Armed security personnel stand guard on the rooftop of a hotel, next to letters reading “Davos” … [+] surrounded by snow, near the Congress Centre on January 25, 2018 in Davos, eastern Switzerland. / AFP PHOTO / Fabrice COFFRINI (Photo credit should read FABRICE COFFRINI/AFP via Getty Images)
AFP via Getty Images
If you read any business or finance news, you would have found it impossible not to notice that there was another Davos last month. I rather agree with Andrew Curry, who says that the worst thing about the event is the temptation to take it seriously, but business leaders do turn up there to make speeches and it can be useful to listen to them to spot key themes. This year, as would expect, artificial intelligence (AI) was centre stage.
AI Is The Future of Fintech
Bryan Zhang (the executive director and co-founder of the Cambridge Centre for Alternative Finance at The University of Cambridge Judge Business School) presented the results of their research on the future of global fintech. The study gathered data from 227 fintechs across five verticals (digital lending, digital capital raising, digital payments, digital banking & savings and insurtech) across the Asia-Pacific, European, Latin America and Caribbean, Middle East & North African, North American and Sub-Saharan African regions. Almost three-quarters of those surveyed identified AI as the most important factor in the development of fintech in the next five years (and almost half of them pointed to embedded finance, open banking and the digital economy as the second most important factors).
I think these findings are uncontroversial. We can all agree that the fintech sector is poised to be significantly transformed by advances in artificial intelligence (AI) across a number of areas. But how, exactly? And where will the biggest impact be? Scanning through various reports, news feeds and post I can see a number of key business functions that will be affected. Here are a few of them:
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Personalised Banking and Services: One of first and most obvious uses of AI, building on the masses of historical data available to banks, will be to push much more personalised products and services to customers. AI can help banks and their fintech competitors to create tailored offerings for each individual, ranging from from customised credit cards to unique savings plans;
Regulatory Compliance (RegTech): AI will help in the development of systems that can automatically adapt to new regulations and ensure compliance more efficiently. In my view, the next really big fintech businesses will actually be regtech businesses and AI is certain to power them;
Enhancing Robotic Process Automation (RPA): In their book “The Future of Finance”, Henri Arslanian and Fabrice Fisher pointed out that while automation can be enabled with relatively unsophisticated RPA technology, for more complex processes with more varied inputs, more sophisticated techniques are needed. Thus AI, combined with RPA, will result in cost savings and increased efficiency for financial institutions;
Credit Decisions and Risk Management: AI systems will help financial institutions make better lending decisions and manage risk more effectively. As a result, the market is moving towards insights-driven lending rather than expert judgement, which helps maximise rejection of high-risks customers and minimise rejection of creditworthy customers;
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Investment and Trading: Mihir Desai, a Professor of Finance at Harvard Business School, points at two significant disruptions: the rise of passive fund managers and the growing dominance of quantitative investing because of the ability to analyze large amounts of data quickly. He thinks that these trends in finance suggests that an AI-dominated future can create “outsized” winners and losers pretty quickly;
Customer Support and Chatbots: AI-powered chatbots and virtual assistants will become more nuanced and capable of handling complex customer service inquiries, providing instant support and freeing up human resources for more strategic tasks. Personally, I am interacting with a bank chatbot, I don’t really care whether it is a person or not provided it does what I want; and
Fraud Detection and Security: I think this area is particularly concerning, because of the tidal wave of fraud that AI will unleash and the corresponding fintech opportunities to harness AI to get us to higher ground, as discussed in the recent U.S. Financial Services Committee hearing about the opportunities and risks associated with AI.
All of these uses of AI are, frankly, pretty unremarkable. But I think what a lot of this kind of analysis lacks is a recognition of the fact that it is the customers’ use of AI that will take the sector in some unexpected directions, not the banks’ use of AI. As I have written here before, financial services organisations need to pay strategic attention to the impending switch from human to machine customers.
Persuade My Bot!
The brilliant Cathy Hackl wrote about this a few years ago, noting that traditional marketing is all about the consumer, so marketers spend their effort of creating compelling narratives to connect with those consumers. Their goal is just to create demand for a product to but to build brand and relationships. That’s great for B2C and B2B2C, but what happens when we find ourselves in the world of Business-to-Robot-to-Consumer (B2R2C) commerce?
What happens to the accumulated knowledge and experience of the marketing department in a retail bank when banks will have to convince robots – rather than humans – that their deal is the best in the market? The robots won’t care about the Superbowl commerical. The robots won’t care about the race team sponsorship. The robots will be supremely indifferent to the brand colour and logo.
My spreadsheet reviewed a WalletHub ranking of financial distress for the residents of 100 U.S. cities, including 17 in California. The analysis compared local credit scores, late bill payments, bankruptcy filings and online searches for debt or loans to quantify where individuals had the largest money challenges.
When California cities were divided into three geographic regions – Southern California, the Bay Area, and anything inland – the most challenges were often found far from the coast.
The average national ranking of the six inland cities was 39th worst for distress, the most troubled grade among the state’s slices.
Bakersfield received the inland region’s worst score, ranking No. 24 highest nationally for financial distress. That was followed by Sacramento (30th), San Bernardino (39th), Stockton (43rd), Fresno (45th), and Riverside (52nd).
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Southern California’s seven cities overall fared better, with an average national ranking of 56th largest financial problems.
However, Los Angeles had the state’s ugliest grade, ranking fifth-worst nationally for monetary distress. Then came San Diego at 22nd-worst, then Long Beach (48th), Irvine (70th), Anaheim (71st), Santa Ana (85th), and Chula Vista (89th).
Monetary challenges were limited in the Bay Area. Its four cities average rank was 69th worst nationally.
San Jose had the region’s most distressed finances, with a No. 50 worst ranking. That was followed by Oakland (69th), San Francisco (72nd), and Fremont (83rd).
The results remind us that inland California’s affordability – it’s home to the state’s cheapest housing, for example – doesn’t fully compensate for wages that typically decline the farther one works from the Pacific Ocean.
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A peek inside the scorecard’s grades shows where trouble exists within California.
Credit scores were the lowest inland, with little difference elsewhere. Late payments were also more common inland. Tardy bills were most difficult to find in Northern California.
Bankruptcy problems also were bubbling inland, but grew the slowest in Southern California. And worrisome online searches were more frequent inland, while varying only slightly closer to the Pacific.
Note: Across the state’s 17 cities in the study, the No. 53 average rank is a middle-of-the-pack grade on the 100-city national scale for monetary woes.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
The up-and-coming fintech scored a pair of fourth-quarter beats.
Diversified fintech Chime Financial(CHYM +12.88%) was playing a satisfying tune to investors on Thursday. The company’s stock flew almost 14% higher that trading session, thanks mostly to a fourth quarter that featured notably higher-than-expected revenue guidance.
Sweet music
Chime published its fourth-quarter and full-year 2025 results just after market close on Wednesday. For the former period, the company’s revenue was $596 million, bettering the same quarter of 2024 by 25%. The company’s strongest revenue stream, payments, rose 17% to $396 million. Its take from platform-related activity rose more precipitously, advancing 47% to $200 million.
Image source: Getty Images.
Meanwhile, Chime’s net loss under generally accepted accounting principles (GAAP) more than doubled. It was $45 million, or $0.12 per share, compared with a fourth-quarter 2024 deficit of $19.6 million.
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On average, analysts tracking the stock were modeling revenue below $578 million and a deeper bottom-line loss of $0.20 per share.
In its earnings release, Chime pointed to the take-up of its Chime Card as a particular catalyst for growth. Regarding the product, the company said, “Among new member cohorts, over half are adopting Chime Card, and those members are putting over 70% of their Chime spend on the product, which earns materially higher take rates compared to debit.”
Today’s Change
(12.88%) $2.72
Current Price
$23.83
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Key Data Points
Market Cap
$7.9B
Day’s Range
$22.30 – $24.63
52wk Range
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$16.17 – $44.94
Volume
562K
Avg Vol
3.3M
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Gross Margin
86.34%
Double-digit growth expected
Chime management proffered revenue and non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance for full-year 2026. The company expects to post a top line of $627 million to $637 million, which would represent at least 21% growth over the 2024 result. Adjusted EBITDA should be $380 million to $400 million. No net income forecasts were provided in the earnings release.
It isn’t easy to find a niche in the financial industry, which is crowded with companies offering every imaginable type of service to clients. Yet Chime seems to be achieving that, as the Chime Card is clearly a hit among the company’s target demographic of clientele underserved by mainstream banks. This growth stock is definitely worth considering as a buy.
ROCHESTER, N.Y. — Student athletes are now earning real money thanks to name, image, likeness deals — but with that opportunity comes the need for financial preparation.
Noah Collins Howard and Dayshawn Preston are two high school juniors with Division I offers on the table. Both are chasing their dreams on the field, and both are navigating something brand new off of it — their finances.
“When it comes to NIL, some people just want the money, and they just spend it immediately. Well, you’ve got to know how to take care of your money. And again, you need to know how to grow it because you don’t want to just spend it,” said Collins Howard.
What You Need To Know
High school athletes with Division I prospects are learning to manage NIL money before they even reach college
Glory2Glory Sports Agency and Advantage Federal Credit Union have partnered to give young athletes access to financial literacy tools and credit-building resources
Financial experts warn that starting money habits early is key to long-term stability for student athletes entering the NIL era
Preston said the experience has already been eye-opening.
“It’s very important. Especially my first time having my own card and bank account — so that’s super exciting,” Preston said.
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For many young athletes, the money comes before the knowledge. That’s where Glory2Glory Sports Agency in Rochester comes in — helping athletes prepare for life outside of sports.
“College sports is now pro sports. These kids are going from one extreme to the other financially, and it’s important for them to have the tools necessary to navigate that massive shift,” said Antoine Hyman, CEO of Glory2Glory Sports Agency.
Through their Students for Change program, athletes get access to student checking accounts, financial literacy courses and credit-building tools — all through a partnership with Advantage Federal Credit Union.
“It’s never too early to start. We have youth accounts, student checking accounts — they were all designed specifically for students and the youth,” said Diane Miller, VP of marketing and PR at Advantage Federal Credit Union.
The goal goes beyond what’s in their pocket today. It’s about building habits that will protect them for life.
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“If you don’t start young, you’re always catching up. The younger you start them, the better off they’re going to be on that financial path,” added Nihada Donohew, executive vice president of Advantage Federal Credit Union.
For these athletes, having the right support system makes all the difference.
“It’s really great to have a support system around you. Help you get local deals with the local shops,” Preston added.
Collins-Howard said the program has given him a broader perspective beyond just the game.
“It gives me a better understanding of how to take care of myself and prepare myself for the future of giving back to the community,” Collins-Howard said.
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“These high school kids need someone to legitimately advocate their skills, their character and help them pick the right space. Everything has changed now,” Hyman added.
NIL opened the door. Programs like this one make sure these athletes walk through it — with a plan.
