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When It Comes to Chatbots, Banks Are Falling Behind Fintechs

Once artificial intelligence achieved conversational capabilities, organizations rushed to deploy AI in customer service use cases like fast-food drive-thrus and online shopping. Financial institutions followed suit, leveraging AI chatbots and virtual assistants to help customers navigate digital and mobile banking experiences.

While the effectiveness of these tools varies, one of the glaring issues with many banks’ chatbots is not their knowledge base—it is their reluctance to address the topics most critical to customers.

As Dylan Lerner, Senior Digital Banking Analyst at Javelin Strategy & Research—along with Red Gillen and Mark Schwanhausser—discussed in the What Lenders Can Learn from Fintech Chatbots report, consumers’ strong preference for digital interactions has elevated chatbots into a primary messaging channel. As a result, financial institutions must identify their chatbots’ blind spots and adjust accordingly.

Read more at PAYMENTS JOURNAL

Stablecoins Expand in Payments, Yet Most Activity Remains Internal

While stablecoin usage in payments is expanding quickly, most current activity is still concentrated in internal use cases rather than external payments. Although total stablecoin transaction volume is estimated at roughly $35 trillion annually, the portion tied specifically to payments is closer to $390 billion.

That’s according to data from McKinsey, in collaboration with blockchain analytics provider Artemis Analytics, which found that the vast majority of that transfer volume reflects trading activity, internal treasury movements, and automated blockchain transactions rather than real-world payments.

“They’ve been an outstanding internal product because they let players like exchanges, custodians, market makers, and even protocols rebalance liquidity and settle transactions 24/7 and near instantly,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “No waiting for banks to reopen over night or during the weekend—they’re an ‘always on’ digital cash. This also reduces friction between parties, enables greater capital efficiency, and allows for programmable controls.”

Read more at PaymentsJournal.com

Lending Is No Longer a Process, But a Race. Most Banks Are Already Behind.

The lending environment is undergoing a total reset in terms of structure. The conventional lending platform, which took weeks to complete manually, is being rebuilt entirely using artificial intelligence.

What took banks in the previous setup 15 to 20 days to accomplish could be accomplished in a matter of hours, and most importantly, in a manner consistent with these guidelines without necessarily being under direct human observation.

The pace of change is not gradual; it incorporates a model which remolds financial institutions in terms of competitive advantage.

Need to Know:

• Lending has officially become a speed business. AI-driven loan origination is collapsing timelines from weeks to hours — and customers now see delays as incompetence, not due diligence.
• The traditional lending stack is being rebuilt from the ground up. Manual, sequential workflows are giving way to AI systems that automate underwriting, credit assessment and compliance simultaneously.

Read more at The Financial Brand

White House Says CFPB Drove $350B in Extra Borrowing Costs

Key Takeaways

• Since 2011, the Consumer Financial Protection Bureau has cost consumers between $237 billion and $369 billion, according to the Council of Economic Advisors.
• A Senate report states that President Trump’s efforts to end the CFPB have cost consumers $19 billion.
• A weakened CFPB means less of a regulatory risk for lenders.

The White House Council of Economic Advisors (CEA) estimates that since 2011, the Consumer Financial Protection Bureau (CFPB) has cost consumers between $237 billion to $369 billion in, among other things, fiscal costs, increased borrowing expenses, and reduced originations.

In particular, the CEA finds that increased borrowing costs amount to at least $222 billion to $350 billion from the CFPB’s inception in 2011 through 2024.

Read more at BadCredit.org

New Bill: Senator Jack Reed introduces S. 3793: Predatory Lending Elimination Act

We have received text from S. 3793: Predatory Lending Elimination Act. This bill was received on 2026-02-05, and currently has 15 cosponsors.

Here is a short summary of the bill:

The Proposed Predatory Lending Elimination Act is designed to amend the Truth in Lending Act by extending consumer credit protections that are currently available to members of the Armed Forces and their dependents to all consumers. The bill introduces several key provisions aimed at limiting predatory lending practices and establishing maximum interest rates for consumer credit. Below are the main components of the bill:

Limitations on Consumer Credit and Interest Rates

The bill amends Chapter 2 of the Truth in Lending Act to include:

Read more at QUIVERQUANT

Solving for Fraud in Cross-Border Payments Requires Better Counterparty Verification

As information highways have opened new avenues to the global marketplace, many business owners have been attracted to these new frontiers. However, there are unique challenges associated with cross-border operations that go far beyond currency conversions and product delivery. When businesses start moving money across borders, it introduces more gaps for cybercriminals who are increasingly adept.

At the heart of these issues is counterparty risk. In the current cross-border payments model, the recipient of the transfer is often verified through a process built on manual callbacks and spreadsheets. Given the technologies that bad actors now possess, it has become a significant challenge to effectively verify counterparties in this fragmented process.

This has created a vulnerability that criminals can exploit. Because these attacks expose organizations to financial and reputational risks, it is critical for businesses to implement solutions that can optimize the verification process.

Read more at PAYMENTS JOURNAL

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Our #IRS Interactive Tax Assistant has answers.

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Email: jose.l.santiago@irs.gov

Fintechs Now Issue 42% of New Unsecured Personal Loans

Key Takeaways

• TransUnion's 2026 forecast projects modest expansion for mortgages and unsecured personal loans.
• Fintech lenders originate approximately 42% of all new unsecured personal loans.
• Delinquency rates have ticked up across major categories.

TransUnion’s 2026 forecast shows that the story is not expansion itself, but how lenders will execute it. Both the forecast and fourth-quarter 2025 data show lenders growing with tighter underwriting and controlled exposure. Lenders are deploying capital selectively as delinquencies rise and consumer profiles change.

Jason Laky, TransUnion Executive Vice President and Head of Financial Services, said lenders are taking a “disciplined approach to profitable growth, using more data and services to better manage risk and fraud.” That framing defines the moment.

Read more at BadCredit.org

U.S. National Average Student Loan Debt: Undergraduate vs. Graduate

While we’ve all heard the student loan horror stories, the truth of the matter is that loans remain one of the most effective — and, for some, the only — ways of paying for college. In fact, according to The Institute for College Access and Success (TICAS), about 7 in every 10 people who graduated from public and nonprofit colleges in 2015 carried student loan debt with them across the stage.

For many of us who choose higher education, the only real choice is to make peace with our student loans. The best way to do that is to do the right research, so you’ll know what you’re getting yourself into — before you sign on the dotted line. Becoming an informed borrower can make all the difference to your student loan experience, starting with how much you’ll likely end up owing upon graduation.

The Average Undergraduate Student Debt: $37,121

Looking at the numbers for the cost of a college education can be scarier than a horror film. A four-year degree, at a public college, will run a whopping $9,410 a year — and that’s for in-state students; double that if you’re an out-of-towner.

Read more at BadCredit.org

6.9% Subprime Auto Delinquency Rate Tops 2008 Peak

Key Takeaways

• The 60-day delinquency rate on subprime auto loans reached a new record of 6.9%, according to Fitch Ratings ABS Index and Equifax.
• For a subprime consumer, an auto loan delinquency means a drop in credit score, and the delinquency will stay on credit reports for seven years.
• For lenders, an auto loan delinquency may mean beginning the repossession process, writing off the delinquent loan as a charge-off, and selling the car at auction.

More subprime auto loan customers are slipping behind on their auto loan payments, with more people than ever falling 60 days late on their loans. 

According to Fitch Ratings ABS Index and Equifax, the 60-day delinquency rate on subprime auto loans has reached a record high of 6.9%. This 6.9% delinquency rate is greater than the 5% peak recorded during the 2008 financial crisis, Newsweek reports. 

Read more at BadCredit.org

'We are concerned': Scott Bessent says Treasury is keeping a close eye on the private credit market

Pressure on Blue Owl Capital (OWL) isn't letting up after an asset sale meant to calm investor worries last week sparked new concern from top government officials about the $1.8 trillion private credit industry.

"We are concerned," Treasury Secretary Scott Bessent said Friday when asked about the growth of Blue Owl and other private lenders over recent years. "If there is something rotten, it is not going to be handed to the individual investors," Bessent said.

Last Wednesday, Blue Owl said it sold $1.4 billion in loans and lending commitments from three of its funds, with some proceeds used to repay investors 30% of their capital from the oldest of those private credit funds, known as Blue Owl Development Corporation II (OBDC II), which is winding down after scrapping a planned merger late last year. 

Read more at YAHOO FINANCE

The American Dream of homeownership has become a luxury

Typical households will find themselves priced out of 75% of homes on the U.S. market, according to a new Bankrate analysis of real estate data. A closer look at what led to today’s housing affordability crisis, and whether relief is on the horizon.

Julia Sheers and her boyfriend want to buy a house. The housing market in Charlotte, N.C., just won’t let them.

They’ve run into the same wall as millions of other Americans: too few homes they can afford and too much competition for the ones that are in their price range.

Like many first-time buyers, the 29-year-old loan officer quickly discovered how steep the cost of homeownership has become when she started house hunting in May.

“If you told me a year or two ago that I’d be spending half a million dollars on a house, I would’ve thought you were crazy,” Sheers said. “But now it’s like, ‘Oh, that’s not bad. That’s a good price.’ Everything is definitely really expensive.”

Read more at BANKRATE

ICI Creates Treasury Roadmap on Trump Accounts

Washington, DC; February 20, 2026—The Investment Company Institute (ICI) today submitted a detailed list of recommendations to the US Department of the Treasury and the Internal Revenue Service (IRS) on how the agency can successfully launch Trump Accounts for the American people. The recommendations will support the effective implementation of Trump Accounts as the youngest Americans receive $1,000 from the government to launch their investment journey at birth. 

“ICI was one of the earliest supporters of Trump Accounts because we believe that introducing investing at birth can put young Americans on a path toward long-term financial security. The recommendations we submitted today are focused on ensuring Trump Accounts are implemented efficiently and in a way that promotes competition and investor choice, both of which are essential to making this program work for families over the long term,” said ICI President and CEO Eric Pan.

Read more at ICI.ORG

The Gift Card Shift: From Convenience to Core Shopping Strategy

The past holiday season didn’t just test consumer wallets—it revealed how dramatically shopping behavior is evolving. As inflation-weary shoppers searched for flexibility, value, and convenience, gift cards emerged as a central tool in how consumers planned, budgeted, and ultimately gifted. From promotion hunting to increased reliance on AI, the behaviors that defined the season are poised to shape retail for years to come.

In a recent PaymentsJournal podcast, Sarah Kositzke, Director of Research at Blackhawk Network (BHN) and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research discussed the accuracy of holiday shopping predictions, evolving consumer gift card habits, and how brands, retailers, and issuers can prepare for a dynamic year ahead.

Navigating Affordability Through Promotions

One of the most closely scrutinized aspects of the season was how consumers—under sustained pressure from inflation would approach holiday gifting. While BHN’s post-holiday research indicates that budgets were largely flat year-over-year, shoppers adopted new approaches to strategies to stretch their spending.

Read more at PAYMENTS JOURNAL

People Are Still Debating Credit Cards Versus Debit Cards

Do You Lose 'The Credit Card Game' If Even One Month Of Interest Is Charged?

A simple visit to the bank sparked a surprisingly heated debate online. After noticing frequent grocery and gas charges coming straight from a customer's checking account, a teller suggested switching to a credit card and paying it off in full each month. That advice opened the door to a bigger question many Americans still wrestle with: Is using a credit card instead of a debit card actually smarter?

The Reddit discussion quickly turned into something more pointed. One commenter summed up the stakes clearly: “Even one month’s worth of interest on most cards will wipe out the value of any points, cashback, whatever.” In other words, you might lose “the credit card game” if even one month of interest is charged.

The Security Argument

If there was one point nearly everyone agreed on, it was fraud protection.

Read more at BENZINGA

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Average tax refund is nearly 11% higher so far this year, IRS data shows

Early tax filers are enjoying bigger refunds compared to the same time last year, according to the latest figures from the Internal Revenue Service.

As of Feb. 6, 2026, tax refunds averaged $2,290, up nearly 11% from the same point last year. "Average refund amounts are strong," the IRS said in a statement last week. 

Forecasters have predicted filers would benefit from larger checks this year due to a series of new tax provisions included in the "one big, beautiful" bill signed by President Trump in July 2025. One financial services firm, Piper Sandler, estimated the average payment would increase by about $1,000 per filer. 

The biggest benefits are likely to flow to those in the top 10% of households, experts have said. Lower-earning taxpayers will also see gains, but they aren't as likely to enjoy as big a jump in refund amounts as higher-income households, according to a Jan. 30 analysis from investment firm Principal Asset Management. 

Read more at CBS NEWS

Lower down payment barriers make homeownership attainable

Several credit unions have launched or enhanced programs that reduce down payment requirements for members struggling with housing affordability. SchoolsFirst Federal Credit Union, Superior Credit Union, and Redwood Credit Union are among those helping prospective buyers overcome a primary obstacle to homeownership.

With only 17% of California households able to afford a median-priced home and first-time buyers nationally facing their steepest down payment requirements since 1989 , SchoolsFirst Federal Credit Union has reduced its down payment requirement from 5% to 3% of the purchase price. The change can save members $17,000 on a typical California home.

The nation’s largest credit union serving school employees announced the enhancement in January, building on an existing benefit that waives private mortgage insurance. In a state where the average home sells for $875,000, a 3% down payment totals roughly $26,000, compared to $43,000 at the previous 5% threshold. The credit union serves 1.5 million members across California through more than 70 branches.

Read more at Americas Credit Unions

CLOSED TRANSACTIONS

1. Specialty Finance Company. $50 million Senior Credit Facility

2. Small Business Finance Company $25 million Senior Credit Facility

3. Consumer Installment Lender. $240 million Forward Flow Agreement

4. Cambridge Wilkinson Investment Bank Closes Sale of $80MM+ Consumer Loan Portfolio

Treat insurance as a vital part of financial planning

As South Africa joins the global observance of World Investor Week 2025 (6-12 October), the South African Insurance Association (SAIA) has issued a considered appeal to consumers to broaden their understanding of financial wellness.

While budgeting and investment remain central pillars of financial planning, SAIA emphasises that non-life (asset) insurance is equally vital in safeguarding individuals and households against unforeseen financial shocks.

According to SAIA, non-life insurance, which includes cover for motor vehicles, homes, and business assets, plays a critical role in promoting financial resilience. It enables consumers to transfer the financial risk associated with unexpected loss or damage to an insurer, thereby preserving personal wealth and facilitating recovery. SAIA encourages consumers to view insurance premiums not as discretionary expenses, but as strategic investments in long-term financial stability.

Read more at INDEPENDENT ONLINE

How Personalized Financial Services Can Bridge the Generational Divide

With a trillion-dollar generational wealth transfer on the horizon, financial services marketers need to prepare to meet the varying needs and priorities of Gen X, Millennial and Gen Z beneficiaries.

Baby Boomers are expected to pass down trillions of dollars in wealth in the coming years, estimated to be in the mid $60’s to $90’s. The Gen X, Millennial and Gen Z heirs to this wealth may have less experience in traditional wealth management than their elders, but they will have solid yet varying priorities and goals. While the dollar amounts are impressive, these consumers will have specific wants and needs for housing, managing and growing their resources for their own heirs. Knowing what is important to them is necessary in order to create meaningful customer relationships — and key to developing a successful financial services marketing strategy.

Digital Dynamics

Digital-first will be top of mind for younger generations. With access to dynamic tools and methods for tracking and managing their portfolios, these consumers will expect much more from them both in performance and benefits.

Read more at The Financial Brand

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The number of US parents bankrolling their adult kids reaches a new high, with an average $1,474/month. Why it may be time to cut the financial cord

As parents, we know our job doesn't end on their 18th birthday. But for many parents of adult children, financial support is now stretching well into their child’s middle age. According to 2025 data from Savings.com, half of parents with adult children provide at least some financial support, a three-year high.

Parents of adult children ages 18-28 give an average of $1,813 monthly, while parents of those 29-44 provide $863 monthly. This help often includes covering recurring expenses like phone bills, car insurance, health insurance, or even student loan payments (1).

Rising housing prices, higher grocery bills and student loan debt have made it harder for young adults to hit traditional milestones. As a result, parental financial support is becoming the norm, even for adult children with full-time jobs.

Read more at MONEYWISE

Why the Rise of AI Makes Branches More Important than Ever

A funny thing happened on the way to banks’ collective AI future. Instead of eclipsing bank branches, the explosion of AI tools and tech has actually made them more important to the industry’s distribution mix.

This won’t be a permanent state of affairs. But for the foreseeable future, branches will move to the fore as banks and credit unions fend off rising invisibility wrought by GenAI and consumers are confused by ever-multiplying financial services options.

Here’s why: “In a world where it’s increasingly difficult to sort what’s real from what’s fake, something solid projects safety and soundness,” according to Accenture’s new Top Banking Trends report for 2026. “The branch will become an increasingly important, brand-strengthening counterbalance to an AI-driven world. (Witness all the Apple stores.)”

This isn’t to say that digital technology and AI in particular won’t be significant to the industry’s future. In fact, “technology will evolve from a back-office enabler to the very fabric of banking,” the report says, “powering real-time decisions and hyper-personalized services.”

Read more at The Financial Brand

Survey Shows Digital Payments Tipping Point For CU–Fintech Collaboration

NEW YORK— The most revealing shift in credit union innovation may be this: two-thirds of U.S. CUs now rely — or expect soon to rely — on outside fintech partners for mobile and digital payments, according to a January PYMNTS Intelligence report produced in conjunction with Velera.

That finding sits at the center of “Credit Union Innovation Readiness: How Credit Unions and FinTechs Are Innovating Together,” a PYMNTS study based on surveys of 500 credit-union executives and 100 fintech firms. PYMNTS said the research shows how rapidly these partnerships have moved from experimentation to routine operations.

According to PYMNTS, more than half of credit unions now view fintech partners as essential to innovating faster and competing effectively, while nearly two-thirds said those relationships help them scale and move more quickly than they could alone. The report portrays collaboration as a structural change, not a temporary trend.

Read more at CUToday

Your Bank’s Oldest Competitive Edge Just Became Your Biggest Liability

Banking’s historic competitive moat — scale — is facing its first genuine challenger in a century. According to PwC research, speed now rivals size as a differentiator: Thanks to AI, smaller institutions can access the same intelligence and decision-making power previously reserved for the largest banks creates fundamentally different competitive dynamics.

The shift from efficiency-focused AI to what Sean Viergutz of PwC (in a recent episode of the Banking Transformed podcast) called “agentic teammates” — autonomous systems orchestrating tasks across organizations — will determine which institutions defend their positions versus which lose ground.

According to Viergutz, success requires three elements working together: executive leadership treating AI as a strategic imperative, workforce transformation that positions technology as enhancement rather than replacement, and measurement frameworks assessing productivity gains invisible to traditional efficiency metrics.

Read more at The Financial Brand

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Why the UK Is Exploring Instant Payments

The Bank of England is pursuing a public consultation on consumer payments, focused on making it easier for shoppers to pay without using a debit or credit card. The process could pave the way for a UK-based instant payments system akin to Brazil’s Pix or India’s UPI.

The announcement came during a speech by Sarah Breeden, the BoE’s Deputy Governor for Financial Stability. She cited Pix and Sweden’s Swish as examples of national systems that have succeeded by offering seamless mobile payments. “We want UK consumers to have the option to pay retailers in-store or online directly out of their bank accounts as a complement to doing so via card schemes,” Breeden said.

Setting Up Competition

Debit and credit cards currently account for nearly two-thirds of transactions in the UK. One reason Breeden gave for launching the consultation was the hope that greater competition could lower transaction fees for smaller retailers, which in the UK can pay up to four times more than large chain stores to accept card payments.

Read more at PAYMENTS JOURNAL

Nurses, PAs, primary care physicians sound alarm over proposed rule to cap student loans

Key takeaways:

• A proposed rule would cap yearly graduate student loan borrowing at $20,500 for advanced practice nursing programs.
• The proposed rule changes the definition of a professional degree, excluding practice nursing programs.

A proposed rule from the Department of Education would limit graduate students enrolled in advanced practice nursing programs to borrowing a maximum of $20,500 per year and $100,000 for life.

“This rule is short-sighted, because this is a time in our nation’s health care system where we need more people taking care of patients, not fewer,” Todd Pickard, DMSc, PA-C, DFAAPA, FASCO, president and chair of the board of the American Association of Physician Assistants, told Healio. “When you change how you finance education, what you are really impacting is the number of people who are going to go into health care.”

Read more at HEALIO