From Banking as a Service to AI: Wrestling Payments in 2024 with Guest Sean Carter and Mary Mumper-Morrison
Wrestling Payments Podcast: Season 2 - Episode 21
In this episode of Wrestling Payments, host Joseph Casali is joined by Sean Carter, President & CEO of NEACH, and Mary Mumper-Morrison, NEACH’s Education Director, for an insightful discussion on the evolving landscape of payments. The trio dives into the significant changes from 2024, including NEACH rule updates and the growing adoption of AI in financial systems. They reflect on the year’s challenges and how fraud has escalated, demanding innovative responses from the industry.
Mary shares her expertise on regulatory shifts, such as the CFPB’s personal financial data rights rule, while Sean highlights the importance of collaboration between operational and compliance teams to tackle fraud effectively. Both guests emphasize the need for clearer fraud definitions and better public education to combat scams and deception.
Looking ahead to 2025, the conversation explores emerging opportunities with FinTech partnerships, embedded finance, and AI-driven innovation. The episode wraps with hopes for reducing fraud and improving industry resilience.
Download Episode Transcript
Guest-at-a-Glance
💡 Name: Sean Carter
💡What they do: President & CEO
💡Company: NEACH
💡Noteworthy: A payments industry veteran passionate about fraud prevention, NEACH rule evolution, and fostering collaboration within financial institutions.
💡 Where to find them: LinkedIn
Guest-at-a-Glance
💡 Name: Mary Mumper-Morrison
💡What they do: Education Director
💡Company: NEACH
💡Noteworthy: An experienced educator with 25+ years in banking, specializing in operations, audit, and regulatory guidance for payments systems.
💡 Where to find them: LinkedIn
Key Insights
Fraud Prevention Needs Industry Collaboration
Sean Carter emphasizes the critical need for a unified approach to combating fraud in the payments industry. He highlights how fraud has evolved into an organized business, often involving global operations and even trafficked individuals. Carter stresses that banks and credit unions cannot shoulder this burden alone, as addressing fraud effectively requires the involvement of regulators, social media platforms, and telecom providers. He calls for consistent definitions of fraud and scams across the industry to enable targeted solutions and public awareness campaigns. Drawing parallels with successful public service efforts like Smokey Bear, Carter suggests that impactful education can drive behavioral change and reduce vulnerabilities among consumers. By fostering collaboration and innovative thinking, the industry can take meaningful steps to reduce fraud's impact.
AI's Role in Payments Innovation and Security
Mary Mumper-Morrison explores the transformative potential of AI in the payments industry, from improving security to streamlining operations. She highlights how AI tools are already being leveraged to enhance fraud detection and support regulatory compliance. However, she also warns of the challenges in change management, urging financial institutions to involve employees in conversations about AI’s integration to avoid resistance and fear of job displacement. Mumper-Morrison points out that AI is not a magic solution but a tool to address gaps in efficiency and security, allowing human employees to focus on higher-impact tasks. By balancing innovation with ethical considerations and staff engagement, AI could become a cornerstone for the future of payments.
The Growing Importance of Embedded Finance
Mary Mumper-Morrison discusses the rapid expansion of embedded finance and its implications for financial institutions. She explains how this trend integrates financial services like payments, lending, and banking directly into non-financial platforms, such as social media or e-commerce sites. This shift is reshaping consumer expectations for convenience and accessibility, offering new opportunities for partnerships between financial institutions and FinTechs. Mumper-Morrison also highlights the regulatory complexities that arise as financial services spread across industries, requiring institutions to stay ahead of compliance challenges. As embedded finance continues to grow, it will likely redefine how consumers interact with financial services and how institutions design their offerings to remain competitive.
Fraud Education Requires a Public-Private Approach
Sean Carter highlights the need for a collaborative strategy to combat fraud effectively. He explains that financial institutions alone cannot shoulder the responsibility of educating the public about scams and fraudulent activity. Drawing parallels to successful public service campaigns like Smokey Bear, Carter argues for impactful, guilt-inducing messaging that ties consumer behavior to the negative outcomes of fraud. By involving regulators, social media platforms, and telecom providers, the industry can drive meaningful change in fraud prevention and public awareness.
Episode Highlights
Fraud's Expanding Impact and Industry Responsibilities
Timestamp: [00:11:00]
Sean Carter discusses the alarming growth of fraud and its widespread impact on financial institutions, businesses, and individuals. He emphasizes that the current measures to combat fraud are not sufficient, requiring a shift in strategy and increased industry collaboration. Carter notes that financial institutions must adopt a proactive approach, fostering partnerships across regulatory, social, and technology sectors to tackle the issue more effectively.
"I agree with the 1033. We just had our member meeting the other day... Fraud, to me, is unbelievable. It's heartbreaking, to be really honest... We're not going to get fraud to zero, but we need to reduce it significantly."
NEACH Rule Updates and Their Implications
Timestamp: [00:05:00]
Mary Mumper-Morrison explains the implications of NEACH's new rule changes, highlighting how they aim to reduce fraud and improve compliance across financial institutions. She also details the challenges these rules pose for institutions that must adapt their operations to meet tighter timelines and more rigorous standards.
"You have to make sure that you respond to those notices of requests for return within 10 business days. These proposals are significant and hopefully will have an impact on fraud through the network."
The Rise of Banking as a Service
Timestamp: [00:08:00]
Mary Mumper-Morrison explores the growing trend of Banking as a Service (BaaS) and its implications for financial institutions and FinTechs. She describes how partnerships between banks and non-bank entities are reshaping the financial ecosystem, allowing businesses to offer financial products without obtaining a bank charter.
"So, banking as a service is really... a FinTech company or something along those lines... partnering with a financial institution in order to offer products and services... essentially using the license of their partner."
Preparing for the Future of Real-Time Payments
Timestamp: [00:13:00]
Sean Carter discusses the evolving real-time payments landscape, including initiatives like FedNow and NEACH’s exploration of weekend processing. He emphasizes how these advancements could transform payment operations, though significant regulatory and operational hurdles remain.
"The Federal Reserve has long been part of improving the U.S. financial payment system... Opening the National Settlement Service could create the possibility of wires on weekends and holidays... though we’re a long way off."
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