In today’s top news in digital-first banking, banks expect having higher expenses and lower revenue, while U.S. Treasury Secretary Janet L. Yellen is convening financial markets advisers and watchdogs to talk about stablecoins. Plus, Enterprise Financial Services Corp. announced that its acquisition of First Choice Bank has received all necessary regulatory approvals.
Banks foresee having increased costs and decreased revenue amid an ongoing slowdown in lending as they rush to fend off financial technology competitors and stay ahead of technology. Analysts had expected lower costs now that the world has reopened for the most part after the pandemic and were not expecting the rise in costs that institutions reported on calls. Banks reduced expenses during the pandemic, while a boost from stimulus funds provided certain financial institutions (FIs) with a cash reserve.
U.S. Treasury Secretary Janet L. Yellen is bringing leading financial markets advisers and watchdogs to talk about the potential — advantages and disadvantages — of stablecoins. The gathering of the President’s Working Group on Financial Markets was set for July 19. That group includes representatives of the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. Stablecoins are digital currencies linked with real-world assets whose prices tend not to be as volatile as cryptocurrency.
Enterprise Financial Services Corp., Enterprise Bank & Trust’s parent, revealed that its purchase of First Choice Bank has regulatory go-ahead and is now in the hands of investors in both institutions. The deal will wrap up in the third quarter of 2021, pending approval from shareholders. The nearly $400 million deal was revealed back in April. Enterprise President and Chief Executive Jim Lally said in an announcement at the time that “the acquisition of First Choice strengthens our commercial banking foundation in the largest economy in the country.”