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 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. This is another entry in the “Fintech Takes Banking field trip” series, where I spend some time in a place thinking about its role in shaping the financial services landscape and broader economy. Previously, I visited the New York Fed. Today, we’re headed to the Federal Reserve Bank of Atlanta. Thank you to the Atlanta Fed comms team, who made this possible, and to Lali Shaffer and Chris Colson for sharing their bank facts and insights with me! Was this email forwarded to you? Sponsored by MX Are financial institutions underestimating the power of customer engagement? A Trip Down Transaction AlleyIf Congress were debating what cities should host a Federal Reserve Bank today, Atlanta is an obvious choice for the Deep South. It is the region’s largestand most populated metropolitan area, and it has the busiest airport in the country. There might be some other considerations, like the fact it probably isn’t as vulnerable to hurricanes and flooding as other cities located along the coast. That choice was not as obvious in 1913, after President Woodrow Wilson signed the Federal Reserve Act. New York, of course, made sense to host a Reserve Bank. But the Deep South was “probably the least ‘federal’ region of the country,” according to the Atlanta Fed’s own history page. At the turn of the 20th century, monetary capital was still concentrated in the North and a robust banking system was “slow to develop” in the South, according to the Atlanta Fed. It was mostly populated with small state-chartered banks that, at the time, were notorious for being “poorly regulated” and “poorly capitalized.” The South would not be an easy geography to serve. Then and today, it is economically impoverished compared to other districts. It is a large footprint with a mix of metro areas along with rural, agrarian communities that were often dependent on the success of one crop. A Reserve Bank could make an outsized impact in the region, and it maybe could even determine the fate of the host city. And so, cities across the South engaged in a boosterism campaign. The most obvious candidate city for a Reserve Bank in 1913-14 was New Orleans, according to the Atlanta Fed’s history page. It had a population of 361,000 and banking deposits of $75.2 million, compared to Atlanta’s population of 179,000 and banking deposits of $35.9 million. Other contenders were the historic port towns of Savannah and Charleston and steel town Birmingham. Florida at this time was swampland with 70,000 residents. But Atlanta was a Southern rail hub, and it was closer to Washington than some other contenders. The Atlanta Fed opened in November 1914. Today, the Sixth District covers Alabama, Florida, Georgia and sections of Louisiana, Mississippi, and Tennessee. It opened the first, last and most of any branches within the Fed districts.  Source: Federal Reserve Bank of Atlanta Some Fun Facts I Learned About the Atlanta Fed
 A cash cow! From Checks to ACH but also Back to ChecksI would love to share more historical highlights of the Federal Reserve of Atlanta — the cotton booms and busts, this weird dispute about clearing checks at par — but we’d be here all day. Instead, let’s talk about checks. The Federal Reserve still processes checks. This important role has waned over time, but at its founding was critical in moving funds in a safe, efficient and accurate way between institutions in the district for their customers. It has also been a catalyst for innovation at the Atlanta Fed, shaping the current payments landscape and creating a symbiotic relationship with the city it resides in. Check clearing was an extremely manual process even through the 1960s. At this time, skilled operators could process 1,200 to 1,500 an hour, which included punching in payment amounts and bank identification numbers into gray, 36-pocket IBM 803 proof machines and pushing checks into a slot in the machine. In November 1963, the bank installed an IBM 1420 high-speed bank transit system that could process 50,000 checks an hour. But the real innovation wasn’t in squeezing more efficiency out of manual processes; it was in changing the process. In the late 1960s, the Atlanta Fed began a collaboration with the Georgia Institute of Technology to build a modern payment system. The city’s commercial banks agreed to fund most of the investment expenses if the Fed operated the system. These banks wanted to replace the payroll and bill pay checks with the electronic entries that transited through what became the Federal Reserve System’s first clearinghouse, which was operational by 1973. The Atlanta ACH was the prototype for ACHs in other districts, according to the Fed’s history. Payments activity has shaped the Atlanta Fed in a big way. By the 1990s, the Atlanta Fed was the headquarters for the System’s Retail Payment Office, which directed strategic retail payment activities of all reserve banks and is today known as the Payments Forum. This group produces two iconic payment surveys: the Survey and Diary of Consumer Payment Choices and the Federal Reserve’s Payment Study. Despite Atlanta processing a lot of electronic payments, there’s still a percentage of transactions that have the tangible, physical elements. Today, the Atlanta Fed is the last of the Fed’s check processors, and it processed 11 billion last year, said Chris Colson, an Atlanta Fed payments expert. And the Reserve Banks assist with the physical collection, inspection, storage and distribution of currency across their Districts. This task takes on special meaning in the Southeast during hurricane season. Chris said the Atlanta Fed monitors weather reports and preemptively distributes cash ahead of expected landfall to meet demand and get ahead of power outages. Just PeachyOutside the marble walls (sourced from a quarry in Tate, Georgia), payments have also shaped Atlanta. In 2016, the chair of FinTech Atlanta estimated that 70% of all transactions globally pass through companies headquartered in metro Atlanta (Although I haven’t seen any data supporting this statement). Promoters call Atlanta “Transaction Alley,” which has a certain appeal. There were more than 260 fintech companies headquartered in Georgia in 2025, according to the Technology Association of Georgia; this is in addition to firms with a significant presence in the city. Further fostering the Transaction Alley reputation, the state’s Department of Banking and Finance created a Merchant Acquirer Limited Purpose Bank charter, which allows “entities engaged in merchant acquiring or settlement activities to directly access payment card network.” It’s payments all the way down. The Atlanta Fed has a strategic priority of economic mobility and resilience for its district, said Lali Shaffer, director of the Fed’s Payments Forum. The Sixth District’s population is representative of the entire United States, which gives Atlanta a unique research position. Lali said the Atlanta Fed can convene different stakeholders interested in these issues, including its member banks, other regulatory agencies and industry players like tech firms to study these problems, conditions and potential solutions. (Speaking of an Atlanta gathering: Federal Reserve Governor Michael Barr gave remarks at EMERGE Financial Health’s 2026 conference, held last week in the city.) The research and outreach team can interface with local operators in the city to identify emerging risks in the finance sector or broader economy. And the Fed can also help businesses understand their regulatory and compliance obligations, creating an exchange of information. “That's the other benefit of being here, on payments’ leading edge and having those contacts with the locals and to understand what they’re thinking about and their concerns,” Chris said. “What we bring to the table is the voice of the industry.” In just over a century of operation, the Atlanta Fed has helped small rural banks ride out cotton collapses, facilitated payments during natural disasters and disrupted itself to keep up with payments innovations. In an increasingly digital world that sometimes renders geography insignificant, visiting the Atlanta Fed is a reminder of the organization — and people — working to further technology and payments innovation while pulling up pockets of the Sixth District into greater financial access and inclusion.  Seal of the Federal Reserve Bank of Atlanta Sponsored by Prism Data Want better risk management, more personalized offers, the ability to support customers earlier, improved servicing and more-informed account management? You already have the data — now turn it into actionable insights. Prism Pulse allows financial institutions to monitor customer cash flow continuously to detect changes in income, liquidity and spending in real time. The next phase of cash flow underwriting is here. Prism Pulse gives institutions the cash flow intelligence to see the full customer relationship and respond accordingly. CONSIDER THIS YOUR INVITATION Embedded payments are showing up everywhere in banking, but the infrastructure decisions a bank makes early can become a liability fast. On May 27 (next week!!), my Fintech Takes colleague Alex Johnson is sitting down with Ajay Gopalan and Ron Griswold from WEX to talk about what separates a payments stack that scales from one that quietly accumulates risk. It’s well worth an hour of your time. FROM THE VAULT What’s on my mind and filling my time: 🌆 Other things I did in Atlanta: Visited the Dior exhibit at SCAD FASH Museum of Fashion + Film and the High Museum of Art Atlanta, and had dinner at Talat Market. Recommend them all. And best of luck to the DOT and commuters as the state tries to cram more than a decade of road repairs into the weeks ahead of the World Cup! 🎨 Happy trees! An auction of a limited amount of Bob Ross original paintings to raise money for public broadcasting was a perfect opportunity to reflect on the value of a cultural icon whose cache came from teaching all of us his skills. This also reminds me of the documentary “Art for Everybody” about the life, death and legacy of Thomas Kinkade. 🎙️ On Bank Nerd Corner: I tell Alex a story about visiting the Atlanta Fed that didn’t make it into this newsletter (if you listen, you’ll understand why). We also talk about banks <3 AI and the dumbest story in banking this spring. 🛫 Catch Me: moderating a DIDMCA debate at the Open Banker Salon on June 5 in Washington.  Thanks for reading! Let me know your thoughts on this piece. And send me any questions, thoughts or theories for a mailbag piece I'd love to do! – Kiah | |||||||||||
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