Hello! Kiah here. Welcome to Fintech Takes Banking, my weekly newsletter where I highlight things I think are interesting or important for bankers and the surrounding environs.  

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Notebook Dump: Alloy Labs Insights, Chase Bank Update

Alloy Labs Alliance held its annual member meeting in Nashville last week, and for the third year, I was lucky to be a fly on a wall (OK, a local attendee and a panelist on Breaking Banks: Hot Takes).

Alloy Labs Alliance is a consortium of financial institutions that learn from one another and collaborate to build differentiated products and approaches. I am fortunate to consider CEO Jason Henrichs a good friend and have had both him and Madeline Fredin, vice president of partnership strategy, on my podcast this year.

The meeting is conducted under Chatham House rules, which means today’s newsletter is a mix of observations shared on the stage or from the floor, along with some relevant news items and my observations. Oh! Stick around at the end, there’s an exciting update to a recent newsletter of mine.

Claude called my argument “a coherent, if morally bankrupt, strategy” during episode prep. Guess you’ll have to wait for the episode to come out to see what I was talking about!

What Do Customers Want?

An overarching theme of the two-day meetings — and really, the North Star of financial service companies the world over — was spending time thinking about what customers want and how their financial institution(s) can address, solve or assist with it. There isn’t one overarching monolithic answer: financial institutions serve lots of customers, and what customers want will change across a financial institution’s segments and business lines.

But to answer that question, there’s probably another one to grapple with: How should banks even think about their customer segments? One bank doesn’t use demographics, instead opting for customer intent. What is the customer planning on doing or needing to do? They also conceptualize products and services using Amazon’s method of working backward by starting with a press release first. The press release describes what the product does and what customers say about it.

Macroeconomic Trends, Microeconomic Decisions

The amount of stuff going on in the economy is, in itself, its own newsletter. But there was an interesting macroeconomic question posited on stage: Can the U.S. economy create jobs anymore? (Put another way: Net new jobs? In this economy?) An April paper from Federal Reserve researchers observed that the growth in the labor force has slowed and could hit “near zero” this year — a phenomenon that would be “unprecedented in the United States’ recent history.”

This means the breakeven unemployment rate, or the pace needed to maintain a steady unemployment rate, would also be near or at zero. No growth in the labor market also means any growth in gross domestic product would come from productivity. The researchers wrote that “These features would represent a significant shift in U.S. labor market dynamics and the composition of economic growth.”

Numbers for bankers to keep an eye on going forward to get a sense of inflationary pressures and economic trends:

• The 10-year Treasury yield going above 4.5%. It was 4.47% on May 15, according to the Federal Reserve Bank of St. Louis. The Federal Reserve’s May Financial Stability Report noted that yields on the 2- and 10-year “rose modestly since the November report and continued to be well above their average levels over the past 15 years.”

• The consumer price index, or CPI, going above 3.5%. Too late! It was 3.8% for April. ¯\_(ツ)_/¯

Enter Artificial Intelligence

Bankers are down with AI — to a certain extent. Using it in the back office to do tasks that employees don’t want to or like doing was an uncontroversial use case. There wasn’t much discussion of using customer-facing agentic AI, but some banks are using AI tools to assist customer-facing employees if something is changing in the customer relationship. An emerging legal issue with AI — beyond the table stake topics of cybersecurity and privacy — is third- and fourth-party risk, consumer opt-outs and the ability to delete data.

But banks right now are sometimes struggling with prioritizing use cases, which can feel like a scattershot exercise. Executives discussed efforts to calculate the return on investment of these proposed use cases, including calculating the employee hours saved and number of employees impacted by the use case.

While it’s not clear what banks will do when it comes to AI, participant sentiment seemed to indicate that they wouldn’t be waiting on their cores to provide those tools. While one bank hoped the core would support integration with AI tools, someone else’s bare minimum was that the core wouldn’t impede their objectives and use cases.

But to their credit, the cores themselves have announced new AI tools for bank customers, sometimes in partnership with the large labs. FIS announced a recent partnership with Anthropic to build a financial crimes AI agent, and that BMO and Amalgamated Bank will be among the first financial institutions to deploy the agent. Fiserv also launched an agentic AI operating system for financial institutions that it is codeveloping with six financial institutions, with two agents in beta. Both of these functionalities are expected to be widely available in the second half of 2026.

What About The Regulators?

All banking conferences must talk about The Regulators. These particular discussions were well-timed to my recent newsletters looking at the supervision priorities at the federal banking agencies alongside their changes in total head count.

Executives shared their recent exam experiences. One banker said their exam was “night and day” different, and that supervisors were much more tech-forward. Another banker noted their examination team was made up of young supervisors with accompanying trainees. A specialty examiner attended an exam for one day at an institution with an embedded finance line; that examiner’s feedback was read to the bank staff verbatim by the remaining examination team.

It’s my impression that the verbal supervisory feedback is distinctly optional, relative to the written feedback — “These are observations and recommendations and not necessarily supervisory issues” and whatnot. A bank can take the feedback as seriously as the report, or to some degree less seriously. This bank said it was doing the former, but other banks may accept the risk of not acting on the feedback.

Another regulatory shift, outside of supervision and examinations, is that innovation and using AI is mostly cool now. Words like “support” show up a lot more now in official remarks, such as:

• “AI presents clear risks but also has the potential to offer tremendous benefits for cyber security. How should regulators think about this balance of risks?” asked Vice Chair for Supervision Michelle Bowman in a May speech. “Our approach should support banks in implementing AI tools safely, effectively, and efficiently.”

• “The OCC supports responsible innovation, including implementation of artificial intelligence (AI), as a means of modernizing the financial system and ensuring that banks of all sizes remain relevant and competitive,” the OCC stated in its Spring 2026 semiannual risk perspective. In a later part, it said, “Broader advancements in AI, particularly genAI and agentic AI, offer banks opportunities to automate and improve core operational, customer service, and other activities in novel ways and banks may consider expanding their use of genAI and agentic AI for material financial decisions.”

The overall takeaway at Alloy Labs this year continued one from last year: If banks don't pursue innovation now, there's never going to be a better time. There are still regulatory gray areas and state laws, but banks have the burden and the luxury of choice when it comes to how they want to innovate.

But the thing about being on a long leash? Be careful you don’t get tangled up in it.

The Rest of the Chase Bank <3 Chick-fil-A Story

Last month, I laid out a pretty compelling and extremely entertaining theory that Chase Bank locates its new branches near Chick-fil-A restaurants.

The evidence for this theory is my anecdotal experience of the Nashville expansion, which I laid out on a Google map, and a couple of comments from executives over the years. But there was, obviously, a way to test this theory using data. I could take lots of time to identify the 1,000 post-2019 Chase branches, download all of Chick-fil-A’s locations, map them against each other and sort those results by proximity. I could have, but it sounded like a lot of work and these newsletters do not write themselves (AI could never attempt such a magnum opus).

I wasn’t up to the task but Peter Given was. Peter is a subscriber and senior manager of partnerships and commercialization at the FinTech Center at the University of Utah. He used to work at Goldman Sachs & Co. in their anti-money laundering and Know Your Customer teams. He has a familiarity and confidence with Microsoft Excel that I lack.

Peter saw my thesis and said, “This seems like a cool problem, to see if there's an actual way to figure this out.” There was, and Peter found it! He and his buddy Claude built some Python scrapers to grab branch and restaurant locations, geolocated them on Google maps (which initially took six hours), and then finally built a proximity analyzer to calculate the two data sets.

Peter emailed me on April 27 with a spreadsheet that calculated the average and median distance between Chase branches and Chick-fil-As. How fun! But the analysis was too broad. The theory I postulated was that this proximity is most evident in the 2019 branch expansion; including the legacy branches would muddle the analysis.

Limiting the analysis to the post-2019 branches made Peter’s task much harder. Where would he find this specific data? He went back to the sources that pulled all the Chase branch data, which ultimately cited the Office of the Comptroller of the Currency. Poking around the site, he found the regulator’s corporate action notices, which are organized by year and then week. These notices would include an effective date for the opening of a new branch. Great! One hang-up, though: the notices annoyingly included Chase Bank’s corporate headquarters location in Ohio, rather than the address of the new branch, which required building another Python scraper to find the actual location of these branches.

But finally, he had a list of the post-2019 branches and their locations. He had the Chick-fil-As. He could calculate proximity. So based on the data and his analysis, does Chase Bank open branches near Chick-fil-As?

Sorry this is a little low-res. Reply to this email and I'll send you the spreadsheet if you want to see the underlying analysis.

“It's dependent upon the location,” he said. “If you look in the Southeast, where Chick-fil-A has probably had a heavier presence, then yes, that is true. If you look elsewhere, where there's less Chick-fil-A presence, like the Intermountain West, you can see there the average is higher because it's just more spread out.”

In the Southeast, the average distance between these two businesses is 1.61 miles, with a median of 0.92 miles. In the Intermountain West, it’s 9.22 miles and 2.26 miles, respectively. In Utah, where Peter is based, 75% of Chase branches are within half a mile of a Chick-fil-A location.

I don’t know about you, but I feel pretty vindicated by this data! It doesn’t feel coincidental that 38.7% of the 2019 branches are within a mile of a Chick-fil-A. So next time you see this unbeatable duo of businesses, you can feel confident of the proximate relationship. It’s not just this location or my crazy theory. It’s real, and we know it thanks to Peter.

DON'T MISS IT!

Tomorrow we’re getting specific about the treasury management issue hiding in plain sight at commercial banks.

Expect real talk about the problems most banks are dancing around, and the consequences of sitting on the sidelines.

See you there.

FROM THE VAULT

What’s on my mind and filling my time:

🔱 It belongs in a museum!: OK, yes, but what if an antiquity’s path into said museum was a crime? Learned so much about looting and smuggling from this article in The Atlantic. Here is a bonus article about the Nashville Parthenon’s experience trying to repatriate looted artifacts that wound up in its collection. Also, shout out to everyone who wanted to be an Egyptologist when they were growing up/maybe still will if this writing thing doesn’t work out.

☀️ Since it’s that time of the year: Friendly reminder that sunscreen is a qualified HSA/FSA expense! If you’re a broken points maximizer, this is a great reimbursable expense for your favorite credit card. I bought the Sephora 2026 Sun Safety kit, which has lots of sunscreen samples that I throw into all my bags, and I’m working through my giant container of Supergoop sunscreen (not referral links).

🎙️ On Bank Nerd Corner: I talk about whether rocket science or commercial payments are harder with Darren Beyer, chief product officer at Qolo. Darren tells me his opinion and discusses trends and challenges in the commercial payments space. It’s a great lead-up to my virtual event with Qolo tomorrow.

🛫 Catch Me At: the Open Banker Salon on June 5 in Washington.

Hi friends, I am accepting mailbag questions and suggestions/topics for forthcoming content. Let me know if you have any! And as always, thanks for reading. Let me know your thoughts on this piece. 

– Kiah