The federal government has been shut down for over two weeks as funding bills keep hitting roadblocks in the Senate, and it could take weeks to resolve. Some financial institutions have responded quickly, while others have been slow or off the mark. The fact that a lengthy government shutdown would weigh on federal government employees’ and contractors’ finances poses a risk to bank and credit union balance sheets. But it’s also an opportunity for them to deepen customer trust.
Small business customers increasingly expect “best-in-class, highly sophisticated digital capabilities” and integrated experiences, according to a Finovate interview with Shruti Patal, chief product officer for business banking at U.S. Bank. But small businesses have historically been underserved digitally by their financial institutions, especially relative to consumers. U.S. Bank’s moves to modernize its small business banking digital experience are crucial to keeping its offering competitive against nonbank software providers, fintechs, and other banks. Its partnerships and all-in-one model for its business banking platform keep it in the running.
In today’s episode, we talk about whether the “American Dream” is less achievable, or just different, how this new economic reality has reshaped consumer behavior, and how brands are marketing aspiration differently. Join the discussion with host and Head of Business Development, Rob Rubin, Senior Director of Briefings, Jeremy Goldman, and Analyst, Paola Flores-Marquez.
JPMorgan Chase, Wells Fargo, Citibank, and Goldman Sachs reported earnings for Q3 2025. JPMorgan, the largest, reported revenues of $47.1 billion, beating analyst estimates, and raised its full-year outlook for net interest income. All beat estimates on adjusted earnings. Big banks projected a characteristic mix of optimism and caution in Q3. Banks have ample headroom for growth, but earnings will suffer if economic conditions worsen, consumer credit declines, markets fall, or deals slow.
A recent Bank of America study highlights the diverging fortunes of lower-income versus middle- and higher-income consumers. Wealthier segments are benefiting from rising asset prices and wages, while inflation and muted income growth is putting less well-off segments in a precarious position. Consumers’ overall resilience masks differences between income segments, which is important to strategic planning and risk management as banks anticipate macro risks. Higher-income segments are traditionally lower risk, even when they carry high balances—but with a sharp reversal in economic conditions, that could quickly change.
47% of US banking decision-makers say their institutions have already rolled out generative AI, up from 10% in 2023, said data from EY-Parthenon.
Technology modernization and attracting younger consumers are key to community banks’ survival over the next decade, according to a discussion between Treasury Secretary Scott Bessent and Federal Reserve vice chair for supervision Michelle Bowman at a Fed conference. Community banks face existential threats. Consolidation in the community banking market has been substantial. Community bank leadership is aging, and banks’ small scale makes it difficult to compete in a digitally interconnected banking market. Their strategies need to account for what’s changing.
EQ Bank launched a banking platform for small businesses, according to fintech.ca. It includes a business checking account with no monthly fees or minimum balance, many types of transactions for free, up to 10 sub-accounts, and Canadian customer support. EQ Bank has created a huge opportunity for itself given the size of Canada’s addressable market for small businesses. Going head to head with Canada's large banks would be challenging, but small business services from a direct bank are compelling play: CIBC’s Simplii does not offer small business banking and Tangerine’s are limited.
The biggest banks will spend $6 billion or more on marketing in 2025, or 0.10% of their total asset value, per an analysis of the American Bankers Association Bank Marketers Survey in the ABA Banking Journal. On average, 32% of banks’ marketing budgets were allocated to new customer acquisition—more than any other allocation. Bank marketers are clearly focused on digital advertising, and with greater resources and scale, the largest institutions won’t find it hard to drive awareness, attract new customers digitally, and dominate the conversation. Community banks will need to be scrappy.
JPMorgan Chase spends $2 billion per year on AI and finds an equal amount of cost savings as a result, said CEO Jamie Dimon in a recent Bloomberg TV interview. During its April investor day, JPMorgan forecast spending $18 billion on technology in 2025. JPMorgan is increasing the gap between the haves and have nots in bank technology. AI development in financial services, supported by modern platforms, is outrunning nearly everyone.
Ent Credit Union, a Colorado financial institution (FI) with $10.1 billion in assets, has selected Lumin Digital as its new digital banking platform. Lumin Digital is one of at least 15 digital banking platforms in the US, that compete with the core providers, particularly Fiserv and Jack Henry for smaller banks. Focusing their limited resources on digital improvements that personalize the customer experience can help smaller FIs better compete with their larger peers. Partnering with the right digital banking platforms will make this possible.
Amazon added JPMorgan Chase, Santander, and Wells Fargo as financing partners for used vehicles on Amazon Auto, per Automotive News. Those banks now offer auto loans through the platform, which lets buyers apply for auto loans via Amazon in cities where sellers list used vehicles. The latest Amazon Auto partnerships illustrate embedded finance’s ascendancy into the mainstream. Megabanks and large regional banks will continue to participate in dedicated embedded finance partnerships, particularly with partners that need scale—demonstrating the maturity of a business model that 10 years ago didn’t even have a name.
Fifth Third announced that it would acquire Comerica, merging two large regional banks in a deal worth $10.9 billion. The combined bank will have about $288 billion in assets. That knocks BMO, which hold $253.7 billion in assets, including the $16.3 billion added through its Bank of the West acquisition in 2023, out of the top 10. The FDIC recently rolled back scrutiny of large-bank deals, and President Donald Trump signed a resolution repealing a Biden-era rule that tightened merger reviews. The door is now more open to mergers between large regional banks, and a new wave of consolidation could be coming.
FICO introduced a new model for pricing and licensing its score for tri-merge resellers—vendors that consolidate credit reports and provide reporting to mortgage lenders, per The Wall Street Journal. This is another shot in the protracted war between FICO and the credit bureaus. VantageScore is a credible threat to FICO’s dominance, but the bureaus will lose the markup on the FICO scores that they were distributing. In addition, margins will get squeezed as they lose the markup from resales.
Wells Fargo is focusing on banking for small and medium-sized businesses (SMBs)—with a strong emphasis on customer experience and satisfaction, per Banking Dive. The problem with small business banking is that it’s about banking. Banks have a worsening record of making these banking relationships commerce-driven, in which they also offer merchant services and therefore struggle to deepen day-to-day propositions.
Brazil-based Nubank applied to the OCC for a national bank charter to expand into a country with an adult population of over 250 million and a substantial Latino demographic, particularly in the Southwest.Acquiring a national bank charter doesn’t mean opening a bank for the sake of deposits and lending—payment services without a bank partner may be the goal, at least for now. That would connect Latin Americans with counterparts in the US, competing with remittance services. But a splashy entrance into the US would mean a fight against megabanks for higher-income customers and behemoths like Chime for customers underserved by traditional financial institutions.
Improving mobile banking app functionality and adding tools and resources all in one place offers benefits to financial institutions (FIs) and their customers. But a recent Forbes analysis points out that FIs that want to move toward offering a super app should know the risks. A super app should be the potential outcome of a successful, deliberate strategy rather than a blind goal. Banks should incrementally enhance their offerings by integrating useful tools and resources. And they must rigorously prioritize security against high-value cyber threats and address customer privacy concerns with absolute transparency, especially when involving third parties.
By working closely with intermediaries, financial institutions (FIs) gain more-reliable access to funds, risk diversification, and greater operational efficiency. This in turn improves margins and market share and keeps institutions connected to the investment-lending flow that drives their bottom lines. Successful intermediary marketing directly correlates with empowering the chosen intermediary to do its job rapidly and accurately. FIs must shift their focus to becoming indispensable partners that save intermediaries time and help them win clients. By proactively providing advisors and consultants with ready-to-use, actionable materials, FIs move from being vendors to trusted, strategic assets.
More than three-fourths (78%) of US adults support extending federal funding tax credits for ACA insurance, according to a new KFF survey. That includes 57% of Republicans who support President Donald Trump. The tax credits are a key part of the current Senate stopgap funding negotiations. If subsidies are not extended, insurers need to prepare customer-friendly strategies to retain price-conscious enrollees, such as flexible plan options or help switching plans. They should also offer new digital health perks (or highlight existing ones) like mental health support and health-related discounts.
Credit union membership has held relatively steady between 2023 and 2025 for Gen Zers but has declined significantly among millennials—to 22% in 2025 from 31% in 2023, per a Sogolytics study. Credit unions must reposition themselves for younger consumers by closing the knowledge gap with simple, clear messaging about what they are and why they matter while also countering the perception that they’re outdated. Marketing should highlight their digital strength and convenience, showcase member ownership and community impact to align with Gen Zers’ and millennials’ values, and promote youth-friendly products like starter accounts or fee-free checking.