The Future Of Banking’s Post

CIBIL Score Reforms 2025 in the Banking Sector 1️⃣ Credit scores will now be updated bi-monthly, specifically on the 15th and the final day of month. 2️⃣ Banks and NBFCs must notify customers when checking their credit reports, using SMS or email. 3️⃣ In line with the new rule, banks and NBFCs must give reasons for rejecting end-user requests. 4️⃣ Credit agencies are mandated to provide free, detailed credit reports annually to consumers. 5️⃣ Credit companies must inform customers before reporting defaults, ensuring transparency via SMS or email. 6️⃣ All complaints should be resolved within 30 days, with penalties for exceeding the turnaround time. If the problem is not redressed within this timeframe, the business shall be penalised ₹100 a day until the matter is resolved. The credit bureau may even have to compensate the customer for the nine-day wait after the bank adjustments. Thanks for reading…..

Dear LinkedIn colleagues, I would like to share an observation from my recent experience. I have noticed a number of critical issues related to deceased customers’ accounts. In some cases, ATM cards and cheques were misused to withdraw funds even after the account holder’s death. In such situations, it becomes extremely difficult to determine who is truly responsible for these transactions. Despite operating in a technologically advanced environment, we still face significant challenges in addressing this matter. If NADRA were to share information about deceased persons with banks and EMIs in a timely and authenticated manner, financial institutions could promptly mark such accounts as “deceased.” This would help prevent a large number of these issues. I understand there may still be procedural gaps, but such coordination could cover many critical areas—especially as EMIs and branchless banking continue to grow rapidly. Currently, there appears to be no effective mechanism for identifying and managing deceased accounts within EMIs. For instance, if an EMI user with a balance of PKR 800,000 passes away, how can that account be accurately marked as deceased when there is no physical branch for verification? If NADRA were to periodically share updated data with financial institutions, it would greatly enhance the integrity and control of the overall banking system.

Accepting deposits related to stablecoins issued has its (LCR) consequences. According to the below paper by the ECB (section 2.3.1): "The following section provides detailed mechanics on how and to what extent issuing a stablecoin or onboarding deposits from stablecoin issuers affects a bank’s LCR based on the three possible outflow rates, representing: 1️⃣ a bank issuing a stablecoin for retail clients where it can identify the ultimate retail client and assigns an outflow rate of 10%, corresponding to the outflow rate of retail liabilities; 2️⃣ a bank onboarding a stablecoin issuer and assigning an outflow rate of 25%, corresponding to a client’s operational deposit generated by clearing, custody and cash management activities; 3️⃣ a bank issuing a stablecoin and being unable to identify the ultimate client or onboarding a non-bank stablecoin issuer and assigning an outflow rate of 100%, both corresponding to the outflow rate of unsecured wholesale funding provided by other legal entity customers." Be vigilant: there are some footnotes to the above-quoted piece. BTW, for comparison: Deposit Type / Typical LCR Run-off Rate (%): 👉 Insured Retail Deposits / ~5% 👉 Uninsured Retail Deposits / ~10-20% 👉 Insured SME (NFC) Deposits / ~20% 👉 Uninsured SME (NFC) Deposits / ~40% 👉 Financial Institutions' Operational Deposits / 25-75% (varies by insurance and operational use) https://lnkd.in/dbdW2WNr

Interest rate risk in the banking book (IRRBB): A closed-form solution for non-maturity deposits (NMDs) A very interesting paper from Andreas Blöchlinger develops a closed-form valuation model tailored to fixed‑income instruments in imperfectly competitive markets, with a particular focus on banking book products that embed options — such as non-maturity deposits (NMDs). It is designed for practical use in funds transfer pricing (FTP) and interest rate risk in the banking book (IRRBB) to help stabilize a bank’s profit margins. Model structure: The framework is built from three components: 1. A discrete‑time dynamic term structure model of interest rates in an affine 2. Q-measure setting. A model of the bank’s optimal pricing behavior. 3. A model of customer withdrawal behavior conditioned on the bank’s pricing. Use cases: By linking market rates, bank pricing, and depositor behavior in a tractable way, the model enables closed-form valuation and supports FTP and IRRBB management for instruments with embedded options, such as NMDs. Key conclusion: Over the long run, Gaussian term structure models provide a workable approximation within this framework, making the approach both analytically convenient and operationally usable. Andreas Blöchlinger, Interest rate risk in the banking book: A closed-form solution for non maturity deposits, Journal of Banking & Finance, Volume 125, 2021, 106080, ISSN 0378-4266, https://lnkd.in/dDWs4hWb. Paper available at: https://lnkd.in/dwHPMN_B #pwc #risk #economics #finance #banking #deposit #IRRBB #BIS #BCBS

Here is an interesting article/study on the psychology and use of credit. It also highlights some differences of BNPL being offered by 3rd party fintechs or by Credit Unions & Banks. https://lnkd.in/d6xDCmfX

The U.S. banking system is increasingly characterized by having fewer, and bigger, lenders. In 2005, there were nearly 9,000 banks insured by the Federal Deposit Insurance Corp. Now, there are fewer than 5,000. And just three banks represented about 30% of all U.S. domestic deposits at midyear, according to FDIC data: JPMorgan Chase, Bank of America and Wells Fargo. Yet a recent string of deals among regional and midsize banks reveal a drive not just for greater scale, but also the ability to build strongholds in specific, local markets. This will prove key in building defenses against banking giants in what remains the core of banking: reliable deposits.

One of the biggest business moves these days by wealth managers attached to large banks is to make sure you’re offering clients all the banking products they can possibly handle. Switzerland-based UBS, though, still finds that many of its U.S. customers are going to its industry rivals for opening banking accounts, holding money on deposit and similar services. The firm’s answer: Obtain a national banking charter.

Proud to release this case study — by positioning Experian Optimize within Garanti BBVA’s origination strategy, we successfully reduced NPLs while maintaining strong approval performance, proving that growth and risk control can go hand in hand. 🤩🤝 Curious about how we achieved it? Full details are available via the link below.👇 https://lnkd.in/dDVHuyRd

The banking industry remained profitable for the first eight months of 2025, recording a growth of 46.1% to GH¢9.7 billion profit-after-tax. This is relative to GH¢6.7 billion recorded during the same period in 2024. According to the September 2025 Monetary Policy Report, the banking sector posted a growth in all income lines in August 2025, with other income growing at 47.3% compared to a contraction of 2.9% for the same period last year. https://lnkd.in/dsKvXT9X

The banking industry remained profitable for the first eight months of 2025, recording a growth of 46.1% to GH¢9.7 billion profit-after-tax. This is relative to GH¢6.7 billion recorded during the same period in 2024. According to the September 2025 Monetary Policy Report, the banking sector posted a growth in all income lines in August 2025, with other income growing at 47.3% compared to a contraction of 2.9% for the same period last year. https://lnkd.in/dsKvXT9X