Banks have been cautiously exploring generative AI, using it internally for call centers, software development, and investment research, but hesitating to deploy it directly to customers due to risks like hallucinations, toxicity, and misinformation. In response, Google, Oliver Wyman, and Corridor Platforms are launching a “responsible AI sandbox” for banks to test gen AI use cases safely. “The idea is, in a three month period, they really get a good sense of exactly what needs to be done for their use case to go live and what governance is needed,” said Manish Gupta, Corridor’s CEO. The sandbox includes bias, accuracy, and stability tests and supports portability. “Tier 1 banks have been using sandboxes with good results – for example, HSBC and JPMorganChase,” said Alenka Grealish of Celent. Consultant Dov Haselkorn added, “It gets them probably three years ahead on the journey… And speed is really of the essence.” He also emphasized data risk: “Data provenance is a major topic in this field… you have to make sure that those controls are in place to make sure that none of our customer data accidentally leaks to third parties.” The sandbox, initially using Google’s Gemini model trained for customer service, lets banks test gen AI with internal or external data. “The industry needs to learn how to control” the adoption of AI, said Oliver Wyman’s Michael Zeltkevic. Oliver Wyman will assist banks in operationalizing the models. Similar efforts are underway in the U.K., where the Financial Conduct Authority’s “Supercharged Sandbox” lets firms safely test AI. “This collaboration will help those that want to test AI ideas but who lack the capabilities to do so,” said FCA’s Jessica Rusu. Karan Jain, CEO of NayaOne, which powers the FCA sandbox, explained, “They brought the data and the AI model into NayaOne, we locked it down, and we provided the GPUs.” Jain noted that sandbox use cases include fraud detection, cybersecurity, code assistance, and compliance, but warned of lagging adoption: “The speed of adoption of technology is 10 times slower than the speed of technology that’s entering the market and the employees want it.”
Pinnacle and Synovus to merge, to be among the top five banks in ten Southeast markets; creating the largest bank holding company in Georgia and the largest bank in Tennessee
Pinnacle Financial Partners plans to merge with Synovus Financial in a deal that will significantly bolster the combined company’s Southeast footprint and push it firmly over the $100 billion-asset threshold. The proposed all-stock transaction, valued at $8.6 billion, would create a $116 billion-asset company, making it the largest bank holding company in Georgia, the two companies said. The combined entity will operate under the Pinnacle name and brand, and is set to be among the top five banks in 10 Southeast markets. Synovus CEO Kevin Blair, 54, is slated to become president and CEO of the merged bank. Pinnacle President and CEO Terry Turner would serve as chairman, and a slim majority of board members would come from Pinnacle. “We are two high-performing institutions with one powerful future,” said Blair, who was promoted to the role of Synovus CEO in 2021 and later became board chairman, in a statement. “Our belief in the success of this merger is grounded in a decade of strong results and proven execution from both companies, each delivering top-tier earnings and total shareholder returns.” The merger is the latest in a string of bank merger-and-acquisition deals announced in recent weeks. In a research note, Laurie Havener Hunsicker, an analyst at Seaport Research, noted the “substantial pick-up in M&A” during the week of July 15. As part of the deal, which is subject to regulatory approval, Pinnacle Financial, which has $54.8 billion of assets, would relocate its headquarters to Atlanta. Pinnacle Bank, meanwhile, would continue to be based in Nashville. Synovus Financial has about $61 billion of assets. Jamie Gregory, the chief financial officer at Synovus, would continue in that role at the combined company while Rob McCabe, Pinnacle’s chairman, would serve as vice chairman and chief banking officer of the combined bank. The company’s board would be made up of 15 directors, including eight from Pinnacle’s existing board and seven from Synovus’ board, according to the release. Pending regulatory approval, the acquisition is expected to close in the first quarter of 2026. The companies said they expect to realize $250 million in cost-savings as a result of the merger. The acquisition announcement comes two days after a news report said that Synovus was engaged in merger talks with at least one rival. Synovus’ stock was down more than 11% Thursday in after-market trading, while Pinnacle’s shares were down nearly 9%. Under the terms of the agreement, which has been unanimously approved by both companies’ boards, shares in Synovus and Pinnacle would be converted into shares of a new Pinnacle parent company, based on a fixed exchange ratio of 0.5237 Synovus shares per Pinnacle share. After the deal closes, Synovus shareholders would own about 48.5% of the combined company, while Pinnacle shareholders will own slightly more, about 51.5%. The transaction is expected to be approximately 21% accretive to Pinnacle’s estimated operating earnings per share in 2027, with a tangible book value per share earnback period of 2.6 years. During a conference call to discuss the deal, Turner called it “one of most compelling bank transactions that I’ve seen in a long time” and said that he’s long admired Blair and his team. “We are completely aligned,” Turner said. “Let me repeat, we are completely aligned.” Local market leadership will remain intact, Blair said on the call. Executives said they are making “significant employment commitments” in Nashville, Columbus and Atlanta. Synovus has recently been focused on hiring more bankers in certain Southeast metropolitan areas in order to support its commercial and middle-market lending and private wealth. Those areas include Atlanta; Miami; Birmingham, Alabama; and Charleston, South Carolina. “To me, this is so much more compelling than continuing to grow the bank organically,” Blair said on the call. Pinnacle Financial was named American Banker’s 2024 Best Bank to Work For, among banks with more than $10 billion of assets. Economic and population growth in the Sun Belt has attracted large regional banks including PNC Financial Services Group Inc., Fifth Third Bancorp and Huntington Bancshares to open branches across the Southeast. Synovus, headquartered in Columbus, Georgia, has approximately $61bn in assets and operates 244 branches across Georgia, Alabama, Florida, South Carolina, and Tennessee. It offers a variety of commercial and consumer banking services, along with specialised products such as wealth management and international banking. This merger is expected to create the largest bank holding company in Georgia and the largest bank in Tennessee.
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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
Major banks taking divergent approaches ranging from token deposits on public blockchain and token services on private blockchain to partnerships with stablecoin issuers for launching stablecoin-based payments
Among major U.S. banks—JPMorgan Chase, Bank of America, Citigroup, U.S. Bank, and PNC—several have launched tokenized deposit systems akin to stablecoins within their own ecosystems. Interoperability remains a challenge, prompting analysts to ask if a stablecoin consortium, like Zelle, would make sense. Citi’s Jane Fraser acknowledged potential for collaboration but asserted that Citi’s own live-token service, now operational in four markets, is a “killer app” for programmable, cross-border payments. JPMorgan’s Jamie Dimon didn’t respond to the consortium idea, though JPM is part of the Zelle-owning consortium. BofA’s Brian Moynihan favored both solo and joint approaches, noting client demand hasn’t materialized yet, though the bank holds blockchain patents and partners with stablecoin issuers. Citi is exploring its own stablecoin, while JPMorgan’s JPMD token runs on Coinbase’s Base network for institutional fund transfers. U.S. Bank’s CEO Gunjan Kedia said stablecoins aren’t material yet, though they’re ready to pilot. PNC’s CEO William Demchak predicted an industry-led stablecoin would emerge, though he and Kedia expressed skepticism about its near-term impact, especially in domestic payments where demand and cost advantages remain unclear.
SandboxAQ report shows only 6% of organizations have implemented a comprehensive, AI-native security strategy across both IT and AI systems while 79% are already using AI in production environments
SandboxAQ released its inaugural AI Security Benchmark Report, revealing a significant disconnect between enterprise AI adoption and cybersecurity readiness. While 79% of organizations are already using AI in production environments, only 6% have implemented a comprehensive, AI-native security strategy, leaving the vast majority of enterprises vulnerable to threats they are not yet equipped to detect or mitigate. The report highlights widespread concern about the risks AI introduces, from model manipulation and data leakage to adversarial attacks and the misuse of non-human identities (NHIs). Yet despite growing anxiety among CISOs, only 28% of organizations have conducted a full AI-specific security assessment, and most are still relying on traditional, rule-based tools that were never designed to address dynamic, machine-speed systems. Only 6% of organizations have implemented AI-native security protections across both IT and AI systems. 74% of security leaders are highly concerned about AI-enhanced cyberattacks, and 69% are highly concerned about AI uncovering new vulnerabilities in their environments. Just 10% of companies have a dedicated AI security team; in most organizations, responsibility falls to traditional IT or security teams. Marc Manzano, General Manager of the Cybersecurity Group at SandboxAQ said, ” This report highlights a growing recognition among security leaders that defending against evolving threats requires new assumptions and approaches, not just new layers or patches to current tooling.”
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.
Treasury and Trade Solutions (TTS) and embedded finance platforms driving growth for banks in cross-border transactions and deposit balances amid operational uncertainty, FinTech fragmentation and growing demand for streamlined, data-rich payments
Financial tools once limited to large firms are now accessible to SMBs via APIs and embedded finance. From large lenders like Citi and JPMorgan, to systemically important banks like BNY and Lloyds, as well as major market institutions like Truist, bank executives all stressed to their respective investors the importance of back-office units. Against a backdrop of operational uncertainty, FinTech fragmentation and growing demand for streamlined, data-rich payments, these FIs’ TTS and embedded finance platforms are becoming strategic growth engines. Done right, embedded finance shifts from a buzzword to a reliable infrastructure. Citi’s Services business, for example, posted record second-quarter 2025 revenues of $5.1 billion, up 8% year over year. Market share gains of 40 basis points in TTS were driven by a 7% rise in cross-border transaction value and higher deposit balances. BNY’s Treasury Services offerings were likewise up year-over-year. Nearly two-thirds would switch providers to access embedded finance solutions. For banks, this underscores the opportunity within treasury and payments services. At the same time, innovations like stablecoins are reshaping what treasury management and payments might look like in the future.
A stablecoin is a blockchain token backed 1:1 by cash or cash-like assets, used as a substitute for fiat in on-chain trade with use cases in trade settlement, remittances and online purchases, whereas tokenized deposits are bank-issued tokens backed by dollars held in client accounts
With the GENIUS Act now law, U.S. banks are expected to increasingly explore issuing blockchain-based assets. While many tout stablecoins for faster, cheaper payments, most banks are actually eyeing tokenized deposits — not stablecoins — as the more viable product. Though both are digital tokens tied to fiat value, their nature and implications differ greatly. Stablecoins (like USDC) are backed 1:1 by cash or equivalents, circulate on public blockchains, and are used broadly as money for trade, savings, and remittances. Tokenized deposits, by contrast, are representations of client bank deposits, issued and moved within a bank’s private network, with value transfers still tied to bank-controlled ledgers. Unlike stablecoins, they’re non-fungible across institutions and don’t circulate freely. Their purpose is to modernize existing bank services, not create new monetary systems. The difference lies in function and intent: stablecoins are a new form of money, while deposit tokens are tools for enhancing traditional banking. As banks increasingly mention blockchain innovations, it’s vital to distinguish between the two.
Citizens hyper-local strategy has enabled the bank to establish a strong foothold and build a robust brand presence in New York
Citizens Bank thrives against national banking giants by embracing hyperlocal strategies and personalizing customer relationships. Lamont Young , Head of Digital says, “If you look at what we’ve done in New York City over the last couple of years, New York City is a microcosm of that hyperlocal strategy. There are a number of people who, a couple of years ago, thought we were insane for trying to be a regional bank in the New York market. However, to your point, we treat New York like we do all our markets. We wanted to ensure that we became part of the communities we actually serve. We hired folks who were from those communities. We treated Brooklyn differently as a borough than we treated the Bronx. We treated the Bronx differently as a borough than we treated Queens. And that hyper-local strategy has enabled us to establish a strong foothold in New York and build a robust brand presence in the world’s toughest market. We’ve invested heavily over the last couple of years in data and analytics. Being able to gather publicly available information on our clients without being intrusive is one way we’ve made experiences feel that much better for our users. Passive churn is a real sort of thing across all financial institutions, large and small. The challenge for institutions is to recognize the triggers that initiate the process of passive churn. Most institutions would have told you, “Hey, if we can get customers in this sort of sticky products, if I can get you into a checking account and I can get you a direct deposit, if I can get you into bill pay,” these are all sticky services. Candidly, they’re really too difficult for customers to switch. Today, I can switch my direct deposit in seconds and pay my bills in minutes. Those things that you would consider traditional, sticky, just aren’t there. We use some internal, complex algorithms to examine the propensity models of people who are likely to attrit.”
The five fintech jobs Gen AI will replace first- entry-level financial analyst, the customer service representative, the compliance analyst, data entry clerk, content marketer
Entry-Level Financial Analyst: Gen AI is automating the analyst bullpen process, enabling AI models to generate discounted cash flow models and draft investment memos before human input. This shift towards “hybrid jobs” involves human expertise directing and verifying AI-driven analysis, with future analysts tasked with querying AI, validating outputs, and adding strategic insight, a shift from data-gatherer to AI-interrogator. The Customer Service Representative: The call center industry is undergoing a significant transformation with AI-powered agents, transforming roles like customer support. Swedish fintech Klarna now employs most of its workforce with Gen AI daily, while remaining human agents become escalation specialists, handling sensitive cases that require genuine empathy, a skill AI has yet to master. The Compliance Analyst: The financial industry faces regulations like AML and KYC, and generating AI can effectively detect patterns and flag suspicious activity. This shift shifts the human from a data-sifter to an AI auditor, emphasizing the importance of human oversight in AI-augmented risk management systems. Human professionals will now design, train, and audit these AI systems. The Data Entry Clerk: The data entry clerk role in fintech is becoming increasingly vulnerable due to advanced AI and optical character recognition (OCR), which can now accurately input data in real time, reducing the time spent on this role. This shift is a clear case of technological replacement, freeing up human capital for critical thinking tasks. The Content Marketer: Fintechs rely on consistent content to engage clients, and generative AI can produce high-quality, SEO-optimized articles, social media copy, and market updates. This shift pushes human marketers up the value chain, forcing them to become strategists managing AI as a tool. Their future lies in crafting creative campaigns and brand voice that AI will amplify.