Bank Earnings Spotlight Transition From Branch Services to Back-Office Solutions

Perhaps one of the 21st century’s most defining business trends has been the trickledown effect of enterprise capabilities as technological innovations simplify back-office operations. 

Powerful financial tools, once only accessible to large corporations, are now being embedded in the tech stacks of small- to medium-sized businesses (SMBs) and startups, thanks to innovations in application programming interfaces (APIs), cloud infrastructure and bank-FinTech platforms. The convergence of these solutions is helping to overcome budgetary, technical or talent-based resource bottlenecks that historically held mid-market firms and their smaller peers back.

For financial institutions (FIs), this transformation is not only altering traditional client relationships, but also redefining where, when and how value is created in the financial services ecosystem. After all, banks aren’t just witnessing this shift — as the most recent quarterly earnings period shows, they are increasingly dedicated to helping to drive it.

From large lenders like Citi and JPMorgan, to systemically important banks like BNY and Lloyds, as well as major market institutions like Truist, bank executives all stressed to their respective investors the importance of back-office units. Against a backdrop of operational uncertainty, FinTech fragmentation and growing demand for streamlined, data-rich payments, these FIs’ treasury and trade solutions (TTS) and embedded finance platforms are becoming strategic growth engines. 

See also: 3 Ways Mid-Sized Treasurers Are Managing Liquidity Amid Uncertainty 

As software companies, retailers and even gig platforms can offer lending, payments and cash management solutions, banks face a critical question: What does it mean to be a financial institution when financial services are everywhere? The answer, increasingly, could be back-office infrastructure.

Done right, embedded finance shifts from a buzzword to a reliable infrastructure, Ingo Payments Chief Product Officer Lisa McFarland wrote in the latest PYMNTS eBook, “Halftime 2025: Charting the Future of Payments.”

For years, TTS and payments were a margin-stable, if somewhat unglamorous, part of the banking business that was focused on cash management, trade finance and transaction services for multinational corporations. But as uncertainty grows, these divisions have emerged as growth drivers.

Citi’s Services business, for example, posted record second-quarter 2025 revenues of $5.1 billion, up 8% year over year. Market share gains of 40 basis points in TTS were driven by a 7% rise in cross-border transaction value and higher deposit balances. BNY’s Treasury Services offerings were likewise up year-over-year.

“Treasury is no longer a static reporting function,” Albert Acevedo, head of banking and treasury services at Priority, told PYMNTS. “It’s embedded in the operational DNA of the business. Cash forecasting used to be a weekly or monthly activity. Now it’s daily, often intraday. You need to know precisely where your cash is, how it’s moving, and whether the funding source and payment type align in the moment.”

“Technology is leveling the playing field,” Acevedo added. “We’re bringing treasury sophistication down to smaller merchants, helping them optimize cash, manage returns risk and accelerate receivables.”

More here: GENIUS Act Makes Stablecoins Business-Ready

According to PYMNTS Intelligence data in the June 2025 “Payments Optimization Tracker® Series” report, “Platform Power: The Growing Importance of Embedded Finance to SMB Success,” a collaboration with Worldpay, 91% of SMBs said software capabilities will be key to their growth strategies in 2025.

Nearly two-thirds would switch providers to access embedded finance solutions. For banks, this underscores the opportunity within treasury and payments services.

At the same time, innovations like stablecoins are reshaping what treasury management and payments might look like in the future.

During Citi’s second-quarter 2025 earnings call on July 15, executives were asked during the Q&A session whether stablecoins “were a good opportunity” for Citigroup. CEO Jane Fraser jumped at the question, noting that, “the client can move cash on us, instantaneously, 24/7, cross-border. We absorb all the complexities such as the accounting, the AML.”

BNY’s CEO Robin Vince also highlighted his firm’s efforts to serve institutions’ growing interest in and adoption of digital assets.

But that’s not the only innovation in play. Artificial intelligence is also making waves. Lloyds Banking Group reportedly has rolled out a new generative AI-powered knowledge hub to reduce the time it takes employees to find information and respond to customer queries. The system, known as Athena, is the U.K. bank’s first major deployment of generative AI.

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