AI stack powered by multiagent systems in banking; Releasing capital trapped in payment systems; IBAN-name check process from the customer's perspective;

This week’s Fintech Wrap Up dives into CBDCs vs. fast payments, the transformative role of AI and cloud in financial services, and stablecoins unlocking trapped capital in cross-border payments

Insights & Reports:

1️⃣ Key Similarities and Differences Between Retail CBDC and Fast Payments

2️⃣ Cloud and AI: Transforming Financial Services with Customer-Centric Innovation

3️⃣ IBAN-name check process from the customers perspective

4️⃣ Releasing capital trapped in payment systems

5️⃣ AI stack powered by multiagent systems in banking

6️⃣ Open Banking is great but monetization dreams are uncertain in the near term

7️⃣ Debanking: What you need to know

8️⃣ Six Payment Trends Shaping the Next Five Years

9️⃣ Affirm strikes $4 billion loan deal with private credit firm Sixth Street

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TL;DR:

Let’s dive in with an insightful comparison between retail CBDCs and fast payment systems (FPS). While both share functional similarities—like supporting programmable payments and involving key financial players—they differ fundamentally in user claims: CBDCs tie back to central banks, while FPS aligns with commercial institutions. It’s clear both ecosystems need robust integration with existing financial systems as they evolve.

On the innovation front, cloud and AI are transforming financial services, helping banks and insurers optimize processes, from seamless onboarding to fraud prevention. Forward-looking players are leveraging generative AI and cloud-based solutions for predictive analytics, hyper-personalization, and operational efficiency—showing just how essential customer-centricity is for growth.

Speaking of security, IBAN-name checks are adding trust to payments. This verification process allows payers to confirm account details, flagging mismatches and reducing fraud risk—an essential step as instant payments become fraudsters’ playground.

In global payments, stablecoins are proving to be game-changers. Unlike traditional payment rails, which trap billions in working capital due to slow settlement times, stablecoin transfers are fast, transparent, and cost-effective. Businesses can access funds up to six days sooner, improving liquidity and growth potential—a significant opportunity as cross-border B2B payments hit trillions.

For the future of AI in banking, multiagent systems are leading the way. McKinsey’s updated AI bank stack highlights how integrating decision-making, core tech, and engagement layers can deliver personalized, frictionless experiences for customers while enhancing operational agility.

Meanwhile, open banking remains a double-edged sword: fantastic for customer access and financial inclusion but tricky for monetization. High infrastructure and compliance costs have made profitability elusive, except for a few players like Perfios. As UPI dominates India's digital payments, it raises questions about long-term sustainability and pricing models.

On a more controversial note, debanking is back in focus, raising concerns about financial exclusion without due process. While banks can justifiably cut ties over compliance risks, reports of undue political influence highlight a lack of safeguards for customers and businesses.

That’s it for this edition! Stay tuned as the fintech landscape continues to evolve.

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Insights

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Key Similarities and Differences Between Retail CBDC and Fast Payments

Before exploring the motivations behind launching retail CBDC systems, fast payment systems (FPS), or both, it’s important to outline their similarities and differences. The extent of overlap between the two depends on their specific designs, as both CBDC and FPS systems exist on a spectrum. Some retail CBDCs may resemble fast payments more closely, while others differ significantly. Additionally, the dynamic evolution of both solutions means their similarities and distinctions may shift over time.

At a high level, there are three categories of transfer assets: public/central bank money (e.g., cash, central bank reserves, retail and wholesale CBDCs), private money (e.g., commercial bank deposits, e-money, some stablecoins), and non-liability instruments (e.g., cryptoassets). A key difference between retail CBDC systems and FPS lies in the nature of the claim held by end users. For CBDCs, the claim is on the central bank, whereas FPS end users typically hold claims on financial institutions. This distinction carries technical, financial, and regulatory implications, depending on the infrastructure supporting the redemption of commercial bank money at par. Another difference is messaging standards: while many FPS adopt ISO 20022, most live retail CBDC systems rely on proprietary standards.

Retail CBDCs and FPS share similarities at a system level. Both can support overlay services like programmable payments and composability. While CBDCs are often associated with distributed ledger technology (DLT), live CBDCs and experiments show that DLT is not a requirement. Similarly, while FPS typically use centralized technology, they could incorporate DLT components.

A retail CBDC ecosystem involves various players: the central bank (issuer, operator, overseer), private banks and non-banks (service providers), individuals, businesses, and the government. An FPS ecosystem includes similar participants, differing mainly in the type of money transferred and central bank roles.