# Flagstar Bank: AI strategy

Source: https://www.bankingnewsai.com/banks/flagstar
Last updated: Oct 13, 2026

*Two years after nearly failing, the former New York Community Bank has trademarked its technology platform and patented a multi-model AI orchestration system — and wants the option to sell both.*

## How is Flagstar using AI?

Flagstar Bank, the former New York Community Bancorp, has turned a survival story into one of the most specific enterprise-AI disclosures among US regionals. After a near-collapse in early 2024, a $1.05 billion capital injection led by Joseph Otting and Steven Mnuchin, eight straight quarterly losses and $600 million of cost cuts, the bank returned to profit in the fourth quarter of 2025. In parallel, chief information and operations officer Chris Higgins, hired in late 2024, consolidated three acquired technology stacks and six data centres in about a year, a job he says would normally take two to three. The result is the Flagstar S2 Platform, launched in June 2026 and now the subject of a trademark application, and StarIQ, a patent-pending generative-AI orchestration system deployed in early 2026 that runs Claude, Llama, Mistral and Amazon Titan on AWS, screens prompts through Palo Alto Networks AI firewalls, answers document and policy questions through a RAG pipeline with citations, and routes every use case through an auditable approval chain. Higgins says protecting the intellectual property is about 'optionality', declining to rule out licensing the platform to smaller banks. The next phase is a two-migration move to Fiserv's cloud-native Finxact core in summer 2027 and 2028, chosen from twelve candidates, with $40–45 million of annual savings expected from core consolidation, and five senior technology hires from JPMorgan, U.S. Bank, MUFG and Mastercard under CTO Jason Pope to build a real-time 'Customer 360' and AI-driven proactive insights for private-banking clients. Otting's tenure was extended in May 2026 with a succession race under way; CFO Lee Smith, named co-president and co-chief operating officer, now also oversees information technology and operations. Speaking in July 2026, Higgins said StarIQ is one of 12 components of S2, is trained on compliance, regulation and branch and call-centre procedures so bankers and agents get faster answers, and that its heaviest users are risk management and marketing rather than technologists; he chairs an AI strategy committee that the CEO attends and expects customers to notice the AI in six to nine months. The bank's 2025 10-K, by contrast, contains no AI risk factor.

## At a glance

| Field | Value |
| --- | --- |
| Lead bank | Flagstar Bank, N.A. |
| Ticker | FLG |
| Headquarters | Hicksville, NY |
| Consolidated assets | $87,129 million |
| Federal Reserve rank | 33 |
| Charter | National bank (OCC); holding company dissolved in October 2025 |

## What AI partnerships and patents does Flagstar Bank have?

Flagstar names its AI stack unusually precisely: Anthropic Claude, Meta Llama, Mistral and Amazon Titan models on Amazon Web Services, protected by Palo Alto Networks Prisma AI firewalls. Cognizant, Mphasis and Fiserv build and run the wider S2 platform. Its intellectual property is a provisional patent application for StarIQ, unpublished, and a trademark application for S2. No granted or published AI patent exists under Flagstar, Flagstar Financial or New York Community entities; the one granted patent found dates from 2012 and is expired. ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx), [American Banker](https://www.americanbanker.com/leaders/the-ai-enabled-bank-reimagining-retail-banking-from-branch-to-mobile), [Cognizant (PR Newswire)](https://www.prnewswire.com/news-releases/cognizant-and-flagstar-bank-na-mark-one-year-partnership-advancing-flagstars-transformation-enhancing-client-experience-and-driving-efficiency-302674135.html), [PR Newswire via FT Markets](https://markets.ft.com/data/announce/detail?dockey=600-202603301417PR_NEWS_USPRX____NY22478-1), [Fiserv (GlobeNewswire)](https://globenewswire.com/news-release/2026/08/17/3346102/0/en/fiserv-and-flagstar-bank-announce-strategic-core-banking-relationship.html), [Google Patents (USPTO)](https://patents.google.com/patent/US8239255B2/en))

| Item | What it is | Status | Date | Sources |
| --- | --- | --- | --- | --- |
| Anthropic, Meta, Mistral, Amazon | Claude, Llama, Mistral and Titan foundation models orchestrated inside StarIQ | In production | 2026-06-15 | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx) |
| Amazon Web Services | Cloud host for StarIQ, which runs in an AWS tenant under consumption-based pricing | In production | 2026-07-30 | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx), [American Banker](https://www.americanbanker.com/leaders/the-ai-enabled-bank-reimagining-retail-banking-from-branch-to-mobile) |
| Palo Alto Networks | Prisma AI firewalls for prompt-injection, sensitive-data and policy-violation detection | In production | 2026-06-15 | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx) |
| Cognizant | Strategic partner acting as an extension of the technology team; co-branded centres in Hyderabad and Manila; AI Center of Excellence in India to be explored | In production; AI centre announced as a plan | 2026-01-29 | [Cognizant (PR Newswire)](https://www.prnewswire.com/news-releases/cognizant-and-flagstar-bank-na-mark-one-year-partnership-advancing-flagstars-transformation-enhancing-client-experience-and-driving-efficiency-302674135.html) |
| Mphasis | Consolidated six data centres into two and migrated hundreds of applications; next phase to use AI; one of eight S2 vendors | First phase complete | 2026-03-30 | [PR Newswire via FT Markets](https://markets.ft.com/data/announce/detail?dockey=600-202603301417PR_NEWS_USPRX____NY22478-1), [American Banker](https://www.americanbanker.com/news/how-flagstar-bank-integrated-its-acquired-data-centers) |
| Fiserv (Finxact) | Cloud-native core selected from 12 candidates; migrations summer 2027 and 2028 | Announced | 2026-08-17 | [Fiserv (GlobeNewswire)](https://globenewswire.com/news-release/2026/08/17/3346102/0/en/fiserv-and-flagstar-bank-announce-strategic-core-banking-relationship.html), [Banking Dive](https://www.bankingdive.com/news/flagstar-bank-fiserv-finxact-cloud-native-core-tech-modernization/828477/) |
| Equinix | Colocation space in Ashburn, Virginia and the Chicago area for the two new data centres | In production | 2026-06-30 | [American Banker](https://www.americanbanker.com/news/how-flagstar-bank-integrated-its-acquired-data-centers) |
| Figure Technology Solutions | Equity investment (blockchain-based lender); whole stake sold for $46 million | Exited | 2026-06-30 | [Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000068/fbc-20260630.htm) |
| StarIQ patent application | 'Techniques for Secure Enterprise Generative Artificial Intelligence Orchestration'; provisional, not yet published | Provisional application filed | 2026-06-15 | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx), [Banking Dive](https://www.bankingdive.com/news/flagstar-cio-chris-higgins-s2-stariq-proprietary-tech-platform-ai/823404/) |
| S2 Platform trademark | Trademark application for 'Simple and Sophisticated' platform name | Application filed | 2026-06-15 | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx), [Banking Dive](https://www.bankingdive.com/news/flagstar-cio-chris-higgins-s2-stariq-proprietary-tech-platform-ai/823404/) |
| US 8,239,255 B2 | Consumer incentive system and business method (New York Community Bancorp; not AI; expired) | Granted, expired | 2012-08-07 | [Google Patents (USPTO)](https://patents.google.com/patent/US8239255B2/en) |

## Flagship platform: Flagstar S2 Platform and StarIQ

S2 ('Simple and Sophisticated') is the enterprise platform that replaced three legacy environments (Flagstar, New York Community Bank and Signature Bank), six data centres and separate stacks with one foundation; the bank applied to trademark it in June 2026. StarIQ, deployed in early 2026 as a component of S2, is a patent-pending enterprise generative-AI orchestration system: multiple foundation models (Anthropic Claude, Meta Llama, Mistral, Amazon Titan) on Amazon Web Services under consumption-based pricing, an AI-aware security layer using Palo Alto Networks Prisma AI firewalls for prompt-injection and sensitive-data detection, a retrieval-augmented generation pipeline with citation tracking and access-controlled knowledge bases, and a governance workflow that takes each use case from business case through compliance review and multi-level approvals in one auditable system. ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx), [Banking Dive](https://www.bankingdive.com/news/flagstar-cio-chris-higgins-s2-stariq-proprietary-tech-platform-ai/823404/), [American Banker](https://www.americanbanker.com/news/how-flagstar-bank-integrated-its-acquired-data-centers))

## Key points

- StarIQ (early 2026): patent-pending multi-model gen-AI orchestration — Claude, Llama, Mistral and Titan on AWS, Palo Alto Prisma AI firewalls, a cited RAG pipeline and a single auditable governance workflow from business case to approval.
- S2 Platform (June 2026): three legacy banks, six data centres and disparate stacks consolidated into one foundation in about a year; trademark applied for; the CIOO wants 'optionality' including possible licensing.
- Core next: Fiserv's Finxact chosen from 12 candidates (August 2026) for migrations in summer 2027 and 2028; $40–45 million of annual savings from core consolidation.
- People: five senior technology leaders hired in March 2026 from JPMorgan, U.S. Bank, MUFG and Mastercard under CTO Jason Pope; the architecture targets a real-time Customer 360 and AI-driven proactive insights.
- Context: a near-failure in 2024, $1.05 billion of new capital, $600 million of cost cuts, 60 branch closures and a return to profit in Q4 2025; the holding company was dissolved in October 2025.
- Governance: StarIQ was 'built specifically for regulated financial services environments'; a former Comptroller of the Currency runs the bank.
- Inside StarIQ (July 2026): trained on compliance, regulation and branch and call-centre procedures for tellers, bankers and agents; three model tiers so simple questions don't use the most expensive model; heaviest users are risk management and marketing; an AI strategy committee chaired by the CIOO with the CEO attending.
- Disclosure gap: the 2025 10-K has no AI risk factor (its technology-change risk names stablecoins), and AI has not come up in the reviewed transcripts of the last four earnings calls, where management discusses the data-centre and core consolidation instead.
- AI leadership: Robert Martin, SVP, Distinguished Engineer and Head of AI and Engineering, joined in March 2026 from MUFG, where he set up AI risk governance frameworks; no chief AI officer or chief data officer is named in the proxy or releases reviewed, and AI reports through CIOO Chris Higgins and CTO Jason Pope.
- SEC language: the April 2026 proxy says 'internal AI and automation capabilities progressed, with the enterprise platform scheduled for launch in early 2026'; the first-quarter and second-quarter 2026 10-Qs contain no AI language at all.
- Spend: software expense was $96 million in the first half of 2026 against $80 million a year earlier (up 20%), while total operating expense fell 10% to $868 million; the 10-Q credits 'ongoing infrastructure development and system enhancements'.
- Vendor map: AWS, Anthropic, Meta, Mistral and Palo Alto Networks sit inside StarIQ; Cognizant, Mphasis and Fiserv build and run the platform; Higgins says S2 uses eight outside companies. Cognizant and Mphasis have both said AI is their next phase with the bank.
- Intellectual property: StarIQ is a provisional application and S2 a trademark application; no granted or published AI patent appears under any Flagstar or New York Community entity, and the one granted patent found, a 2012 consumer-incentive patent, is expired.
- Oversight: the proxy places technology risk with the board Risk Committee and a Technology and Operations Committee, with the CIOO and CISO jointly leading the cyber programme; George Buchanan, chief risk officer since March 2024, reports to the Risk Assessment Committee.

## Timeline

- Oct 9, 2026 — **Third-quarter 2026 results set for 23 October** The 8:00 a.m. ET call will be led by Otting, Smith and Raffetto; the earnings release and presentation post to ir.flagstar.com. ([Flagstar Bank (PR Newswire)](https://prnewswire.com/news-releases/flagstar-bank-na-to-report-third-quarter-2026-earnings-and-host-conference-call-on-october-23rd-302902712.html))
- Aug 21, 2026 — **Pope ties the real-time core to fraud and AI** CTO Jason Pope said a real-time system of record improves fraud decisions and AI capabilities and gives near-real-time liquidity and risk reporting; Higgins said the effort is 'a business transformation' rather than a technology one. ([Banking Dive](https://www.bankingdive.com/news/flagstar-bank-fiserv-finxact-cloud-native-core-tech-modernization/828477/))
- Aug 17, 2026 — **Fiserv announces Finxact as the bank's core** Fiserv's release calls Finxact the system of record and transaction engine of S2, with phased conversions; the platform processes in real time and removes end-of-day batch reconciliation. ([Fiserv (GlobeNewswire)](https://globenewswire.com/news-release/2026/08/17/3346102/0/en/fiserv-and-flagstar-bank-announce-strategic-core-banking-relationship.html))
- Aug 17, 2026 — **Fiserv's Finxact chosen as the single core** Two migrations, summer 2027 and 2028; $40–45 million of annual savings expected. ([Banking Dive](https://www.bankingdive.com/news/flagstar-bank-fiserv-finxact-cloud-native-core-tech-modernization/828477/))
- Aug 6, 2026 — **Q2 2026 10-Q: software expense $49 million; Figure stake sold; still no AI language** Software expense rose to $49 million for the quarter and $96 million for the half, attributed to infrastructure development and system enhancements. The bank sold its whole stake in Figure Technology Solutions for $46 million. The filing does not mention artificial intelligence. ([Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000068/fbc-20260630.htm))
- Jul 30, 2026 — **Inside StarIQ: who uses it and how it is governed** Higgins on American Banker's Leaders: one of 12 S2 components, trained on compliance and branch and call-centre procedures, three model tiers to control cost, runs in an AWS tenant, built for auditability; heaviest users are risk management and marketing; customers should notice in six to nine months. ([American Banker](https://www.americanbanker.com/leaders/the-ai-enabled-bank-reimagining-retail-banking-from-branch-to-mobile))
- Jul 24, 2026 — **Q2 2026 call: technology funded from cost cuts, no AI discussion** Smith said the bank keeps investing in technology while still bringing costs down; operating expenses were $427 million, C&I loan production hit a record, and a $250 million buyback was announced. The transcript text reviewed contains no reference to AI. ([Investing.com](https://investing.com/news/transcripts/earnings-call-transcript-flagstar-bank-misses-q2-2026-estimates-as-shares-fall-93CH-4811998))
- Jul 24, 2026 — **Turnaround shows progress, with bumps** Second-quarter results: a mixed quarter as CRE payoffs run high. ([American Banker](https://www.americanbanker.com/news/flagstars-turnaround-shows-progress-but-also-hits-bumps))
- Jun 30, 2026 — **Two new data centres run as peers; eight outside firms on S2** Higgins told American Banker the Ashburn, Virginia and Chicago-area sites, leased from Equinix, can each carry the full load, with workload moved in under 60 minutes against about eight hours for the old primary-to-secondary move and validation; Mphasis is one of eight companies working on S2. ([American Banker](https://www.americanbanker.com/news/how-flagstar-bank-integrated-its-acquired-data-centers))
- Jun 30, 2026 — **Six data centres consolidated in a year** How three acquired stacks became one; S2 officially launched in June. ([American Banker](https://www.americanbanker.com/news/how-flagstar-bank-integrated-its-acquired-data-centers))
- Jun 22, 2026 — **'Optionality' — including possible licensing** The CIOO on why the IP matters and what it could become. ([Banking Dive](https://www.bankingdive.com/news/flagstar-cio-chris-higgins-s2-stariq-proprietary-tech-platform-ai/823404/))
- Jun 15, 2026 — **S2 trademark filed; StarIQ patent application** The bank establishes proprietary rights over its platform and its gen-AI orchestration system. ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx), [PR Newswire via FT Markets](https://markets.ft.com/data/announce/detail?dockey=600-202606150830PR_NEWS_USPRX____NY82888-1))
- May 20, 2026 — **Otting's tenure extended; succession race set up** Co-presidents named as candidates. ([Banking Dive](https://www.bankingdive.com/news/flagstar-otting-extend-compensation-succession-raffetto-smith-co-president-nguyen-sullivan-menefee/820741/))
- May 18, 2026 — **Co-presidents named; CFO takes over technology oversight** Lee Smith and Richard Raffetto become co-presidents and co-COOs; Smith adds human resources, information technology and operations. ([Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000053/flg-leadershipsuccession.htm))
- May 7, 2026 — **Q1 2026 10-Q: no AI language; software expense up 12%** Software expense was $47 million, up 12% on a year earlier. The filing does not mention artificial intelligence. ([Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000047/fbc-20260331.htm))
- Apr 30, 2026 — **Proxy statement: internal AI capabilities 'progressed'** The 2026 proxy says S2 rolled out to teammates in mid-2025 on five principles including 'Data Enabled' and 'Risk and Control Managed', and that internal AI and automation capabilities progressed with the enterprise platform scheduled for early-2026 launch. It also discloses that director Lux sits on the board of Mphasis, which supplies data migration and management services. ([Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000039/fbc-20260430.htm))
- Apr 24, 2026 — **Q1 2026 call: six data centres into two** Consolidation into two colocation centres completed in the quarter without disruption; the bank runs two cores today and aims to exit one, worth roughly $40 million a year, on the way to a single core in 2027. ([Yahoo Finance](https://finance.yahoo.com/markets/stocks/articles/flagstar-flg-q1-2026-earnings-140646732.html))
- Mar 30, 2026 — **First phase of infrastructure modernisation complete** With Mphasis: a next-generation data centre and cloud platform. ([PR Newswire via FT Markets](https://markets.ft.com/data/announce/detail?dockey=600-202603301417PR_NEWS_USPRX____NY22478-1))
- Mar 16, 2026 — **Robert Martin appointed Head of AI and Engineering** One of the five March hires; he came from MUFG, where he built AI risk governance frameworks, and leads incubation in the Chief Technology Office plus identity, cloud, SRE and platform work. Eric Gunn (security, machine learning) and Justin Zimmerman (AI-driven compliance in cloud) joined the same day. ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-N-A--EXPANDS-TECHNOLOGY-LEADERSHIP-TEAM-ACCELERATING-THE-BANKS-TECHNOLOGY-ARCHITECTURE/default.aspx))
- Mar 16, 2026 — **Five senior technology leaders hired** From JPMorgan, U.S. Bank, MUFG and Mastercard, to accelerate the S2 transformation around the customer journey. ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-N-A--EXPANDS-TECHNOLOGY-LEADERSHIP-TEAM-ACCELERATING-THE-BANKS-TECHNOLOGY-ARCHITECTURE/default.aspx))
- Feb 27, 2026 — **2025 10-K carries no AI risk factor** The first annual report filed by the bank itself after the holding company was dissolved; its technology-change risk factor names digital assets such as stablecoins, and the filing does not mention artificial intelligence. ([Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000025/fbc-20251231.htm))
- Jan 30, 2026 — **Q4 2025 call: technology projects as an expense lever** CFO Lee Smith said technology projects 'coming on stream' would make the bank more efficient, alongside $4 million of severance for staff reductions executed in January 2026. The transcript text reviewed contains no reference to AI. ([The Motley Fool](https://fool.com/earnings/call-transcripts/2026/01/30/flagstar-flg-q4-2025-earnings-call-transcript))
- Jan 30, 2026 — **First profit after eight quarterly losses** Fourth-quarter 2025 results; the CFO says the bank is 'pivoting to the growth side of the story'. ([American Banker](https://americanbanker.com/news/flagstar-is-back-in-the-black-after-eight-quarters-of-losses), [Banking Dive](https://www.bankingdive.com/news/flagstar-profitability-cre-lending-layoffs/811122/))
- Jan 29, 2026 — **Cognizant partnership marks a year; AI centre of excellence to be explored** Cognizant works as an extension of the in-house technology team on S2, with co-branded development centres in Hyderabad and Manila; next, the two plan to explore an AI Center of Excellence in India. ([Cognizant (PR Newswire)](https://www.prnewswire.com/news-releases/cognizant-and-flagstar-bank-na-mark-one-year-partnership-advancing-flagstars-transformation-enhancing-client-experience-and-driving-efficiency-302674135.html))
- Jul 28, 2025 — **Plan to dissolve the holding company** About $15 million of savings; completed in October 2025. ([Banking Dive](https://www.bankingdive.com/news/flagstar-dissolve-holding-company-otting-15-million-savings-fed-occ-charter/754213/), [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx))
- Apr 24, 2025 — **Back from near-collapse** Bloomberg on Otting's path to profitability. ([Bloomberg](https://www.bloomberg.com/news/articles/2025-04-24/back-from-near-collapse-flagstar-charts-path-to-profitability))
- Apr 3, 2025 — **Otting sets the 2025 technology budget** In an interview Otting said Flagstar was investing $70 million to $80 million on technology and $30 million to $40 million on anti-money-laundering software and customer privacy in 2025, and that he expected to stay about five years. ([American Banker](https://americanbanker.com/news/how-joseph-otting-plans-to-pull-off-turnaround-of-flagstar))
- Jan 30, 2025 — **Sixty branches to close as $600 million of costs come out** The turnaround plan's cost leg; profitability expected in 2025. ([Banking Dive](https://www.bankingdive.com/news/flagstar-close-60-branches-cre-real-estate-20-private-client-locations/738778/), [Reuters](https://www.reuters.com/business/finance/flagstar-posts-smaller-loss-loan-loss-provisions-shrink-2025-01-30/))
- Oct 29, 2024 — **Christopher Higgins named Chief Information Officer** Reporting to Joseph Otting; Higgins led 13 post-merger systems conversions covering 1.2 million customers and 57 systems at U.S. Bank, and was Chief Operations and Information Officer at MUFG Americas. Otting said the bank wants to use technology 'to augment and enhance the client experience'. ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2024/FLAGSTAR-BANK-APPOINTS-SENIOR-LEADERS-TO-ELEVATE-TECHNOLOGY-INNOVATION-AND-RISK-OVERSIGHT/default.aspx))

## Where AI runs

| Use case | What | Status | Detail | Sources |
| --- | --- | --- | --- | --- |
| [Generative & agentic AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#generative-agentic-ai) | StarIQ multi-model orchestration | In production | Claude, Llama, Mistral and Titan behind one governed platform with consumption-based deployment. | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx) |
| [Cybersecurity](https://www.bankingnewsai.com/ai-regulation/by-use-case#cybersecurity) | AI-aware security layer | In production | Palo Alto Networks Prisma AI firewalls detect sensitive data, prompt injection and policy violations in real time. | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx) |
| [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general) | Integrated AI governance workflow | In production | Business case, compliance review and multi-level approvals in one auditable system. | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx) |
| [Generative & agentic AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#generative-agentic-ai) | RAG over documents and policies | In production | Secure queries with citation tracking and access-controlled knowledge bases. | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx) |
| [Customer-facing chatbots](https://www.bankingnewsai.com/ai-regulation/by-use-case#customer-chatbots) | StarIQ assist for branch and call-centre staff | In production | Trained on compliance, regulation and branch and call-centre policies and procedures so tellers, bankers and agents get faster, correct answers. | [American Banker](https://www.americanbanker.com/leaders/the-ai-enabled-bank-reimagining-retail-banking-from-branch-to-mobile) |
| [Credit scoring & underwriting](https://www.bankingnewsai.com/ai-regulation/by-use-case#credit-underwriting) | StarIQ for underwriting data discovery | Pilot | Credit underwriting uses StarIQ to find the data most relevant to faster decisions; risk management and marketing are the heaviest users. | [American Banker](https://www.americanbanker.com/leaders/the-ai-enabled-bank-reimagining-retail-banking-from-branch-to-mobile) |
| [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general) | AI strategy committee and tiered model routing | In production | The CIOO chairs an AI strategy committee attended by the CEO that prioritises a revenue and expense-reduction backlog; StarIQ routes work to three model tiers by complexity to manage cost. | [American Banker](https://www.americanbanker.com/leaders/the-ai-enabled-bank-reimagining-retail-banking-from-branch-to-mobile) |
| [Third-party & vendor AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#third-party-vendors) | Cognizant as an extension of the technology team | Announced | Co-branded development centres in Hyderabad and Manila; a planned exploration of an AI Center of Excellence in India. | [Cognizant (PR Newswire)](https://www.prnewswire.com/news-releases/cognizant-and-flagstar-bank-na-mark-one-year-partnership-advancing-flagstars-transformation-enhancing-client-experience-and-driving-efficiency-302674135.html) |
| [Customer-facing chatbots](https://www.bankingnewsai.com/ai-regulation/by-use-case#customer-chatbots) | Customer 360 and proactive private-banking insights | Announced | The S2 architecture's stated customer-facing goal. | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-N-A--EXPANDS-TECHNOLOGY-LEADERSHIP-TEAM-ACCELERATING-THE-BANKS-TECHNOLOGY-ARCHITECTURE/default.aspx) |
| [Fraud detection](https://www.bankingnewsai.com/ai-regulation/by-use-case#fraud) | Real-time core as the base for fraud decisions | Announced | CTO Pope says Finxact's real-time posting and single version of the data allow better fraud decisions and AI capabilities downstream; migrations are planned for summer 2027 and 2028. | [Banking Dive](https://www.bankingdive.com/news/flagstar-bank-fiserv-finxact-cloud-native-core-tech-modernization/828477/), [Fiserv (GlobeNewswire)](https://globenewswire.com/news-release/2026/08/17/3346102/0/en/fiserv-and-flagstar-bank-announce-strategic-core-banking-relationship.html) |
| [AML / KYC](https://www.bankingnewsai.com/ai-regulation/by-use-case#aml-kyc) | Anti-money-laundering software and customer privacy spend | In production | Otting put 2025 investment in AML software and customer privacy at $30 million to $40 million; the bank has not said whether the tools use machine learning. | [American Banker](https://americanbanker.com/news/how-joseph-otting-plans-to-pull-off-turnaround-of-flagstar) |
| [Cybersecurity](https://www.bankingnewsai.com/ai-regulation/by-use-case#cybersecurity) | Machine learning in security engineering | Announced | Eric Gunn, hired as Distinguished Engineer for Information Security, applies machine learning to cybersecurity problems; Flagstar has not described specific deployed tools beyond the StarIQ firewall layer. | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-N-A--EXPANDS-TECHNOLOGY-LEADERSHIP-TEAM-ACCELERATING-THE-BANKS-TECHNOLOGY-ARCHITECTURE/default.aspx) |
| [Third-party & vendor AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#third-party-vendors) | Mphasis: AI in the next phase of application modernisation | Announced | After consolidating six data centres into two, Mphasis and Flagstar said the next phase would modernise applications and operations using AI and next-generation technologies; Higgins counts Mphasis among eight S2 vendors. | [PR Newswire via FT Markets](https://markets.ft.com/data/announce/detail?dockey=600-202603301417PR_NEWS_USPRX____NY22478-1), [American Banker](https://www.americanbanker.com/news/how-flagstar-bank-integrated-its-acquired-data-centers) |
| [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general) | Head of AI with AI risk governance background | In production | Robert Martin, who established AI risk governance frameworks at MUFG, now strengthens governance frameworks and least-privilege access as Head of AI and Engineering; the board Risk Committee hears from the CRO, CCO and CISO. | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-N-A--EXPANDS-TECHNOLOGY-LEADERSHIP-TEAM-ACCELERATING-THE-BANKS-TECHNOLOGY-ARCHITECTURE/default.aspx), [Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000039/fbc-20260430.htm) |

## Disclosed numbers

| Measure | Value | As of | Sources |
| --- | --- | --- | --- |
| Data centres consolidated | 6 → 2 colocation centres (Ashburn and Chicago), in about one year | Jun 30, 2026 | [American Banker](https://www.americanbanker.com/news/how-flagstar-bank-integrated-its-acquired-data-centers), [Yahoo Finance](https://finance.yahoo.com/markets/stocks/articles/flagstar-flg-q1-2026-earnings-140646732.html), [American Banker](https://www.americanbanker.com/leaders/the-ai-enabled-bank-reimagining-retail-banking-from-branch-to-mobile) |
| S2 platform components | 12, of which StarIQ is one | Jul 30, 2026 | [American Banker](https://www.americanbanker.com/leaders/the-ai-enabled-bank-reimagining-retail-banking-from-branch-to-mobile) |
| Expected expense reduction from exiting one of two cores | ≈ $40 million a year (run rate) | Apr 24, 2026 | [Yahoo Finance](https://finance.yahoo.com/markets/stocks/articles/flagstar-flg-q1-2026-earnings-140646732.html) |
| Foundation models orchestrated by StarIQ | 4 (Claude, Llama, Mistral, Titan) | Jun 15, 2026 | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx) |
| Expected annual savings from core consolidation | $40–45 million | Aug 21, 2026 | [Banking Dive](https://www.bankingdive.com/news/flagstar-bank-fiserv-finxact-cloud-native-core-tech-modernization/828477/) |
| Cost reduction target in the turnaround | $600 million | Jan 30, 2025 | [Banking Dive](https://www.bankingdive.com/news/flagstar-close-60-branches-cre-real-estate-20-private-client-locations/738778/) |
| Total assets | $87.1 billion | Mar 31, 2026 | [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx) |
| Software expense, first half of 2026 | $96 million, up 20% from $80 million (Q2 alone: $49 million) | Jun 30, 2026 | [Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000068/fbc-20260630.htm) |
| Total operating expense, first half of 2026 | $868 million, down 10% from $968 million | Jun 30, 2026 | [Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000068/fbc-20260630.htm) |
| Figure Technology Solutions stake sold | $46 million of proceeds in Q2 2026; $4 million gain in the quarter | Jun 30, 2026 | [Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000068/fbc-20260630.htm) |
| 2025 technology and AML/privacy investment (CEO statement) | $70-80 million technology; $30-40 million AML software and customer privacy | Apr 3, 2025 | [American Banker](https://americanbanker.com/news/how-joseph-otting-plans-to-pull-off-turnaround-of-flagstar) |
| Data-centre failover time | Under 60 minutes to move workload, against about 8 hours for the old primary-to-secondary move and validation | Jun 30, 2026 | [American Banker](https://www.americanbanker.com/news/how-flagstar-bank-integrated-its-acquired-data-centers) |
| Outside companies working on S2 | 8, including Mphasis; 12 core-banking candidates were evaluated before Finxact | Aug 21, 2026 | [American Banker](https://www.americanbanker.com/news/how-flagstar-bank-integrated-its-acquired-data-centers), [Banking Dive](https://www.bankingdive.com/news/flagstar-bank-fiserv-finxact-cloud-native-core-tech-modernization/828477/) |
| Balance sheet at 30 June 2026 | $87.7 billion assets, $61.2 billion loans, $67.5 billion deposits, about 340 locations in nine states | Jun 30, 2026 | [Fiserv (GlobeNewswire)](https://globenewswire.com/news-release/2026/08/17/3346102/0/en/fiserv-and-flagstar-bank-announce-strategic-core-banking-relationship.html) |

## Quotes

> "I do chair an AI strategy committee, which is also attended by our CEO and other of my peers on the executive leadership team. And so we're prioritizing a backlog of work, balancing investments in revenue and investments in expense reduction." — Chris Higgins, Chief Information and Operations Officer, Jul 30, 2026 ([American Banker](https://www.americanbanker.com/leaders/the-ai-enabled-bank-reimagining-retail-banking-from-branch-to-mobile))

> "I would've thought my technology organization would be the number one user of Star IQ. Turns out it's risk management and marketing." — Chris Higgins, Chief Information and Operations Officer, Jul 30, 2026 ([American Banker](https://www.americanbanker.com/leaders/the-ai-enabled-bank-reimagining-retail-banking-from-branch-to-mobile))

> "Protecting the intellectual property behind our transformation is about more than legal defensibility — it signals to the market, our regulators, and our customers that Flagstar is building a modern institution with unique capabilities." — Chris Higgins, Chief Information and Operations Officer, Jun 15, 2026 ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx))

> "In other situations this would have taken two to three years, but in this case we finished it in a year." — Chris Higgins, Chief Information and Operations Officer, Jun 30, 2026 ([American Banker](https://www.americanbanker.com/news/how-flagstar-bank-integrated-its-acquired-data-centers))

> "The pending StarIQ patent signals that the innovation happening inside this institution is differentiated, defensible, and designed to create a lasting competitive advantage." — Jason Pope, Chief Technology Officer, Jun 15, 2026 ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx))

> "Getting rid of that batch window is not a technical footnote. When your system of record is real-time and there's a single, authoritative version of that truth, everything downstream can change." — Jason Pope, Chief Technology Officer, Aug 21, 2026 ([Banking Dive](https://www.bankingdive.com/news/flagstar-bank-fiserv-finxact-cloud-native-core-tech-modernization/828477/))

> "This is a business transformation that's enabled through technology and data. This is not a technology transformation." — Chris Higgins, Chief Information and Operations Officer, Aug 21, 2026 ([Banking Dive](https://www.bankingdive.com/news/flagstar-bank-fiserv-finxact-cloud-native-core-tech-modernization/828477/))

> "The doors are locked, the windows are sealed, the alarm systems are on. It's protected." — Chris Higgins, Chief Information and Operations Officer, Jun 22, 2026 ([Banking Dive](https://www.bankingdive.com/news/flagstar-cio-chris-higgins-s2-stariq-proprietary-tech-platform-ai/823404/))

> "Not only are we cutting costs, we continue to invest in Rich's business, technology as well." — Lee Smith, Co-President, Co-Chief Operating Officer and Chief Financial Officer, Jul 24, 2026 ([Investing.com](https://investing.com/news/transcripts/earnings-call-transcript-flagstar-bank-misses-q2-2026-estimates-as-shares-fall-93CH-4811998))

## Who runs AI

- **Joseph Otting** — Executive Chairman and CEO (CEO from April 2024; gave up the President title in May 2026; former Comptroller of the Currency) ([LinkedIn](https://www.linkedin.com/in/joseph-otting-911b3b5/)) ([American Banker](https://americanbanker.com/news/flagstar-is-back-in-the-black-after-eight-quarters-of-losses), [Banking Dive](https://www.bankingdive.com/news/flagstar-otting-extend-compensation-succession-raffetto-smith-co-president-nguyen-sullivan-menefee/820741/), [Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000053/flg-leadershipsuccession.htm))
- **Chris Higgins** — EVP, Chief Information and Operations Officer (from late 2024); chairs the AI strategy committee ([LinkedIn](https://www.linkedin.com/in/chiggins2/)) ([Banking Dive](https://www.bankingdive.com/news/flagstar-cio-chris-higgins-s2-stariq-proprietary-tech-platform-ai/823404/), [American Banker](https://www.americanbanker.com/news/how-flagstar-bank-integrated-its-acquired-data-centers), [American Banker](https://www.americanbanker.com/leaders/the-ai-enabled-bank-reimagining-retail-banking-from-branch-to-mobile))
- **Jason Pope** — EVP, Chief Technology Officer ([LinkedIn](https://www.linkedin.com/in/pope-jason/)) ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-N-A--EXPANDS-TECHNOLOGY-LEADERSHIP-TEAM-ACCELERATING-THE-BANKS-TECHNOLOGY-ARCHITECTURE/default.aspx), [Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx))
- **Lee Smith** — Co-President, Co-Chief Operating Officer and CFO; oversees information technology and operations since May 2026 ([LinkedIn](https://www.linkedin.com/in/leemsmith10/)) ([American Banker](https://americanbanker.com/news/flagstar-is-back-in-the-black-after-eight-quarters-of-losses), [Banking Dive](https://www.bankingdive.com/news/flagstar-bank-fiserv-finxact-cloud-native-core-tech-modernization/828477/), [Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000053/flg-leadershipsuccession.htm))
- **Robert Martin** — SVP, Distinguished Engineer, Head of AI and Engineering (from March 2026; formerly Director of Technology Strategy and Incubation at MUFG, where he established AI risk governance frameworks); leads incubation in the Chief Technology Office, identity and access management, and cloud, SRE and platform accountabilities ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-N-A--EXPANDS-TECHNOLOGY-LEADERSHIP-TEAM-ACCELERATING-THE-BANKS-TECHNOLOGY-ARCHITECTURE/default.aspx))
- **Eric Gunn** — SVP, Distinguished Engineer, Information Security (from March 2026; ex-U.S. Bank adversary emulation and range operations; applies machine learning to cybersecurity and is a named inventor on multiple U.S. patents) ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-N-A--EXPANDS-TECHNOLOGY-LEADERSHIP-TEAM-ACCELERATING-THE-BANKS-TECHNOLOGY-ARCHITECTURE/default.aspx))
- **Justin Zimmerman** — SVP, Distinguished Engineer, Cloud Services (from March 2026; ex-U.S. Bank, led governance and AI-driven compliance work across AWS and Azure; leads AI-enabled governance and X-as-code automation across cloud providers) ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-N-A--EXPANDS-TECHNOLOGY-LEADERSHIP-TEAM-ACCELERATING-THE-BANKS-TECHNOLOGY-ARCHITECTURE/default.aspx))
- **Christina Previti** — SVP, Head of Technology Product (from March 2026; ex-JPMorgan Chase); moves Enterprise Technology and Operations Services to a product operating model ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-N-A--EXPANDS-TECHNOLOGY-LEADERSHIP-TEAM-ACCELERATING-THE-BANKS-TECHNOLOGY-ARCHITECTURE/default.aspx))
- **James Kratzer** — SVP, Distinguished Engineer, Site Reliability Engineering (from March 2026; ex-Silicon Valley Bank cloud security); leads the pivot to SRE ([Flagstar Bank](https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-N-A--EXPANDS-TECHNOLOGY-LEADERSHIP-TEAM-ACCELERATING-THE-BANKS-TECHNOLOGY-ARCHITECTURE/default.aspx))
- **George Buchanan** — EVP and Chief Risk Officer (since March 2024; ex-Regions Bank); reports to the board Risk Assessment Committee, which also receives CIOO and CISO reports on technology risk ([Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000039/fbc-20260430.htm))
- **Richard Raffetto** — Co-President, Co-Chief Operating Officer and Chief Banking Officer (from May 2026); on the Q2 2026 call Smith cited continued investment in his business and in technology ([Flagstar Bank (SEC filings)](https://www.sec.gov/Archives/edgar/data/910073/000091007326000053/flg-leadershipsuccession.htm), [Investing.com](https://investing.com/news/transcripts/earnings-call-transcript-flagstar-bank-misses-q2-2026-estimates-as-shares-fall-93CH-4811998))

## Which AI vendors and fintechs does Flagstar work with?

| Company | What Flagstar uses it for | Status | Category |
| --- | --- | --- | --- |
| [Claude (Anthropic)](https://www.bankingnewsai.com/vendors/anthropic-claude) | StarIQ multi-model gen-AI platform, deployed early 2026, integrating Anthropic Claude with other models on AWS. | In production | [Enterprise AI assistants](https://www.bankingnewsai.com/ai-tools/enterprise-ai-assistants) |

Each vendor and fintech page cites the source for the relationship. [AI tools for banks](https://www.bankingnewsai.com/ai-tools) · [fintech and neobank AI dossiers](https://www.bankingnewsai.com/fintech).

## Regulators it answers to

- [OCC](https://www.bankingnewsai.com/ai-regulation/occ) — Flagstar is a national bank run by a former Comptroller; StarIQ's governance workflow maps directly onto the OCC's model-risk bulletin and its gen-AI risk perspective. See [OCC Bulletin 2026-13](https://www.bankingnewsai.com/ai-regulation/documents/occ-bulletin-2026-13), [OCC Semiannual Risk Perspective, Spring 2026](https://www.bankingnewsai.com/ai-regulation/documents/occ-semiannual-risk-perspective-spring-2026).
- [Federal Reserve](https://www.bankingnewsai.com/ai-regulation/federal-reserve) — AWS, Anthropic, Meta, Mistral, Palo Alto Networks, Mphasis and Fiserv are third-party relationships under interagency guidance. See [SR 23-4](https://www.bankingnewsai.com/ai-regulation/documents/fed-sr-23-4), [SR 26-2](https://www.bankingnewsai.com/ai-regulation/documents/fed-sr-26-2).
- [NY DFS](https://www.bankingnewsai.com/ai-regulation/ny-dfs) — A New York bank with private-banking clients: the DFS cyber rule and its frontier-model letter apply to an AI firewall architecture. See [23 NYCRR Part 500](https://www.bankingnewsai.com/ai-regulation/documents/ny-dfs-23-nycrr-part-500), [DFS Frontier AI Models Industry Letter (May 2026)](https://www.bankingnewsai.com/ai-regulation/documents/ny-dfs-industry-letter-2026-05-21-frontier-ai-models).
- [NIST](https://www.bankingnewsai.com/ai-regulation/nist) — Prompt-injection and sensitive-data detection controls correspond to the NIST gen-AI profile and its agent-security work. See [NIST AI 600-1 (Generative AI Profile)](https://www.bankingnewsai.com/ai-regulation/documents/nist-ai-600-1), [CAISI RFI on AI agent security (2026)](https://www.bankingnewsai.com/ai-regulation/documents/nist-caisi-rfi-ai-agent-security-2026).

## What the record suggests

### The most examinable AI architecture in the peer group

A single approval chain, a cited RAG layer and an AI firewall are what supervisors ask for; Flagstar has written them down and filed a patent. That is a disclosure other regionals will be measured against.

### Licensing would change the bank's regulatory shape

Selling S2 or StarIQ to other banks makes Flagstar a technology service provider subject to a different examination programme; 'optionality' has a supervisory price.

### Two core migrations and an AI platform share one team

Finxact migrations in 2027 and 2028 will absorb the same engineers now building Customer 360; sequencing is the execution risk.

### AI built during a turnaround carries the turnaround's discipline

Every use case passes a business-case gate because the bank was cutting $600 million; keeping that gate after profitability returns is the governance test.

## FAQ

### Who leads AI at Flagstar Bank?

No chief AI officer is named. Chris Higgins, EVP and chief information and operations officer since October 2024, chairs the AI strategy committee, which the CEO attends. Jason Pope, chief technology officer, is quoted beside him on the StarIQ patent filing. Robert Martin, SVP and Head of AI and Engineering, joined in March 2026 from MUFG, where he set up AI risk governance frameworks. Joseph Otting, executive chairman and CEO, sits above them; chief risk officer George Buchanan reports to the board Risk Assessment Committee. No chief data officer appears in the filings or releases reviewed.

### What is StarIQ?

Flagstar Bank's proprietary, patent-pending enterprise generative-AI orchestration system, deployed in early 2026 as part of its S2 platform. It runs multiple foundation models (Anthropic Claude, Meta Llama, Mistral and Amazon Titan) on AWS under consumption-based pricing, screens prompts through Palo Alto Networks AI firewalls, answers document and policy questions through a retrieval-augmented pipeline with citations, and routes each use case through an auditable governance workflow.

### Might Flagstar sell its technology to other banks?

It has not said so, but its chief information and operations officer, Chris Higgins, declined to rule it out in June 2026, saying his job is 'to create optionality'. The bank has applied to trademark the S2 platform and filed a provisional patent for StarIQ.

### Does Flagstar mention AI in its SEC filings?

Rarely. The 2025 10-K, the first-quarter 2026 10-Q and the second-quarter 2026 10-Q contain no reference to artificial intelligence. The April 2026 proxy statement has one sentence: internal AI and automation capabilities progressed in 2025, with the enterprise platform scheduled for launch in early 2026. Details of StarIQ, including Claude, Llama, Mistral and Titan, appear in a June 2026 press release and trade interviews rather than in regulatory filings. Software expense reached $96 million in the first half of 2026, up 20%.

### Which technology vendors does Flagstar use for AI and modernisation?

StarIQ runs Anthropic Claude, Meta Llama, Mistral and Amazon Titan models on Amazon Web Services, with Palo Alto Networks Prisma AI firewalls. Cognizant provides an offshore extension of the technology team in Hyderabad and Manila and plans an AI centre of excellence in India. Mphasis built the two new data centres, leased from Equinix, and will use AI in the next phase. Fiserv's Finxact becomes the single core, with migrations in summer 2027 and 2028. Higgins counts eight outside firms on S2.

## Sources (30)

1. Flagstar Bank Announces Proprietary Technology Transformation — Flagstar Bank, Jun 15, 2026. https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-ANNOUNCES-PROPRIETARY-TECHNOLOGY-TRANSFORMATION/default.aspx
2. Flagstar Bank, N.A. Expands Technology Leadership Team Accelerating the Bank's Technology Architecture — Flagstar Bank, Mar 16, 2026. https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2026/FLAGSTAR-BANK-N-A--EXPANDS-TECHNOLOGY-LEADERSHIP-TEAM-ACCELERATING-THE-BANKS-TECHNOLOGY-ARCHITECTURE/default.aspx
3. Flagstar CIO: Proprietary tech creates 'optionality' — Banking Dive, Jun 22, 2026. https://www.bankingdive.com/news/flagstar-cio-chris-higgins-s2-stariq-proprietary-tech-platform-ai/823404/
4. Flagstar picks cloud-native core to replace legacy patchwork — Banking Dive, Aug 21, 2026. https://www.bankingdive.com/news/flagstar-bank-fiserv-finxact-cloud-native-core-tech-modernization/828477/
5. Flagstar returns to profitability — Banking Dive, Feb 2, 2026. https://www.bankingdive.com/news/flagstar-profitability-cre-lending-layoffs/811122/
6. Flagstar extends CEO Otting's tenure but sets up succession race — Banking Dive, May 20, 2026. https://www.bankingdive.com/news/flagstar-otting-extend-compensation-succession-raffetto-smith-co-president-nguyen-sullivan-menefee/820741/
7. Flagstar wants to dissolve its holding company — Banking Dive, Jul 28, 2025. https://www.bankingdive.com/news/flagstar-dissolve-holding-company-otting-15-million-savings-fed-occ-charter/754213/
8. Flagstar to close roughly 60 retail branches this year — Banking Dive, Jan 30, 2025. https://www.bankingdive.com/news/flagstar-close-60-branches-cre-real-estate-20-private-client-locations/738778/
9. How Flagstar Bank integrated its acquired data centers — American Banker, Jun 30, 2026. https://www.americanbanker.com/news/how-flagstar-bank-integrated-its-acquired-data-centers
10. Flagstar is back in the black after eight quarters of losses — American Banker, Jan 30, 2026. https://americanbanker.com/news/flagstar-is-back-in-the-black-after-eight-quarters-of-losses
11. Flagstar's turnaround shows progress, but also hits bumps — American Banker, Jul 24, 2026. https://www.americanbanker.com/news/flagstars-turnaround-shows-progress-but-also-hits-bumps
12. Flagstar expects to turn profitable in 2025 as recovery push takes root — Reuters, Jan 30, 2025. https://www.reuters.com/business/finance/flagstar-posts-smaller-loss-loan-loss-provisions-shrink-2025-01-30/
13. Back From Near-Collapse, Flagstar Charts Path to Profitability — Bloomberg, Apr 24, 2025. https://www.bloomberg.com/news/articles/2025-04-24/back-from-near-collapse-flagstar-charts-path-to-profitability
14. Flagstar Bank Announces Proprietary Technology Transformation (wire) — PR Newswire via FT Markets, Jun 15, 2026. https://markets.ft.com/data/announce/detail?dockey=600-202606150830PR_NEWS_USPRX____NY82888-1
15. The AI-Enabled Bank: Reimagining Retail Banking from Branch to Mobile (Leaders, with Chris Higgins) — American Banker, Jul 30, 2026. https://www.americanbanker.com/leaders/the-ai-enabled-bank-reimagining-retail-banking-from-branch-to-mobile
16. Flagstar Bank, N.A. Annual Report on Form 10-K for the fiscal year ended December 31, 2025 — Flagstar Bank (SEC filings), Feb 27, 2026. https://www.sec.gov/Archives/edgar/data/910073/000091007326000025/fbc-20251231.htm
17. Flagstar Bank Extends Joseph Otting's Term as CEO and Announces Executive Leadership Updates (Form 8-K, Exhibit 99.1) — Flagstar Bank (SEC filings), May 18, 2026. https://www.sec.gov/Archives/edgar/data/910073/000091007326000053/flg-leadershipsuccession.htm
18. Flagstar (FLG) Q1 2026 Earnings Transcript — Yahoo Finance, Apr 24, 2026. https://finance.yahoo.com/markets/stocks/articles/flagstar-flg-q1-2026-earnings-140646732.html
19. Cognizant and Flagstar Bank, N.A. Mark One-Year Partnership, Advancing Flagstar's Transformation, Enhancing Client Experience and Driving Efficiency — Cognizant (PR Newswire), Jan 29, 2026. https://www.prnewswire.com/news-releases/cognizant-and-flagstar-bank-na-mark-one-year-partnership-advancing-flagstars-transformation-enhancing-client-experience-and-driving-efficiency-302674135.html
20. Mphasis and Flagstar Bank Mark Major Milestone by Completing First Phase of Modernizing the Bank's Technology Infrastructure — PR Newswire via FT Markets, Mar 30, 2026. https://markets.ft.com/data/announce/detail?dockey=600-202603301417PR_NEWS_USPRX____NY22478-1
21. Flagstar Bank Appoints Senior Leaders to Elevate Technology Innovation and Risk Oversight — Flagstar Bank, Oct 29, 2024. https://ir.flagstar.com/news-and-events/news-releases/press-release-details/2024/FLAGSTAR-BANK-APPOINTS-SENIOR-LEADERS-TO-ELEVATE-TECHNOLOGY-INNOVATION-AND-RISK-OVERSIGHT/default.aspx
22. How Joseph Otting plans to pull off turnaround of Flagstar — American Banker, Apr 3, 2025. https://americanbanker.com/news/how-joseph-otting-plans-to-pull-off-turnaround-of-flagstar
23. Flagstar (FLG) Q4 2025 Earnings Call Transcript (earnings call transcript, The Motley Fool) — The Motley Fool, Jan 30, 2026. https://fool.com/earnings/call-transcripts/2026/01/30/flagstar-flg-q4-2025-earnings-call-transcript
24. Flagstar Bank, N.A. Proxy Statement for the 2026 Annual Meeting (Form DEF 14A) — Flagstar Bank (SEC filings), Apr 30, 2026. https://www.sec.gov/Archives/edgar/data/910073/000091007326000039/fbc-20260430.htm
25. Flagstar Bank, N.A. Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 — Flagstar Bank (SEC filings), May 7, 2026. https://www.sec.gov/Archives/edgar/data/910073/000091007326000047/fbc-20260331.htm
26. Earnings call transcript: Flagstar Bank misses Q2 2026 estimates as shares fall — Investing.com, Jul 24, 2026. https://investing.com/news/transcripts/earnings-call-transcript-flagstar-bank-misses-q2-2026-estimates-as-shares-fall-93CH-4811998
27. Flagstar Bank, N.A. Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 — Flagstar Bank (SEC filings), Aug 6, 2026. https://www.sec.gov/Archives/edgar/data/910073/000091007326000068/fbc-20260630.htm
28. Fiserv and Flagstar Bank Announce Strategic Core Banking Relationship — Fiserv (GlobeNewswire), Aug 17, 2026. https://globenewswire.com/news-release/2026/08/17/3346102/0/en/fiserv-and-flagstar-bank-announce-strategic-core-banking-relationship.html
29. Flagstar Bank, N.A. to Report Third Quarter 2026 Earnings and Host Conference Call on October 23rd — Flagstar Bank (PR Newswire), Oct 9, 2026. https://prnewswire.com/news-releases/flagstar-bank-na-to-report-third-quarter-2026-earnings-and-host-conference-call-on-october-23rd-302902712.html
30. US 8,239,255 B2: Consumer incentive system and business method (assignee New York Community Bancorp, now Flagstar Financial) — Google Patents (USPTO), Aug 7, 2012. https://patents.google.com/patent/US8239255B2/en

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