FIS Frames Tokenized Deposits as Banks’ Answer to Stablecoins

As banks revisit the architecture underpinning payments, fraud controls and digital money movement, FIS’ latest earnings call on Friday (May 8) positioned the company connective tissue linking artificial intelligence (AI), tokenized deposits and regulated banking infrastructure.

That strategy framed the company’s first-quarter earnings call, where executives argued that financial institutions are shifting technology budgets toward platforms capable of supporting AI deployment inside tightly supervised banking environments.

The company also outlined plans to build AI agents focused initially on financial crimes investigations. As noted in the earnings materials, FIS estimates that roughly $2 trillion in illicit funds move through the global financial system annually, while anti-money laundering operations account for an estimated $35 billion to $40 billion in yearly industry spending.

CEO Stephanie Ferris said banks increasingly want AI systems that can operate inside established compliance frameworks rather than experimental standalone tools. “They are looking for us to help you really think about how do you deploy it in a regulated way,” she told analysts. “How is it auditable? How is it traceable?”

Banking Budgets Shift Toward Digital Infrastructure

In Banking Solutions, revenue rose 7.7% on a pro forma basis during the quarter year on year. Banking revenue increased 10.3%, while payments revenue rose 5.9%.

Recurring revenue growth within Banking Solutions reached 5.2%, and non-recurring revenue climbed 58.1%, helped by new distribution agreements with technology partners.

Executives repeatedly returned to digital banking, money movement and cybersecurity as the primary spending priorities among banks. Ferris said institutions are spending aggressively on payment infrastructure, fraud controls and digital customer experiences as they prepare for more automated banking environments.

“Demand is really strong,” Ferris told analysts. “They’re spending money in digital because obviously we’re all continuing to interact with them in a digital way. They’re spending money on payments and they’re really looking for how they’re going to be able to compete in a digital currency way.”

The company’s recurring annual contract value sales rose 24% year over year. Banking recurring annual contract value (ACV) increased 13%, while capital markets ACV climbed 45%. Lending-related ACV rose 63%, digital ACV increased 25%, and Money Movement Hub ACV tripled from the prior-year period.

FIS executives argued that tokenized deposits may give banks a more controlled path into digital assets than externally issued stablecoins. Ferris said banks want digital currency capabilities but remain focused on regulated infrastructure and practical use cases.

Capital Markets Faces Lending Slowdown

Capital markets revenue rose 2.9% during the quarter.

Still, executives acknowledged pressure inside lending-related businesses tied to market volatility and weaker debt issuance activity. Ferris said syndicated lending activity slowed as borrowers pulled back amid macroeconomic uncertainty.

Chief Financial Officer James Kehoe characterized the lending softness as temporary but said the company adopted a more cautious posture for the remainder of the year. “It truly is just a temporary slowdown in the market,” Kehoe said, while noting that lending-related recurring ACV sales still increased roughly 60% during the quarter.

Executives also discussed consolidation opportunities and cross-selling tied to the Total System Services acquisition. Ferris said banks are increasingly interested in combining issuer processing, debit, credit and core banking data to support more sophisticated customer targeting and credit decisioning.

The company reiterated its full-year guidance, including projected pro forma revenue growth of 5.1% to 5.7%. Shares slipped 4% in early trading on Friday.

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