Banking

Financial giants in Japan partner with AI firms to build zero-trust cybersecurity defenses.

This article appears in the July/August issue of Global Finance Magazine.

Japan’s banking sector is becoming a high-stakes proving ground for AI-driven cybersecurity. 

As autonomous “frontier AI” models rapidly increase the speed and scale of cyberthreats by identifying zero-day vulnerabilities, the country’s financial giants are re-engineering their defensive paradigms.

So, it came as no surprise that, in June, Minister of Finance Satsuki Katayama announced that Mizuho, MUFG, and SMBC had secured eligibility to use cutting-edge AI tools, including those from Alphabet’s Google. 

“From a financial perspective, this issue concerns all companies and all economic actors,” Katayama says. “We therefore want to make sound choices in a way that serves the national interest.”

Alphabet also had an edge, according to Katayama, considering it already runs data centers in Japan.

Katayama’s announcement followed a critical breakthrough in which the government and major financial institutions secured access to AI company Anthropic’s highly guarded “Claude Mythos” model. Mythos possesses unprecedented capabilities to discover and remediate software configurations rapidly, but its dual-use nature means it could be weaponized by attackers to construct immediate exploit pathways. 

Anthropic’s rival, OpenAI, has similarly pledged future access to its latest frontier model, GPT-5.5-Cyber, to a select number of domestic banks.

This rapid influx of American technology underscores how Japanese banks aim to delicately balance the immense benefits of generative AI with its significant operational risks. 

The urgency stems from an unprecedented joint emergency directive issued on May 22 by the Japan Financial Services Agency (JFSA) and the Bank of Japan (BoJ). 

Spurred by international alarms, including warnings from the UK AI Security Institute and a Financial Stability Report from the Banco de España, regulators realized that human-dependent monitoring cannot keep pace with the velocity of AI-generated attacks.

The JFSA-BoJ directive also comes in the wake of “Project YATA-Shield,” a comprehensive, Japanese government-wide cyber defense package mobilized to foster “Advanced Threat Awareness.” 

With the JFSA urging banks to prioritize resources on a risk basis and shift toward continuous “zero-trust” authentication, Japan is demonstrating that resilience in the AI era is no longer measured by blocking every attack, but by the speed of detection, containment, and recovery.

John Amari is a contributing writer based in Japan.

Jim Ovia steps down as Zenith Bank chairman after 36 years, passing the torch to CEO Adaora Umeoji.

When Jim Ovia founded Zenith Bank in July 1990 at age 38, with NGN 20 million (then about $2.5 million) in capital, Nigeria already had a rich history of indigenous banking institutions. National Bank of Nigeria (1933), African Continental Bank (1937), and Agbonmagbe Bank (1945), later renamed Wema Bank, were among the major banks. 

In May, nearly 36 years after Zenith’s founding, Ovia retired as chairman after completing the maximum 12-year tenure permitted under the Central Bank of Nigeria’s (CBN) corporate governance code. Known as the godfather of Nigerian banking, Ovia leaves Zenith as Nigeria’s most valuable listed bank, with more than NGN 30 trillion (about $19.5 billion) in assets and NGN 1 trillion in after-tax profit in 2025.

Zenith was among the institutions that emerged stronger from Nigeria’s landmark 2004–05 banking consolidation, during which the CBN raised minimum capital requirements from NGN 2 billion to NGN 25 billion, reducing the number of the nation’s commercial banks from 89 to 25. 

Building an African Banking Empire

The lender has since expanded beyond Nigeria, with subsidiaries in Ghana, Sierra Leone, and Gambia; branches in London, Paris, and Dubai; a representative office in China; and a growing East African presence following the acquisition of Paramount Bank Kenya. Last year, Zenith became the first Nigerian lender to exceed NGN 5 trillion in market capitalization.

The leadership transition follows years of internal succession planning. Adaora Umeoji, who joined Zenith in 1998, became the bank’s first female group managing director and CEO in 2024, after a 28-year career at the institution. Under her leadership, Zenith completed an NGN 350.46 billion capital raise, 160% subscribed, comfortably exceeding Nigeria’s new regulatory capital requirements while maintaining record profitability.

Ovia strengthened his financial commitment before stepping down as chairman. In December, five months before retiring, he acquired an additional NGN 14.8 billion in Zenith Bank shares, increasing his holding to 16.2% and cementing his position as the bank’s largest individual shareholder.

Ovia’s leadership laid “the foundation for what has become one of Africa’s most respected and globally recognized financial institutions,” according to the Nigerian Education Loan Fund. Shareholder advocate Boniface Okezie, national coordinator of the Progressive Shareholders Association of Nigeria, terms Zenith “one of the strongest banks in the country because of the solid foundation [Ovia] laid,” and expresses confidence that the lender’s governance framework will remain strong without its founder.

Charles Wachira is a contributing writer based in Kenya.

The Bermuda bank agrees to buy a 91.7% stake in CIBC Caribbean Bank for $1.8 billion, creating a regional giant.

This article appears in the July/August issue of Global Finance Magazine.

Butterfield Group has agreed to acquire a 91.7% stake in CIBC Caribbean Bank Limited for $1.8 billion — $1.09 billion in cash and the remainder in shares — in a deal that would create one of the region’s largest banking groups.

This is at least the third time in the past seven years that the Canadian Imperial Bank of Commerce (CIBC) has attempted to sell some of its Caribbean interests.

“This deal combines two storied, complementary banks with significant local scale advantages and time-honored customer relationships in their respective core jurisdictions,” said Michael Collins, Butterfield’s chairman and chief executive, in a statement. 

The new banking group will hold an estimated $29 billion in assets. The Bermuda-based Butterfield Group—formerly The Bank of N.T. Butterfield & Son Limited—also operates in The Bahamas, the Cayman Islands, the Channel Islands, Singapore, Switzerland, and the U.K. CIBC has a presence in 10 countries and is based in Barbados.

CIBC will hold about 22% of the enlarged Butterfield Group and will have the right to appoint two directors to the board. 

The bank’s top brass says the deal underscores a shift in the Caribbean financial sector. 

“This is really a change in Butterfield’s positioning because it now picks up both a retail and a business portfolio that spans the entire gamut of the region, and it probably could make it the biggest bank in the region,” former Butterfield CEO Mariano Browne told the Trinidad and Tobago Guardian.

Butterfield has promised to maintain CIBC’s Barbados office. Customers should expect no immediate changes. Existing branches will remain open, and clients can expect improved cross-border payments and expanded consumer, digital, and merchant banking.

The deal, pending regulatory approval, should close in the first half of 2027.

In 2018, CIBC attempted to list FirstCaribbean on U.S. stock markets to raise up to $240 million but withdrew the application less than a month later after failing to drum up sufficient investor interest. A 2019 deal to sell 66.7% of CIBC to GNB Financial Group for $797 million fell through after the deal failed to secure regulatory approval.

Nic Wirtz is a contributing writer based in Guatemala.

Seventeen major institutions sign on to test around-the-clock liquidity and instant global value transfer.

Swift announced that its blockchain ledger is ready for initial use, enabling early adopter financial institutions to support cross-border payments around the clock using tokenized deposits.

The global cooperative, known for its vast messaging network used by banks to move money, called it a decisive step in scaling the benefits of digital value.

Cross-Border Velocity and Efficiency

So far, 17 banks from six continents are preparing to pilot live transactions on the ledger. They include ANZ, BNP Paribas, BNY, Citi, DBS, First Abu Dhabi Bank, FirstRand Bank Limited, HSBC, Itaú Unibanco, Lloyds Bank, Mashreq, MUFG Bank, OCBC, Standard Chartered, UBS, UOB and Wells Fargo. The shared ledger gives these participating banks a more secure layer for bank-issued tokenized deposits on their own ledgers, Swift argues.

Swift said banks stand to gain an improved client experience and greater global liquidity efficiency—even overnight and on weekends—without compromising existing compliance, credit, risk, and control standards.

It is the first use case for the ledger, which Swift announced last year and said it designed and built with feedback from international financial institutions in nine months. Swift said the development sets the stage for further innovation and interoperability on infrastructure, which it said is trusted to move the equivalent of world GDP every two to three days between more than 200 markets.

“With our new ledger capability, we’re extending the trust and stability of established finance into the frontiers of digital money. It allows tokenised value to move across borders with the velocity and flexibility modern commerce expects, while maintaining the same high levels of resiliency, security, and compliance global finance requires,” Thierry Chilosi, chief business officer at Swift, said in a prepared statement. “The strong support from banks shows the practical value of this approach — one that will help scale benefits globally while creating a foundation for future innovation in areas like programmable money and agentic commerce.”

Meeting G20 Targets

Following its initial go-live phase, Swift plans to expand the ledger’s functionality and availability. This builds on its existing infrastructure, where 75% of network payments already reach beneficiary banks within 10 minutes, or even seconds. The upgrades aim to help the industry meet Group of 20 international transaction targets.

Swift said it is also implementing a retail payments framework with its community aimed at ensuring upfront transparency on fees, full value delivery, and a faster, more consistent experience for consumers. Together with the ledger, Swift said, those upgrades lay the groundwork for value to move in any regulated form, anywhere, with high levels of security and resilience.

Anthony Noto covers corporate finance and private credit. Contact him at anoto@gfmag.com

Major US banks proved resilient under the Fed’s severe 2026 stress test scenario.

This year’s Federal Reserve Stress Test, which involved 32 U.S. banks, simulated a hypothetical real estate Armageddon in which commercial real estate prices fell 39%, housing prices declined 30%, unemployment spiked to 10%, and economic output dropped commensurately.

The results were encouraging.

Capital declined only 1.6 percentage points in aggregate, according to a Federal Reserve Board statement. All of the banks remained at their minimum common equity Tier 1 capital requirements despite having $708 billion in total hypothetical loan losses.

Of the projected losses, the Fed identified approximately $200 billion in credit card losses, $160 billion in commercial and industrial loan losses, and $75 billion in commercial real estate losses.

“Today’s results underscore the strength of the banking system,” Vice Chair for Supervision Michelle W. Bowman said in a prepared statement. “As we work to increase the transparency and accountability of the stress test, public feedback will help us continue to improve and instill greater confidence in the stress test and its results.”

Compared to last year’s stress test, this one saw a larger decline in aggregate capital due to higher loan losses stemming from increased loan balances and the greater severity of certain test variables, and lower projected unrealized gains in bank securities resulting from smaller hypothetical interest rate declines in the scenario.

The results, however, showed a projected increase in capital from higher interest income driven by recent bank financial performance, offset by the same hypothetical interest rate declines.

Regardless of their results, participating banks will not need to adjust their stress capital buffers since the Fed voted to maintain the current requirements until 2027.

Test Format Change

“This year marks the transition between the Federal Reserve’s existing stress test framework and an updated one that aims to enhance transparency, reduce volatility, and provide opportunities for public comment on the models and scenarios,” said Greg Baer, president and CEO of the Bank Policy Institute, in a statement. “We hope that the revised framework will shed more light on the inputs and provide more certainty. We have also recommended that the most recent Basel proposal be updated to eliminate overlaps with the stress test. These combined changes will allow banks to plan capital more efficiently and support more lending and capital markets financing.”

The Fed opened the 2026 test scenario for comments in October 2025 to improve transparency while avoiding litigation it faced in previous years over opacity and defects in the test itself.

“Capital requirements should not be set in a way that is shielded from meaningful public scrutiny,” the Fed’s Bowman said. “As vice chair for supervision, I am committed to providing transparency and accountability for both the Board and our supervised firms. This is essential for maintaining the value of our stress testing program, and for supervision and regulation more broadly.”

Contact the author at rdaly@gfmag.com

Banks are testing products on fake customers. It’s faster, cheaper, and ethically murky.

Financial institutions are quietly substituting real customers with algorithmic clones to bypass stringent data privacy laws and speed up time-to-market. 

Testing a new credit card or AI investment app traditionally takes months of vetting. For bank product developers, the synthetic consumer, who never sleeps or complains to regulators, and costs fractions of a penny to interview, represents a faster, highly attractive alternative, prompting adoption across the industry.

U.S. Bank deploys synthetic audiences to model consumer segments, such as high-net-worth households, and test messaging and refine campaigns before launch. Regulatory sandboxes encourage this practice to keep pace with AI-driven fintech. Barclays, Lloyds Banking Group, and UBS are part of the UK FCA’s AI Live Testing initiative, utilizing advanced AI systems to test products and simulate market stressors.

NatWest, Monzo, and Santander, meanwhile, explore synthetic data ecosystems to train AI models, while JPMorgan Chase generates synthetic financial data to simulate market behaviors for risk management and product design.

Adoption Accelerates, Zero Governance

Industry experts warn that the true challenge is balancing the speed of agentic AI with the need for strong governance.

“Most banking leaders believe agentic AI can move faster if governance weren’t perceived as a constraint. But in practice, governance is what makes these systems deployable at scale. A critical part of that is robust testing against representative ground truth, and synthetic data provides a powerful proxy that enables banks to stress-test products against rare scenarios and edge cases,” said Mudit Gupta, EY Americas Financial Services Consulting AI Practice Leader.

“The trade-off,” he added, “is privacy: synthetic data is often treated as inherently safe when it can still leak sensitive signals through inference and linkage risks. It can also replicate and scale historical biases, embedding them behind a layer of abstraction that makes them harder to detect, audit, and challenge—turning a governance shortcut into a long-term ethical exposure.”

Ultimately, the rush to deploy synthetic consumers offers undeniable speed, but the industry must quickly confront whether these powerful proxies—if not rigorously governed—will fulfill their purpose as a testing shortcut or simply institutionalize Wall Street’s next major ethical crisis.

This article appears in the June 2026 issue of Global Finance Magazine.

A veteran dealmaker takes the helm as large-cap M&A shows signs of a selective recovery.

JPMorgan Chase, the global leader in investment banking revenue, has named Anu Aiyengar global chair of Investment Banking and M&A, signaling a renewed emphasis on dealmaking as a pillar of its investment banking strategy.

As part of a broader divisional shift, the bank also named Dorothee Blessing, Kevin Foley, and Jared Kaye as co-heads of Global Investment Banking, while Charles Bouckaert succeeds Aiyengar as global head of M&A.

The changes come as deal activity shows signs of recovery after nearly two years of sluggish momentum. Dealogic estimates that global deal announcements reached nearly $2 trillion by May 11. That’s a 33% increase from the same period last year.

Still, observers note that the current cycle is far from a repeat of the free-flowing deal market of 2021. Higher financing costs have made boards more disciplined about price and timing, while closer regulatory scrutiny from antitrust watchdogs in both the U.S. and Europe has raised the financial and reputational cost of getting large transactions wrong.

A Selective, Large-Cap Rally

“This has not been a full-spectrum, feel-good rally. It has been a highly selective one, skewed toward strategic, large-cap deals,” said Marc Cooper, CEO of Solomon Partners. “Deals valued at $5 billion and up accounted for more than half of all volumes. That distinction matters.”

Against this backdrop, Aiyengar’s appointment suggests JPMorgan sees senior dealmaking expertise as a defining advantage in the current market. The firm expects the dealmaking veteran to work closely with senior clients as boards decide whether to move forward with transactions or wait for better conditions.

Since joining JPMorgan in 1999, Aiyengar has advised on more than $1 trillion in transactions. She became sole head of the bank’s global M&A franchise in 2023, making her the only woman leading M&A at a major Wall Street house at the time.

Her move also carries symbolic weight in an industry where senior dealmaking roles remain dominated by men. In 2025, Business Insider named her the top U.S. M&A banker on its Rainmakers list, making her the first woman to hold the No. 1 position.

This article appears in the June 2026 issue of Global Finance Magazine.

Labs are rethinking banking, as AI remains king, but human insight directs banking improvements.

So, the robot banker remains a long way off. But S&P Global estimates that up to 59% of financial institutions worldwide were actively using artificial intelligence in 2025. Beyond simply relying on technology for research (“Summarize new anti-money laundering mandates for me”), financial institutions have begun operationalizing AI processes.

This is a significant advancement. Instead of using AI like an intelligent chatbot, banks now direct systems to perform complex, multi-step tasks—saving untold human hours while both speeding up and improving operations.

How does this newer type of AI (called “agentic AI”) work?

Consider loan processing as an example. Someone applies for a loan. AI agents retrieve credit reports, verify income, calculate debt-to-income ratios, apply underwriting rules, approve or reject applications (or forward them to a human underwriter for approval), and generate documentation. In compliance monitoring, agents can read regulatory texts, map new mandates to internal policies and processes, identify where the financial institution (FI) falls short, generate remediation tasks, and track progress.

For proof of the increased operationalization of AI, look at some of the innovations germinated in the world’s best fintech labs, incubators, and accelerators.

At inovabra, a lab hosted by Banco Bradesco, innovators have developed an AI product that can generate initial drafts of legal pleadings. The Bank of Georgia’s AI Research Lab has launched Software Developer: Powered by Code2Doc.

This software can write other software. And Garanti BBVA Partners has nurtured Skymod, an AI-orchestration platform that enables financial institutions to securely delegate operational workflows to intelligent AI agents.

Knowing When AI Isn’t The Answer

Then there’s TD Lab. TD Lab is now experimenting with Physical AI, or AI-embedded machines (think robots, drones, and smart devices) capable of interacting with the physical world.

“Physical AI is about convergence,” said Chris Halabecki, senior manager and lab leader. “It’s about combining AI with objects that can sense or maneuver through the real world. As a lab team, we’re exploring how we can use physical AI to integrate more intelligence into everyday scenarios to better serve our colleagues and clients today and in the future.”

The lab has already developed proprietary software for a quadruped (robotic dog) device. Using LiDAR (Light Detection and Ranging), which is a sensing technology that uses pulsed laser light to measure distances, and AI together, the quadruped can detect and learn about objects in the surrounding area, then follow commands linked to those objects. Halabecki provided examples such as “Walk to the white couch” and “Go find Evan.”

Future use cases for these technologies may include robots that can count, sort, and verify cash.

One day, robotic relationship managers may recognize when a customer walks into a branch and guide them in making investment decisions. In the field, physical AI may be able to conduct home appraisals and complete other tasks.

With the much-ballyhooed capabilities of artificial intelligence, it’s a little surprising to hear Kadry Boutaina, chief of innovation for the digital transformation lab of Morocco’s Attijariwafa bank, say, “Sometimes, the answer is not AI.”

That doesn’t mean the lab, called Wenov, isn’t driving technological advancements. It works with external startups to offer “more and more digital services for our customers — both retail and business.” Boutaina notes that Attijariwafa faces significant competition in this field, from both established banks and newcomers — notably neobanks entering the Moroccan and broader West African markets.

But providing digital services does not always entail a wholesale AI revolution.

When Banks Let Employees Innovate

The Moroccan Ministry of Economy and Finance recently formalized laws governing crowdfunding in the country. The first regulated platform of this kind is being provided by Kiwi Collecte, a fintech company. Under Moroccan law, Kiwi Collecte may not directly hold or move funds. It must partner with a licensed Moroccan bank for those tasks. A partnership with Attijariwafa empowers the bank to hold and safeguard funds, process payments, and disburse money to beneficiaries.

Fraud prevention is ever important. Sandbox CAIXA has found an old-school way to fight it. Sandbox CAIXA is the innovation lab of Caixa Econômica Federal, a major state-owned bank in Brazil. Lucas Zaccaro, Sandbox CAIXA manager, said that in his country, technologically unsophisticated people are often victimized by scammers. When the bank is closed, thieves stand near ATMs. They then offer to help patrons who are unsure how to use the machines. These criminals “help” by tricking users into revealing their PINs, then stealing their cards.

A “really great idea” from a rank-and-file Caixa employee led the bank to broadcast recorded messages at 10 of these ATMs, warning patrons about the scam. Theft at those banks has stopped.

Zaccaro says that this fraud-prevention idea was submitted through an established process designed to encourage rank-and-file employees to submit innovative ideas. Employees use Microsoft Copilot to refine their concepts and submit them to Sandbox CAIXA for review and potential testing. The lab will now assess the feasibility of rolling out its scam warning across the ATM network—potentially using cameras to detect when people are at the ATM and triggering automated messages.

At the Banking and Financial Institutions Association of Colombia (Asobancaria), the focus is less on rapidly advancing technologies and more on meeting existing societal needs. One development from the Asobancaria Social Innovation Lab is a reference framework for identifying, classifying, and reporting on the banking sector’s social portfolios. This proposal—the second of its kind in Latin America after Guatemala’s Social Taxonomy—was developed through multiple sessions of analysis, technical feedback, and sector-wide validation with member institutions. To create this framework, Asobancaria worked closely with the Global Green Growth Institute (GGGI), which develops social-portfolio standards aligned with the United Nations Sustainable Development Goals.

Andrea Guzmán, GGGI’s sustainable finance officer, said the problem with sustainability reporting among Asobancaria member banks was a lack of alignment on standards, with each bank setting its own measures of success for its social portfolios.

The framework addresses issues such as financial inclusion, social infrastructure, affordable housing, and services for small and medium-size businesses. A single framework to which all member banks agree “improves transparency,” Guzmán says. “It supports better decision-making by investors and helps mobilize more resources for our social sector. It’s a framework we can base bonds on. It’s a framework that helps banks avoid accusations of greenwashing.”

Consider the framework for sustainable and affordable housing. Guzmán notes that in rural Columbia, many houses lack access to water and may have only dirt floors. Therefore, a bank could claim success in affordable housing if it funded units with wood floors, fully plumbed and connected to the electrical grid. But what if those apartments are so far from public transportation that no one can get to work or school? Guzmán said that under the framework, banks agree that any affordable housing projects they fund would have access to the nation’s external infrastructure and social services.

Here’s a closer look at some of the world’s best fintech labs and the innovations they’re nurturing.