said. Software companies are good at building great products, but payments is a domain business. Without deep expertise — or the right partner — the monetization piece rarely materializes, he said. That monetization comes in several forms. Dearborn said to start with participating in card economics, which means taking a slice of the acquiring fee, issuing virtual cards or receiving rebates through ACH+ networks. Next is participating in the funds flow itself. Companies that sit inside the accounts payable process, route payments and control disbursements aren’t just facilitators. They’re operators, and operators get paid. Then comes network monetization. Software platforms don’t just process payments; they connect buyers and sellers. That connection creates a closed-loop network that can be optimized, priced and monetized — without ever touching the payment itself, he said. That’s not the only monetizable layer. Speed matters too. Instant access to funds — on either side of a transaction — creates tangible value. Buyers are more likely to pay early. Sellers get paid faster. That value can be priced, packaged and monetized. “You can build an ecosystem around that account, that payment credential,” Dearborn said. “That’s the next unlock.” Embedded payments are table stakes, he said. Embedding them well and building a business around them is still a competitive edge.
U.S. Bancorp executives stressed to investors that they were doubling down on embedded payments, blockchain and AI-infused infrastructure. At the same time, U.S. Bancorp is fast-tracking a series of ambitious innovations that are reshaping how banks deliver value in an era of platform-first ecosystems and real-time finance. Much of U.S. Bank’s strategy for repositioning itself as an infrastructure bank for the digital economy hinges on Elavon, U.S. Bancorp’s merchant services subsidiary. In June, Elavon jumped two spots in the Nilson Report rankings to become the fifth-largest U.S. merchant acquirer, now processing over $576 billion annually. More notably, it’s now the second-largest bank-owned processor of Visa and Mastercard payments — a testament to how deep U.S. Bank has embedded itself in the payment plumbing of modern commerce. CEO Gunjan Kedis said, “We’re seeing success in linking our treasury, card and acquiring capabilities into one digital framework for businesses. That platform-centric vision is showing up in Elavon’s new embedded payment suite, launched this quarter. Designed for seamless integration into enterprise software, eCommerce systems and FinTech stacks, the suite allows developers to bake secure, scalable transaction capabilities into apps and workflows — whether in retail, healthcare, hospitality or beyond. U.S. Bancorp’s bank-backed advantage allows it to offer more cohesive financial service layers, from underwriting and settlement to compliance. Driving all of this is a deeper, less visible shift: the modernization of U.S. Bancorp’s infrastructure. Technology and communications expenses rose 4.9% year-over-year this quarter, reaching $534 million. While higher costs might spook some investors, the spend reflects a deliberate strategy to build a tech stack capable of supporting AI-driven insights, real-time payments and embedded finance. It’s showing in how U.S. Bank is consolidating its card issuance platform with Fiserv’s Credit Choice, an integrated solution for consumer and small business cards. Once complete, it will allow partner banks to offer digital-first credit cards that customers can manage alongside debit cards within a unified interface. That kind of experience design, rare among traditional banks, is increasingly table stakes in a world of FinTech-native expectations. Internally, U.S. Bancorp has also focused on refining automation, data architecture and cybersecurity controls — elements that aren’t flashy but are foundational to scaling digital products with integrity. In many ways, the company is sketching a blueprint for a financial institution that doesn’t just digitize banking, but embeds banking into everything else. It’s a subtle but seismic shift — from offering products, to offering platforms; from being a service provider, to being an infrastructure partner. That model is especially relevant in an economy where finance is increasingly API-based, modular and woven into SaaS, marketplaces and mobile ecosystems. U.S. Bancorp is betting that the future of banking won’t be in branches or balance sheet spread — but in the software behind your favorite app.