Members of President-elect Donald Trump’s transition team reportedly are considering making changes to some bank regulatory agencies by shrinking, consolidating or eliminating them.
These proposals have come up during team members’ interviews with potential nominees to lead the agencies, The Wall Street Journal (WSJ) reported Thursday (Dec. 12), citing unnamed sources.
The ideas floated in these interviews have included abolishing the Federal Deposit Insurance Corporation (FDIC) and shifting deposit insurance into the Treasury Department; eliminating the Consumer Financial Protection Bureau (CFPB) or limiting its responsibilities to consumer education; and either combining the FDIC, the Office of the Comptroller of the Currency (OCC) and the Federal Reserve or having only one of them continue to regulate banks, according to the report.
Historically, it’s uncommon to eliminate agencies or make major changes to banking regulations except during the aftermath of financial crises, the report said.
Eliminating agencies would require congressional approval, and while Republicans will have slender majorities in the House and Senate, Democrats are unlikely to support any major changes, the report said.
Democrats did eliminate a banking regulator after the 2008 financial crisis, per the report. The 2010 Dodd-Frank law eliminated the Office of Thrift Supervision by folding it into the OCC.
The banking industry is unlikely to support eliminating a banking regulator, according to the report. While banks often complain about the challenges of being overseen by multiple regulators, they also like to be able to shop between regulators and tend to prefer the status quo, the report said.
It was reported in November that banking regulators said a change in presidential administrations won’t change their approach to financial crime. While Trump may be focused on deregulation, banking industry experts said at the time at a conference that financial crime will remain a bipartisan focus.
On Nov. 24, it was reported that Trump and congressional Republicans are considering curtailing the powers and funding of the CFPB, as Republicans have opposed the efforts of the CFPB under Democratic control, accusing it of regulatory overreach.
The CFPB’s ambitious rulemaking agenda — which includes proposed rules covering everything from remittances to credit reporting to the use of financial data — faces new uncertainty after the election, PYMNTS reported Nov. 6.
Agentic artificial intelligence (AI) promises to improve operational efficiencies and the customer experience offered by enterprises.
The advanced technology is finding applications in loan underwriting and fraud detection, and now it’s moving across borders.
TerraPay Co-Founder and Chief Operating Officer Ram Sundaram told PYMNTS as part of the “What’s Next in Payments” series focused on exploring AI’s use in banking and by FinTechs that automated decision making and streamlined processes will continue to transform global money movement, especially as faster payments gain ground in cross-border transactions. That’s the inexorable trend, but as Sundaram put it, there’s still room, and a necessity, to have some human interaction in the mix.
In terms of global fund flows, TerraPay’s single connection ties more than 3.7 billion mobile wallets together across 200 sending and 144 receiving countries, touching 7.5 billion bank accounts. As one might imagine, coordinating and enabling the transactions is complex.
“Obviously, in the best-case scenario, everything goes smoothly, but when things are not going smoothly, that’s when the customer queries come in,” Sundaram said.
It’s no easy task to find out straight away where a transaction is, as analysts and representatives at the company have to look at logs and query partner systems.
“A lot of that work is done manually,” said Sundaram, who added that the agents “know the corridors and the markets that they are working in, but it still takes some time.”
TerraPay is using AI models with machine learning to bolster customer support and automate tasks as financial institutions (TerraPay’s client base) send payments in real time, and those payments are processed into local markets’ beneficiary banks.
“We still don’t trust [AI models] to let them respond to the customer straight away, but we can do the analysis, and then that gets reviewed by an agent who decides if [information] is accurate or not and then sends it off,” Sundaram said.
The same principles are guiding AI models and company practices to improve technical and security operations, analyzing and categorizing anomalous transactions and automating integrations with partner firms.
“Compliance is an issue where there is a lot of review needed of the alerts, and we are using [AI models] to speed up those processes,” Sundaram said.
Asked by PYMNTS about how agentic AI can be harnessed, he said: “In financial services, you can’t take chances on technology like this, which has the freedom to go wrong. You have to be careful about making sure that it’s 100% reliable before we can let things run entirely by automation.”
Agentic AI also remains pricey. For example, OpenAI is charging $20,000 a month for its specialized agents. However, Sundaram said the industry will become commoditized quickly, which will lower prices, and some open-source offerings are capable.
“There’s a fire hose of news about breakthroughs and new ideas and new ways of doing things that are coming out on a daily basis,” he said.
Data underpins it all, and Sundaram told PYMNTS that no matter what the application, the information fed into the models must be clean. Most organizations have a range of data sitting in different intra-company silos, and those silos need to come down.
In addition, the data must be structured so that it is accessible and can be synthesized by the models. Many firms may have more than 1,000 software-as-a-service (SaaS) resources to which they are subscribed but are not accurately tracked or monitored.
“Every database is separated, each one sitting somewhere else,” he said.
The days of stitching together those separate SaaS offerings to run an enterprise are ending, he said, and we’re headed to a future when data is collected in one place.
AI models and agentic AI “are extensions of what we’ve always valued at TerraPay, which means building the most efficient infrastructure possible in order to make sure that transactions are processed safely, quickly and affordably,” Sundaram told PYMNTS. “We see AI and [AI models] as powerful tools that help us scale all this very quickly while making sure we build more and more efficiency into the system.”
