Back to First Principles for a Tech-Driven Future
This week's Substack looks at how innovation, regulation, and a conscious bank-technology partnership strategy can spur growth and keep banks competitive.
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These are the articles and insights our team is excited about this week:
The Federal Reserve has initiated the Novel Activities Supervision Program, which enhances oversight of innovative banking activities including crypto-assets, distributed ledger technology (DLT), and tech-driven collaborations with nonbanks. Operating alongside current supervisory teams, this risk-focused program aims to ensure safety, encourage innovation through expert engagement, and represents a step toward a cohesive regulatory framework that curbs regulatory arbitrage and indicates the Fed's commitment to overseeing bank-technology partnerships with implications for bank stability.
Apple's Savings account, in collaboration with Goldman Sachs, has gathered $10 billion+ in deposits since its April launch, boasting a 4.15 percent high-yield APY for Apple Card users. With 97 percent opting for automatic Daily Cash deposits, it builds on the successful Apple Card model of fee elimination, easy credit card use, and rewarding savings behavior.
This article discusses how banks must adopt a culture of experimentation similar to tech companies in order to remain competitive, as advocated by Gary Singh from Zeta. This entails managing risks, nurturing a transformation-focused talent pool, and leveraging modern technology platforms to expedite product development and innovative partnerships, ultimately enhancing learning, customer experiences, and product launches.
In his recent interview with The Financial Brand, Jay Sidhu, Executive Chairman of Customers Bank, underscores the vital need for technological progress in community banks to rival larger competitors, advocating for prioritized adoption, measuring executive performance by tech growth, and balancing high-tech with high touch for success.
What’s UP this Week
Limitations and regulation can help innovation thrive in financial institutions. Join David Milligan as he shares why, drawing on his experience as a veteran in the financial innovation services industry.