Humanoid robot is on display during 2023 World Robot Conference at Beijing Etrong International Exhibition & Convention Center on August 19, 2023 in Beijing, China. (Photo by Zhan Min/VCG via Getty Images)
VCG via Getty Images
As I wrote back in 2019, and McKinsey wrote back in August, once AI-powered software agents (that is, bots) start making more sophisticated financial decisions on behalf of customers, we will see a reshaping of banking that will affect billions of dollars in revenue. My bumper sticker version of future agentic finance landscape is quite straightforward: The AI revolution isn’t banks getting AI, it is customers getting AI.
Agentic Finance Is Inevitable
This has huge implications for the banking sector. The former Standard Chartered Group Chief Data Officer Shameek Kundu said in the Citi GPS’ report on “AI in Finance: Bot, Bank & Beyond” that “the biggest new thing will be the growth of non-human customers” and I could not agree more, which is why I have been looking at the implications for some time. In particular, I have become fascinated to see how banks and other financial services organisations (who sell very commoditised products such as checking and savings accounts) will adjust to acquiring agent customers who do not care about the bank Superbowl ads or which sports teams it sponsors.
When my AI-controlled smart wallet uses open banking data and decides that I need a different savings account or refinance my car loan, how will my network of bot advisors decide which provider to use? After all, savings accounts and car loans are boring, there are lots of them to choose from and even if I did take the time to read the terms and conditions I wouldn’t understand them. When it comes down to it, I don’t really want to be in the loop on these because I’ve got better things to do. Bot’s don’t/
Now one rather obvious thing that bots will base their decisions on will be price, so from a strategic perspective it seems to me that banks will likely need to compete much more sharply on price to retain clients’ wallet share. Bots can compare multiple prices simultaneously, so being the cheapest will likely always be a significant factor. One strategic response from institutions could therefore be to adopt an execution-focused strategy focused on operational efficiency. They could cut out the money wasted on TV advertisements that bots don’t look at and use the modern to modernise and revitalise their IT infrastructure, thereby enabling them to compete on volume and win those deals that are purely based on price.
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In this kind of environment, as you might easily imagine, all prices will rapidly fall to the lowest level and this has very significant implications on the business models of commercial banks and others. In fact McKinsey’s new Global Annual Banking Review for 2025 says that $23 trillion of the $70 trillion in the consumer banking sector are held in zero interest accounts. Unless banks adapt their offerings, this could amount to a loss of 9% to the bottom line, which would push average returns for banks below the cost of capital.
AI has a role to play in revitalising the banks infrastructure, of course, and this will help to reduce costs (McKinsey think this might mean initial savings of between 15% and 20% of operating costs) but of course those benefit will soon be competed away. This means that banks will need to find other competitive advantages. But what could these be?
In common with many other industry observers, I think that one area to focus on is digital identity. For commercial banks, they have an inbuilt advantage. As Kirsty Rutter, the Fintech Investment Director at Lloyds Banking Group in the U.K., said “our digital identity has become our most valuable digital asset”. Numerous fintech companies have emerged working to tackle different aspects of the identity challenges across identification, authentication and authorisation but there is still way to go to get a comprehensive infrastructure in place to provide the essential elements of the trust framework.
When you look at the rapid evolution of agentic finance and agentic commerce, it is clear that the platforms and protools are outpacing the trust frameworks needed to build real-world products and services. In another of their recent reports, McKinsey pointed in this direction and said that what they label “credentialling and identity” is the first of their key control points in the agentic economy because agents need secure, user-granted permission before they can initiate transactions across multiple institutions. Therefore, as they point out, organisations that already manage high-trust credentials start with a clear advantage. They go on to highlight some success factors: zero-trust architectures that never assume persistent access, dynamic consent via standardized protocols (for example, OAuth2/OpenID Connect) and continuous audit trails.
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Agentic Finance As Dark Energy
Financial institutions should be looking at the opportunities here as a way of staying relevant, as a way for remaining relevants to transactions that pass unnoticed through the current financial systems, a kind of financial dark energy made of wallets and stablecoins, AP2 and x402, exchanging value without ever touching banks and banking networks. All of those transactions wll need varying kinds of trust and one of the reasons why I am so bullish about the transition to agentic finance is precisely because of the transition from antiquated security theatre based on passwords, pictures of buses and emailing photos of passports to an infrastructure of privacy-by-design privacy and actual security. The fact of the matter is that people are just not very good at security: We are the weakest link and, as I am fond of remarking, it’s quite easy to fool someone with a fake picture of Brad Pitt, it’s impossible to fool their bot with a fake Brad Pitt digital signature.
It’s not a hard prediction to make that AI is going to change our industry just as its going to change every other industry. But I think it’s important to note that this is about more than saving a few people in the call centre or making slightly better credit decisions. The industry is going to be shaped by what customers do with AI and the evolution of agentic finance will lead to a very different kind of industry but it will be an industry that services its customers far better than the half-analogue, half-digital transition industry that we have today.
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.
