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Navy Federal Credit Union’s new credit-building partnership, a rash of cybersecurity breaches, the ever-growing presence of artificial intelligence in banking and other topics are dominant for bankers as summer approaches.
Catch up on American Banker reporting on these issues and others that popped up last month.
Fiserv outage underscores importance of bank contingency planning
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Banks have largely recovered from a Fiserv outage on May 2 that resulted in the loss of multiple money movement services, including peer-to-peer payments platform Zelle. But the loss of services reiterates the importance of contingency planning.
“On Friday morning, we experienced an internal issue that temporarily disrupted service. The issue was fully resolved Friday, and all impacted transactions have since been successfully processed,” a Fiserv spokesperson told American Banker.
Consumers were unable to send money through Zelle as a result of the outage, according to posts on DownDetector, a website that provides real-time monitoring and reporting of online service outages. ACH was also affected.
Oklahoma mail theft case offers lessons on bank fraud methods
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A recently unsealed federal indictment in Oklahoma offers a detailed look into an alleged mail theft and check fraud conspiracy, highlighting methods fraudsters are using across the U.S. to steal money from banks and credit unions and underscoring what bankers can do to fight back.
The case, led by the U.S. Postal Inspection Service, charges eight individuals with conspiracy to commit bank fraud and other related offenses. The group allegedly netted more than $100,000 using fraudulent checks.
The scheme serves as a stark example of the challenges banks and credit unions face in check fraud, including vulnerabilities exploited through remote deposit and the speed of automated processing.
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Navy Federal offers members a debt-free path to credit
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Members of Navy Federal Credit Union can now build their credit scores through rent and utility bills, thanks to the credit union’s work on consumer-permissioned data sharing.
The credit union partnered with Bloom Credit, a credit data infrastructure platform, to offer its consumer-permissioned data product Bloom+ to its 14 million members as a checking account feature in late March. The partnership was formally
‘A Pac-Man’: AI is on the cusp of eating up bank jobs
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No one likes to say they are using artificial intelligence tools to replace workers. But experts say call center jobs and other low-skilled bank labor won’t be around for much longer, as agentic AI progresses.
A potential sign of AI-driven workforce reductions came from Morgan Stanley in March. Several publications
In January, Bloomberg Intelligence surveyed 93 global banks and found that they planned to eliminate 200,000 jobs as AI use accelerates.
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Lead Bank CEO calls debanking ‘a fiction’
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Never one to shy away from a hot take, Lead Bank CEO Jackie Reses said during a panel at a fintech summit on May 20 that she thought debanking — the practice of banks unilaterally closing a consumer or business account — was “a fiction, to some degree.”
Reses spoke at Breaking the Bank, an event put on in San Francisco by fintech journalist Eric Newcomer, about the GENIUS Act. On the opposite coast, the Senate had
“There was a lack of clarity — and still is — about, ‘Are we able to custody assets? Are we able to have stable[coin]s and other types of digital assets as clients?’ And I’m sure everyone has heard the noise around debanking,” Reses said.
Fintechs stick with work-from-home. It gives them an edge
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Set up a Google Meet with Trevor Gauthier, and you will get a glimpse into an inviting home office, with a black Lab napping in the window seat and a Swiss mountain dog on the floor.
Gauthier is CEO of Aces Quality Management, a Denver-based fintech where 100% of employees work remotely. The company develops auditing software for banks’ lending, call monitoring, wealth management and “anything they have a checklist against.”
The fintech exemplifies a trend among the companies on this year’s list of the
Chime IPO tests market appetite for fintech investment
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Chime’s initial public offering, filed in May, is likely to test the waters for other fintechs considering going public within the next year.
“We are excited to see Chime tap the public markets at a pivotal moment after weathering the capital markets deep freeze that has paralyzed fintech IPOs,” Pitchbook senior analyst Rudy Yang said. “The timing is undoubtedly bold, but it is a strategic play that balances opportunity with calculated risk. A strong reception may help catalyze a long-awaited revival in fintech liquidity.”
This would be a significant breakthrough given the drop in fintech venture capital exit value from IPOs from $222.4 billion in 2021 to $29.1 billion across the subsequent three years and through the first quarter of 2025, Yang said.
Why Morgan Stanley lets bots do boring compliance work
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If bots can perform a repetitive task at a bank, they should, freeing people to do the thinking that only they can do. That’s the premise behind a regulatory-inquiries automation project at Morgan Stanley, the
It’s also a trend finding footholds within banks around the world as executives look to automate the mindless parts of compliance, allowing both job reassignments and more time for compliance staffers to think about finding and addressing risks.
As bankers spend more and more money on AI, automation is one of the areas where some are seeing a positive return. Fifteen percent of bankers recently surveyed by American Banker’s research team said their investments in AI for task automation were paying off — but only one-third said those returns were at or more than the level they expected.
Coinbase breach highlights insider threat risks
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A recent cybersecurity incident at crypto exchange Coinbase, which was the result of a threat actor bribing some of the company’s customer support agents, serves as a reminder to U.S. financial institutions about the persistent and evolving threats posed by insiders.
The threat actor in this case appears to have obtained information by paying multiple contractors or employees working for the company in support roles outside the U.S. Coinbase did not say where these employees lived and worked, nor did it identify the threat actor.
The bribed insiders collected data from internal Coinbase systems they could access as part of their job responsibilities. Coinbase said its security monitoring independently detected instances of this improper data access in the months prior to receiving an extortion email.
Deutsche Bank contractor allegedly brought girlfriend into data center
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An IT professional is suing his former employer and Deutsche Bank, alleging the companies retaliated against him after he blew the whistle on a fellow employee who repeatedly brought his girlfriend into the bank’s data center.
The lawsuit, filed by James Papa and first reported by The Register, claims violations of New York State’s Whistleblower Protection Law and alleges a conspiracy to cover up security failures. Papa is also suing Marc Senatore, vice president at the bank who was his direct supervisor.
Papa, employed by IT company Computacenter as a service delivery manager, worked under contract at Deutsche Bank’s New York headquarters. The contract involved maintaining the security of the bank’s critical computer systems housed in dedicated “tech rooms,” according to
