U.S. banking organizations spend billions each year on technology as their data, machine learning and artificial intelligence, and cybersecurity needs become larger and more complex. Today’s banks and their nonbanking affiliates are tech companies: They squeeze everything they can into the permissible activity of “data processing.” And to stay competitive, they should Bank holding companies can also make noncontrolling investments in many commercial entities, subject to strict conditions. Under merchant banking powers, financial holding companies can own 100% of any commercial entity generally for 10 years, so long as they don’t manage it Whether the target demographic prefers to shop at big box stores, online retail platforms or both, chances are many customers will be interested in banking with them. Tech companies that develop devices, apps and other solutions are no different. And as the user experience becomes fundamentally more digital, the separation of banking and commerce washes out. It all starts to look like data processing. Digital assets like cryptocurrencies, stablecoins, digital currencies and the metaverse only continue to blur banking and commerce distinctions. One solution would be relatively simple and doesn’t involve abandoning the prudential tools that are the bedrock of banking law. And importantly, the same activities would be regulated and supervised in the same way. Any company, generally, should be able to own a ring-fenced depository institution. A ring-fenced banking organization more broadly would allow any company to own a bank holding company and its subsidiaries. Imagine a commercial org chart with an intermediate holding company — the true bank holding company — with a bank subsidiary: All the banking and financial activities would be within the ring-fenced structure. The Fed would keep its privileged purview. It could even impose commitments, source-of-strength, disclosure and other requirements on commercial parent companies. Antitrust law would serve as a backstop for other competitive concerns. The federal or state banking regulators could focus on the banks. There would be the same strong capital and liquidity requirements, limitations on transactions with affiliates and loans to insiders — all of it.