#financial-infrastructure

#financial-infrastructure

In early 2021, an army of retail traders made massive bets on meme stocks and briefly melted down the market. Trading volume swelled to such a huge extent that popular brokerage Robinhood had to halt buy orders for stocks like GameStop for a few days in order to escape a liquidity crisis. At the time, the situation led to claims of a conspiracy, but the reason for the meltdown was more mundane: Wall Street's creaky infrastructure could not settle trades fast enough.

In the span of just over a year, Citizens has redesigned its open banking API, reimagined student banking, and launched a modular commercial credit card for the middle market. Each move targets a different segment - firms and their developers, students, and midsize firms - but the pattern is hard to miss: Citizens is learning to behave less like a traditional bank and more like a financial infrastructure company.

Swiss company Anapaya is collaborating with NL-ix to make SCION connectivity available via the exchange environment of the Dutch internet hub. In Switzerland, this form of connectivity has already been adopted by the Swiss National Bank and SIX. The system supports the Interbank Clearing System of more than 300 banks. A network for handling financial transactions, where security is of paramount importance.

The companies that spent the last decade promising to disrupt banks are now building their foundational systems. Coinbase, once the crypto outsider pitching digital assets as banking's alternative, is powering J.P. Morgan's deposit token experiments. SoFi is routing remittances through Bitcoin's Lightning Network while acting as a regulated bank holding company. Even pure-play digital banks like Chime have shifted focus from pure customer acquisition to deepening existing relationships through credit products and early-pay services.

The transformation from banks as destinations to banks as infrastructure is reshaping the financial landscape as banks embed themselves into existing platforms, providing seamless financial services.