Among the consumer that PYMNTS surveyed, 46.8% surveyed said they’d engaged with mobile banking apps at least weekly, equating to 11 “activity days” per month, more than the 6.7 days spent online shopping. More than 16% of consumers said they checked mobile banking apps daily.

All told, only 20% of consumers indicated that they did not use mobile or online banking offerings at least once a month. In the United States, across more than 12,500 individuals queried, just under half used mobile banking at least weekly, per PYMNTS Intelligence data.

We are only about two weeks into earnings season, but commentary and details tied to banks’ March quarter reports have highlighted the continued digital shift within financial services, where speed and convenience continue to draw customers toward setting up accounts and managing their money on their phones, while engaging with chat features and other self-service points of interactions. The rockiness of the macro-economic trends right now is not deterring continued investment in those experiences.

Growth in Active Mobile Customers

For example, JPMorgan’s earnings materials show that at the end of the latest quarter, the largest bank (by asset size) counted 59 active mobile customers up 8% year over year. CEO Jamie Dimon noted on the call with analysts that “the investment that we do in banks, branches, technology, AI is going to continue regardless of the environment.” 

Wells Fargo’s supplementals indicate that mobile-active customers at the end of the quarter were 31.8 million, up from 30.5 million last year.

CEO Charlie Scharf said on the call: “We’ve continued to invest in refurbishing our branches, while at the same time making enhancements to our account opening experience in both our digital and branch channels. In the first quarter, active mobile customers grew 4% from a year ago and digital account openings continued to grow.”

Retail bank branches declined at the end of the most recent period to 4,155, from 4,247 a year ago.

Displacing Cash

Bank of America’s CEO Brian Moynihan told investors: “Our digital engagement and sales continue to expand across all our businesses. We saw more than 14 billion log-ins in 2024.”

Erica, the bank’s virtual financial assistant, has surpassed 2.7 billion interactions since its inception. Transactions sent through Zelle at Bank of America are, the CEO said, “not only 3x the number of checks written by our Bank of America customers, but also 1.3x the number of checks written plus the number of cash transactions, taking money out of the ATM. It’s also worth noting that digitally-enabled sales in our Consumer business across the board reached 65% of total sales.” 

CFO Alistair Borthwick said on the call that “our new accounts continue to be predominantly opened digitally.” Seventy-eight percent of households were digitally active, up from 76% a year ago. 

Earnings material from the bank show that active digital users in the latest quarter were 49 million, up from 47 million last year. There were 3.9 billion active sessions logged in over digital and mobile channels in the first quarter, compared to 3.4 billion in the first quarter of 2024. Sixty-eight percent of check deposits were done digitally, up from 64% as measured in 2022.

As for further evidence of self-service activity, Erica interactions on CashPro Chat were 33.5 million, higher than the 32.5 million last year in the first quarter. Proactive Alerts and Insights were 23.4 million in the first quarter of 2025 compared to 21.2 million in the commensurate period a year ago.

And as PYMNTS reported in coverage of Capital One’s earnings, CEO Richard Fairbank said on the earnings call that with the pending acquisition of Discover, “we’re trying to build a bank with leaner economics that comes from not having branches all over the place, and also to be very, very modern in its technology and its digital experiences. In terms of the customer base that we attract to self-select a more digitally first kind of experience.”

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In a PYMNTS exclusive, Stripe detailed that the MALPB charter will allow the firm to broaden its payment processing offerings — in this case, to obtain direct membership in the U.S. with Visa and Mastercard and to process payments without a sponsoring bank (known as a BIN sponsor). 

Stripe’s membership with the card networks is a complement to existing processing and settlement activities and will not lead to a replacement of existing banking relationships or acquiring BIN sponsorships — nor is the MALPB a signal that Stripe is expanding into additional, traditional banking activities.

The scope of the charter is limited to merchant acquiring and does not include deposit taking or similar banking activities; the charter/application itself, as detailed here, mandates payment volume capital and various capital requirements that are based in part on traditional banking standards and also “capital standards and those applicable to similar entities currently operating as merchant acquirer members of card networks in the European Union (EU) under the framework established in the Payment Services Directive (PSD).” 

There’s some prologue here for membership in the United States, as the platform already is a direct member in nine markets around the globe, including in the United Kingdom. 

A Stripe spokesperson told PYMNTS that “over the past few years, as Stripe’s business has grown, we’ve significantly expanded the number of banking and other partners we work with,” adding that the Georgia MALPB is a “step follows in this strategic direction.”

Direct Relationships and Bypassing Processors’ BIN Sponsors

In terms of the mechanics of the membership, acquirers that are member networks directly process and settle transactions with Visa and Mastercard, and bypass BIN sponsors — where the result can be faster payouts and lower transaction fees for the acquirer while cementing merchant loyalty to acquirers as costs are reduced for both the acquirer and the merchant.

The direct relationships with the payment networks simplify the steps tied to debit/credit card transactions, and the intermediary relationships, where payment processors send transactions to the networks, the transactions are routed through BIN sponsors, and approvals are sent back through the processor before funds are released.

The Stripe news comes after Fiserv had received approval from Georgia’s DBF in the Fall of 2024.  At that time, and as PYMNTS reported here, CFO Robert Hau noted on an earnings call, “This is a special purpose charter that enables optionality for sponsorship for merchant acquiring. It’s important to clarify that Fiserv is not becoming a bank. Fiserv will not open branches, take deposits or write loans as traditional banks do.”

Only one other firm has received the charter since its 2012 launch, Credorax, an Israeli firm later known as Finaro before being acquired by Shift4.

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A recent PYMNTS Intelligence report, “The State of Digital Lending Readiness,” shed light on the varying degrees to which banks are equipped to handle lending in the digital age.

The August 2024 study, based on a survey of 45 senior executives at mid-sized banks, including community banks, regional banks and credit unions (CUs), reveals that while most financial institutions believe their lending processes are strong, the reality of their digital capabilities paints a different picture.

Digital lending readiness is defined as the technological and operational capabilities enabling banks to efficiently and securely process, approve and disburse loans digitally. The report highlighted that a key driver for digitizing and automating lending is the pursuit of operational efficiency and improved application experiences, yet many mid-sized banks struggle to keep pace with larger institutions in meeting customer needs.

The findings underscored a significant disparity in automation levels, with consumer lending processes being far more automated than those designed for small- to medium-sized businesses (SMBs). While 70% of financial institutions report having mostly automated consumer lending, only around one-third have achieved similar automation for SMB lending.

This automation gap translates to slower fulfillment times, with only one in four banks able to complete the loan process from application to disbursement for both consumers and SMBs on the same day. In fact, a mere 7% of banks can fulfill consumer loans within minutes, and even fewer can do so for SMB loans. The report also identified internal roadblocks hindering the adoption of digital lending platforms, including organizational reluctance, technical integration issues and budget constraints.

Here are three key data points from the report:

• Only 28% of mid-sized community banks, regional banks and CUs can fulfill loans to both consumers and SMBs on the same day. This highlights a significant bottleneck in lending efficiency for a large segment of the financial industry.
• The delinquency rate for consumer loans is 2.1% for banks relying less on digital lending platforms, compared to just 1.2% for those relying more on these platforms. This suggests that automation is not only linked to faster fulfillment but also to better risk management.
• 79% of banks worry about automation’s impacts on the customer-banker relationship, contributing to organizational reluctance in adopting digital lending platforms. This reveals a key cultural challenge in the shift toward digital lending.

Looking ahead, the report indicates a strong interest among banks in expanding automation, with 61% highly interested in moving to fully automated lending processes, and half aiming to do so within the next two years. Mid-sized banks plan to invest an estimated average of $186 million in lending innovation over the next 12 months.

Notably, financial institutions using digital lending platforms for more than half of their lending are significantly more likely to achieve faster loan fulfillment and lower delinquency rates. While approval rates remain similar across different levels of automation, delinquency rates are notably lower for banks with more automated processes.

Overcoming internal barriers and embracing digital transformation, including leveraging artificial intelligence, are identified as crucial steps for banks to enhance their lending operations, improve customer experiences, and remain competitive.

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The company aims to become a global financial services app, Revolut U.K. CEO Francesca Carlesi told the Wall Street Journal in an interview posted Tuesday (March 18).

Revolut’s app currently lets users make payments, trade assets and hold money, according to the report.

When Revolut U.K. finishes building and testing its banking operations — a process that usually takes companies about 12 months — it will seek British regulators’ approval to transfer its users to its new banking entity this summer and then expand its offering to include loans, overdrafts and mortgages, the report said.

The company already has a European banking license and operates in dozens of countries, per the report.

After gaining some more banking licenses around the world, it plans to accelerate its growth in the U.S., where it currently has 1 million customers but still has low brand recognition, the report said.

Industry insiders expect Revolut to launch an IPO in 2026, but the company has not confirmed its plans, according to the report. It was valued at $45 billion in a secondary share sale in November.

Carlesi told the WSJ that the company is well capitalized. “We can prepare for this properly and pick the right moment,” she said, per the report.

It was reported in February that investors in Revolut are pressing the company to consider a secondary share sale that would meet the demand of new investors for a stake in the company and would value the company at $60 billion.

A source told Bloomberg that Revolut is preparing to report roughly $1 billion in profit before tax for 2024, a figure that would be its highest profit ever, up from the $545 million it reports in 2023.

On Thursday (March 13), it was reported that Revolut was hiring 100 new staffers as it prepares to expand its U.K. banking business. The company expects to have a staff of around 200 by the end of the year.

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The FinTech received its long-awaited British banking license last summer — albeit with some restrictions — and has already begun building that side of its business, Francesca Carlesi, Revolut’s U.K. CEO, told Bloomberg News on Thursday (March 13).

She added that Revolut should have a staff of around 200 by the end of the year. The company received a banking license from the U.K.’s Prudential Regulation Authority (PRA) after a three-year wait. It was a process that took longer than normal, as Revolut underwent scrutiny related to its size and its financial reporting.

“We have been in constant and open dialogue with our regulators, to ensure our mobilization meets the highest standards,” Carlesi said. “We’re in no rush, as getting this right matters more, so once everyone is ready, we’ll launch the U.K. bank and begin to operate as one of the U.K.’s newest banks.”

The CEO added that Revolut has been able to test critical banking systems with roughly 30 customers who have 50,000 pounds (about $64,700) in total deposits. Regulators expect its stage to wrap up in 12 months, which means Revolut would become a full bank by July.

Once the PRA gives its go-head, Revolut can begin moving its millions of U.K. customers from its electronic money institution to its U.K. bank entity. Bloomberg noted that Revolut — valued at $45 billion — is one of the largest and fastest-growing companies to go this route.

Revolut’s group CEO Nik Storonsky has said trying to expand its business without bank licenses was a mistake, and that a smaller company would have had an easier time getting a license than one the size Revolut is now.

Sources told Bloomberg that Revolut is expected to publish its 2024 account next month. Bloomberg has reported that the company will report $1 billion in profit before tax, a record for Revolut and up from $545 million a year earlier.

Meanwhile, PYMNTS wrote in January about efforts by Revolut to enter the private banking space amid a changing regulatory environment.

As that report said, “there’s been a growing drumbeat for an easier path toward de novo, or new, bank creation. “At a recent Capitol Hill hearing, GOP Rep. French Hill of Arkansas, who chairs the House Committee on Financial Services, said there have been only 82 new bank charters granted in the past decade and a half.”

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This milestone, which was achieved in record time, positions the company to expand its innovative payment solutions and solidify its role in the global digital payments ecosystem. And as co-CEO Ralf Germer told PYMNTS’s Karen Webster recently, the swift approval is a testament to PagBrasil’s proactive approach to compliance and regulatory demands in the region, and will open up new avenues for PagBrasil to innovate and expand its product offerings. One immediate benefit is the removal of transaction limits on its existing products. Additionally, the license allows PagBrasil to offer cash withdrawals through Pix, Brazil’s instant payment system, at ATMs worldwide. This feature was previously unavailable without the license, according to Germer.

The Orchestration Economy

The PagBrasil business model was complicated even before the new license. It has established itself as a leading LatAm FinTech company, processing payments for eCommerce businesses globally. The company’s focus on innovation has also led to the development of unique products such as International Pix and Pix Roaming. International Pix allows Brazilian travelers to use Pix for payments abroad, while Pix Roaming enables foreign visitors to use Pix within Brazil. These solutions leverage Brazil’s widely adopted Pix system, which boasts 151 million active users, representing about 70% of the country’s population.

Here’s what a breakdown of those products, looks like:

• PagBrasil Pix: This is their core Pix payment solution for domestic transactions within Brazil. It allows merchants to offer Pix as a payment method, enabling customers to make instant payments by scanning a QR code or using a Pix code.
• International Pix: This solution extends Pix functionality to allow Brazilians to make payments abroad using QR codes. It works by generating a QR code that can be scanned by the customer’s Brazilian banking app, with real-time currency conversion.
• Pix Roaming: This product enables foreign tourists in Brazil to make Pix payments using QR codes. Visitors can scan the QR code using their own digital wallets or bank apps, with PagBrasil handling the currency conversion.

That business model relies heavily on what Webster calls the orchestration economy. As she wrote at the beginning of 2025, “at the start of 2020, we observed the convergence of single apps into ecosystems accessible through a single, digital front door. The rise of the connected economy for consumers, fueled by the global pandemic, meant downloading a single app like Instacart to order food and other essential items from dozens of stores or using their Uber App to book a ride, rent a car and have food delivered. At the halfway mark, (of the decade) we see that convergence intensifying — and the rise of what I call the orchestration economy, changing how businesses interact with each other and how services and capabilities will be accessed and delivered.”

Germer agreed that his company’s business model relies heavily on the orchestration economy, connecting with acquirers worldwide to offer Pix as a payment option alongside traditional methods like credit cards. “We connect into their platforms so that the merchant can offer payments with the same POS device apart from credit card processing, processing Pix at the same time,” Germer told Webster.

This approach allows PagBrasil to rapidly expand its reach without the need for direct merchant relationships. The company is seeing growing adoption of its International Pix solution, with transactions ranging from small purchases like coffee to luxury hotel bookings worth tens of thousands of dollars, he said.

Germer observes a shift in payment preferences among Brazilian travelers. “People get used to doing all their transactions with Pix. And when they travel abroad they want to pay the same way they’re used to paying in Brazil,” he said. This trend is challenging traditional payment methods like cash, cards and prepaid travel packages. Germer notes that while some digital wallets are still used, they are often linked to cards, which Pix is increasingly replacing.

Connecting Digital Wallets

PagBrasil, by the nature of its business model, is heavily invested in digital wallets. Looking at the broader payments landscape, Germer sees a future where digital wallets become increasingly interconnected globally. “We see that this is going to happen in Latin America and maybe even on a global level so that you will have the possibility with your banking app or your digital wallet to travel around the world and pay with a QR code wherever you go,” he said.

However, Germer doesn’t envision PagBrasil becoming a consumer-facing brand like PayPal, even with the new Brazilian license. “This is not in our plans that we become a company that has a contractual relationship basically with the consumer,” he said. “We will continue being an infrastructure provider.”

PagBrasil’s focus for the near future is on expanding its existing products to more markets and banking partners. The company is also working on adapting its technology to suit different cultural norms around payments, such as tipping practices in various countries.

Looking further ahead, Germer sees potential in the upcoming Pix Garantido (Guaranteed Pix) system. This Central Bank initiative will enable banks to guarantee future payments, potentially revolutionizing installment purchases and credit offerings in Brazil. Developed by the Central Bank of Brazil, this feature could impact purchasing habits in the country by allowing consumers to split their payments over time, similar to credit card installments. The system works by having the consumer’s bank guarantee future payments to merchants, effectively reducing the risk for sellers. Merchants benefit from receiving the full payment upfront, while consumers repay their banks in installments. Although the exact fee structure is yet to be announced, banks are expected to charge for this service to cover the associated risks. This expansion of Pix’s functionality is set to further transform Brazil’s digital payment landscape, offering more flexibility to consumers and potentially boosting sales for merchants.

“We won’t create something by ourselves. But it’s a product on the roadmap of the Central Bank,” Germer explains. “With that you can also offer payments in 30 days, 60 days, 90 days, or even more.”

With its newly acquired PI license and a robust pipeline of innovative products, PagBrasil is set to play a significant role in shaping the future of cross-border payments and the Latin American domestic economy.

“We are known in the market as the most innovative company, which is always at the edge of innovation in the market,” Germer told Webster. “And to be able to do that, we cannot have barriers of regulation that tell us we cannot do this, and we cannot do that because we don’t have a license.”

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Last year, the Reserve Bank of India (RBI) all but shuttered Paytm Payments Bank following warnings about data flows between it and its parent company.

Chief Executive Officer Vijay Shekhar Sharma told Bloomberg News Tuesday (Jan. 21) that he hopes the situation is a temporary one.

“As far as the bank is concerned, which is a separate entity, now we are pretty much at an arm’s length so it should get sorted out soon,” said Sharma, interviewed at the World Economic Forum 2025 in Davos, Switzerland. “We’ve learnt our lessons and we’ve dramatically changed our approach towards the business.”

The RBI — India’s banking regulator and central bank — announced in late last January that it was suspending business at Paytm Payments Bank after an audit found “persistent noncompliances and continued material supervisory concerns.”

Later reports said the regulator’s move followed two years of warnings about the questionable relationship between Paytm and its banking business arm, with the audit showing money and data traffic flow between Paytm Payments Bank and the larger company that sparked accounting and supervisory problems.

The Bloomberg report pointed out that the RBI’s move “severely” hurt Paytm, which relied on the bank for the bulk of its digital payments business. With the bank shuttered, Sharma was left scrambling to find partnerships with other FinTechs. The company also sold off its movie and events ticketing business to Zomato to help reduce expenses and is waiting for permission from India’s central bank to become a payments aggregator.

Now, Sharma is hoping to bring Paytm back to operational profitability, telling Bloomberg; “We’re on track for that. We probably showed the numbers also.”

As Bloomberg noted, Paytm had the payments market more or less to itself when it first launched, but now competes with heavyweights such as Google and the Walmart-backed PhonePe in the digital payments space. It lost ground to those companies last year after the bank was shut down.

Digital payments have long been popular in India, which launched the instant Unified Payments Interface (UPI) in 2016, further accelerating the country’s embrace of the payment method.

Research by PYMNTS Intelligence has found that digital wallets are the preferred payment method for 55% of retail purchases in India, with 80% of digital wallet users choosing UPI. Bank transfers are the second-most used underlying payment method, making up 12% of digital wallet payments.

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In this collaboration, Shastic’s workflow automation solution will be integrated with MeridianLink’s software platforms for financial institutions and made available through the MeridianLink Marketplace, Shastic said in a Monday (Dec. 2) press release.

“Part of what makes us unique is that Shastic is the first company to develop a specialized AI workforce for financial institutions,” Shastic Founder and CEO Josearial Gomez said in the release. “With MeridianLink, we will be able to make hyper-personalized workflow automation accessible to thousands of banks and credit unions across the U.S.”

Shastic’s workflow automation solution automates processes that are traditionally managed by employees, enabling financial institutions to increase their capacity and processing speed by 10 times, according to the release. Its platform is used by more than 50 financial institutions across the U.S.

MeridianLink’s scalable, cloud-based platform powers digital lending and account opening for financial institutions and is supported by a partner marketplace that includes hundreds of pre-integrated partners, per the release.

“This partnership reflects the similar missions of MeridianLink and Shastic to democratize lending for community banks and credit unions, making advanced solutions accessible to thousands of financial institutions,” the release said.

The MeridianLink platform was built to help middle-market community banks and credit unions “punch above their weight” in consumer lending,” MeridianLink CEO Nicolaas Volk told PYMNTS CEO Karen Webster in an interview posted in July 2021.

“We make the investment to take them digital,” Volk said. “All they need to do is pretty much run their business on our platform.”

Seventy-two percent of finance leaders are actively using artificial intelligence in their operations, according to the PYMNTS Intelligence and NCR Voyix collaboration, “Is AI the Master Key to Banking’s Next Era?”

The report found that AI applications in the financial industry range from fraud detection to customer onboarding automation, and that nearly all banking boards have approved generative AI initiatives.

Generative AI is also enhancing customer interactions and risk models, according to the PYMNTS Intelligence and AI-ID collaboration, “Banking on AI: Financial Services Sector Harnesses Generative AI for Security and Service.”

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The country’s digital banks saw their annual return on equity (ROE) rise from 11.45% at the end of December to 19.1% at the end of June, outpacing the banking system as a whole, which saw its ROE rise from 14.23% to 15.11%, Reuters reported Thursday (Nov. 21), citing data from the central bank’s Financial Stability Report.

The central bank said the increase among the digital banks was due to “positive effects of operational leverage through the monetization of customer bases by some institutions and lower pressure from provisioning expenses.”

Brazil’s digital banks include Nubank, Banco Inter and C6 Bank, according to the report.

During a press conference, Ailton de Aquino, director of supervision at the central bank, said that digital banks have a “robust” credit model and that their evolution reflects the central bank’s efforts to promote innovation and competition, per the report.

Addressing reports that Brazil’s largest digital bank, Nubank, was considering relocating to the United Kingdom, Aquino said the central bank is “aware” of that, according to the report.

It was reported Wednesday (Nov. 20) that Nubank is considering moving its legal base to the U.K., with the bank’s holding company, Nu Holdings, working with the British government to make the move.

A spokesperson for Nubank told Bloomberg that the company “continuously reviews its corporate legal structure” and has not made a decision on the move.

Latin America is a key target for FinTechs seeking to transform financial services, with the trend driven by digitally savvy consumers, underbanked and even unbanked populations, and a regulatory environment conducive to digital innovation, PYMNTS reported in September.

In May, Banco Inter said it plans to acquire the remaining 50% of merchant acquirer Granito, giving it full ownership of the company.

“By fully owning Granito, we will further enhance our value proposition to our customers, making our financial super app a full suite of solutions to business owners and entrepreneurs,” Joao Vitor Menin, CEO of Banco Inter parent company Inter&Co, said in a press release. “It also further expands our footprint in the Brazilian market.”

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These financial institutions (FIs) — including community banks, regional banks, digital-only banks and credit unions — foster deep customer-banker relationships with the small- to medium-sized businesses (SMBs) they know best, allowing them to win relationships that larger FIs have historically struggled to prioritize and service effectively.

However, as key financial services like lending become increasingly digital, many of these same banks now face formidable challenges. And while the need for digitization is clear, the journey to seamless, automated lending is proving to be a complex one.

Unlike their larger peers that are increasingly reliant on scale and digital sophistication to reach the masses, many community banks and credit unions continue to emphasize personal, high-touch relationships. This cultural reality can lead to a reluctance to pivot toward digital automation, particularly in SMB lending, where personalized advice and support are highly valued by small businesses.

At the same time, many banks simply lack the capital required to overhaul legacy systems, build new digital platforms and onboard specialized staff to manage automated processes.

For SMBs, the impact of these challenges can be profound. Manual loan processing is often rife with repetitive data entry, frequent follow-ups and extensive documentation requirements, all of which prolongs approval times. In a world where FinTechs and digitally fluent FIs can deliver SMB loan decisions instantly, traditional banks operating on manual systems often take much, much longer.

This inefficiency isn’t lost on customers. And the need to digitize shouldn’t be lost on mid-size banks.

Read more: Why So Many Mid-Sized Banks Fail the Digital Lending Readiness Test

The Competitive Implications of Digital Gaps

As large FIs and FinTech disruptors set new standards for speed and convenience in lending, mid-sized institutions risk losing ground.

“Eighty percent of small business owners say that having world-class, digital capabilities is extremely important and, frankly, expected from their bank,” Adam Hughes, CEO of Amount, told PYMNTS, noting that when small businesses start looking for the right lending experience, digital is “table stakes at this point.”

And PYMNTS Intelligence finds that while most FIs rate their lending processes as very good or excellent, three in four are unable to fulfill the loan process — from application through approval to disburse funds — for both consumers and SMBs in the same day. Just 7% of FIs have an average application-to-fulfillment time frame of a few minutes for consumer loans, and even fewer can do so for SMB loans.

Without more streamlined processes for small business loans, mid-sized banks can find themselves bogged down by manual workflows and slower turnaround times, areas that can lead to operational bottlenecks and preclude the benefits of efficiency.

Despite those benefits, for many mid-sized financial institutions, particularly those with strong roots in the community, digital transformation can feel like a threat to a carefully cultivated culture. PYMNTS intelligence revealed that there’s a prevailing fear that embracing a shift toward automation will create a transactional experience for borrowers, eroding the personal connection that’s at the core of their customer relationships. Nearly eight in 10 (79%) of FIs feel this way, reporting worries around automation’s impacts on customer-banker relationships.

With limited budgets, these institutions may delay automation initiatives or attempt to implement partial solutions that fail to deliver the desired improvements in efficiency.

Read more: The State of Digital Lending Readiness

The Reluctance to Digitize: ‘Old School’ Meets New Necessities

Implementing digital lending solutions is not a simple matter of flipping a switch. Mid-sized banks often contend with budgetary constraints that larger institutions are better positioned to absorb. With limited resources, many mid-sized FIs struggle to afford the technological investments required to develop robust digital lending capabilities. Additionally, they face the challenge of overhauling legacy systems that were not designed to support the automated workflows essential for digital lending.

For many smaller banks and credit unions, hiring and retaining top-tier tech talent is an uphill battle, particularly as competition for such skills intensifies across industries.

Despite the challenges, the momentum toward automation in lending is gaining traction within the mid-sized banking sector. The same PYMNTS Intelligence data cited earlier shows that 61% of FIs are planning to fully automate lending processes within the next two years, signaling a recognition of the need to catch up with larger and more digitally adept competitors.

“Lenders that typically have relied on in-person relationships and the more traditional modes of application intake, verification and contract signing are also increasingly leaning into digital and automation,”Andrea Moe, vice president of customer success at Amount, told PYMNTS. “Lenders can expand their reach, they can add new households, they can also deepen that wallet share within their existing base of customers.”

The next few years will be pivotal for mid-sized banks and credit unions. Those that successfully embrace automation will not only enhance their operational efficiency but also position themselves to better meet the evolving needs of SMBs. For these institutions, the challenge lies in finding a balance — leveraging technology to deliver speed and convenience while preserving the personal relationships that define their value.

The post Lend, Don’t Break: How Mid-Size Banks Can Overcome Digital Lending Growing Pains appeared first on PYMNTS.com.