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Many financial institutions have decided now is a better time to hire talent rather than buy another bank or credit union, enter new markets, or add business lines. The proof is in several high-profile recruiting announcements from small and midsize financial institutions.

CapStar Financial Holdings in Nashville, TN, will expand outside its home state for the first time after hiring a First Horizon banker in Asheville, NC. Encore Bank in Little Rock, AR, will move into Boulder, CO, after recruiting a former market president at Great Western Bancorp.

IC Federal Credit Union in Fitchburg, MA, hired former Avidia Bank executive CarrieAnne Cormier as its chief operating officer. Citadel Credit Union in Exton, PA, hired a team of bankers from Santander Bank with plans to launch a business banking division in August.

Columbia Banking System in Tacoma, WA, and Western Alliance Bancorp in Phoenix, AZ, are entering Salt Lake City after recruiting bankers from large competitors such as Bank of America, U.S. Bancorp, and Zions Bancorp.

Banks are also going after talent to grow or add new lines of business. RBB Bancorp in Los Angeles hired three bankers to beef up its Small Business Administration lending. Encore hired a banker to build a business banking community association.

Given recent headlines, stablecoin supporters may disagree with the saying, “there’s no such thing as bad publicity.”

TerraUSA, an algorithmic stablecoin, imploded in May. This hurt the valuation of numerous cryptocurrencies and cast doubt on Tether’s ability to sustain its own $1 peg. Thus far, Tether has defied the skeptics.

Amid this tense environment, it’s interesting to revisit the January headlines speculating that PayPal was mulling introducing a stablecoin. According to company officials, the rumor was based on source code embedded in PayPal’s iPhone app, which was inadvertently left behind after an internal hackathon.

It’s difficult to envision PayPal taking on this challenge soon. Meta’s ill-fated stablecoin foray via Diem/Libra illustrates the hurdles facing such an endeavor, especially one undertaken by a tech giant.

At the same time, it’s important to speculate on how such an offering might impact the broader market over the long term. After starting its life as the first true digital financial services disruptor, PayPal could, ironically, find itself cast as an enabler of traditional market stability due to recent crypto market turmoil.

 In our recent report, we made the case that banks and credit unions consider Buy Now, Pay Later (BNPL) as part of a holistic suite of payments products.

While a study from IntraFi Network found that four out of five small banks and credit unions are reluctant to get into BNPL, SRM believes that traditional FIs have the infrastructure to handle compliance requirements from agencies such as the Consumer Financial Protection Bureau.

Two recent developments are sending a message to credit card issuers that the regulatory and political winds are not blowing in their favor.

Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), on June 22 issued an advance notice of proposed rulemaking to assess if late fees charged by credit card issuers are “reasonable and proportional,” as required by the Credit Card Accountability Responsibility and Disclosure (CARD) Act.

Chopra’s notice came weeks after longtime card industry adversary Sen. Richard Durbin chaired a Judiciary Committee meeting exploring “excessive interchange fees.” While Durbin advocated for reforms, some of his suggestions would set the industry back by decades, likely ending the ability of small banks and credit unions to offer credit cards and directly harming consumers.

Though the outcome is uncertain, the trajectory is clear. Now is the time for a refresher course on the current rules of the road and for issuers to prepare for any potential changes arising during this period of heightened scrutiny.

While a number of financial institutions remain cautious about cryptocurrency, many use the underlying technology for other purposes.

The up-and-down swings of digital assets, and an uncertain regulatory climate, have kept a fair share of banks and credit unions on the sidelines. At the same time, FIs have shown a willingness to embrace distributed ledger technology (DLT) ahead of the volatile crypto market.

Several initiatives by the Consumer Financial Protection Bureau (CFPB) seem poised to increase competition between traditional financial services providers and fintechs.

An effort to regulate nonbanks has gained support from banks and credit unions. Still, the CFPB’s plan to make it easier for consumers to move accounts will pressure traditional financial institutions to offer more products and better services.

These initiatives are coming when the agency is scrutinizing overdraft and nonsufficient funds (NSF) fees, the CARD Act, and the terms and disclosures of Buy Now, Pay Later (BNPL) offerings – the latter a topic SRM recently wrote a report on.

All signs point to the need for banks and credit unions to buckle up in coming months. These expected changes will likely bring fintech even more into the mainstream and raise the stakes when it comes to recruiting and retaining clients.

In a recent conversation with a Colorado banker about tech strategies, he mentioned a looming investor meeting. He was putting together an overview and was trying to decide the best way to proceed.

"These are the people who provide the underlying support for what we're doing, so I want to make sure they know the road we're on will provide the value they want," he told me.

Financial institutions of all sizes are under pressure to find new revenue sources and solidify their status as customers' trusted financial advisors. One would think FIs would race to participate in a lending category projected to grow significantly in coming years – and one where 70% of consumers indicated in a recent survey that they'd prefer access through their bank.

That isn’t necessarily the case. Surprisingly, a study by IntraFi Network found that 80% of community banks and credit unions have no plans to introduce Buy Now, Pay Later (BNPL) services. A new SRM report details why FIs should closely examine this opportunity – not only as a revenue generator but also to defend current and future business.

Perspective matters when it comes to cryptocurrency.

The demise of the TerraUSD stablecoin has understandably spooked the markets. Any sudden freefall will panic people and make them wonder what’s next.

Investors, and FIs looking to offer crypto services, need to read between the lines and view this crash as an educational opportunity.

Fintech is helping a growing number of banks and credit unions reconfigure the communities they serve.

Historically, financial institutions have focused on clients based on geography, be that a neighborhood or city for banks or a local company or industry for credit union membership. Over time, those boundaries became more fluid as banks entered new markets and credit unions expanded their fields of membership.