Taken from the blog of Sandy Ortins, SVP, Operations, NEACH
What’s next in payments? It’s a question we should be continually asking ourselves in today’s rapidly evolving payments landscape. As new efforts unfold, it is critical that we stay on the cutting edge of new developments through continuing education, especially in the areas of financial technology and innovation, both of which are growing exponentially.
At last year’s Innovating Payments Conference, we addressed a number of topics that fall into such categories as artificial intelligence, API, and blockchain, to name a few. A FinTech panel and open forum discussions also allowed for the free exchange of ideas as attendees explored the intersection of FinTech and financial institution innovation.
But a lot has happened in a year.
For example, artificial intelligence continues to gain ground as more and more financial institutions are instituting AI to enhance loan decisioning, reduce fraud, and support customer relations in the form of chatbots.
As Towards Data Science reports:
Artificial Intelligence provides a faster, more accurate assessment of a potential borrower, at less cost, and accounts for a wider variety of factors, which leads to a better-informed, data-backed decision. Credit scoring provided by AI is based on more complex and sophisticated rules compared to those used in traditional credit scoring systems. It helps lenders distinguish between high default risk applicants and those who are credit-worthy but lack an extensive credit history.
Also expanding and evolving is the use of AI for fraud reduction and conversational chatbots to enhance customer relations and service. With new developments in these areas occurring almost daily, there is an ongoing need for financial institutions to educate themselves on what’s next in these areas so they can strategically position themselves for the future.
FI/FinTech Innovation & Partnerships
Partnerships for innovation between financial institutions and FinTechs are also on the rise with proven results. When financial institutions and FinTechs partner together to solve specific problems and provide supporting data that demonstrates measurable results, it’s a win not only for the parties involved but also for financial institutions’ members and customers.
By partnering and learning from entrepreneurial experts, we have a unique opportunity to get ahead of the next wave of products, services, and trends.
The Bottom Line
So much is happening in payments right now, it’s a challenge to stay on top of the innovations. From the Fed real-time gross settlement initiative to the evolution of contactless cards and digital wallets and beyond, there’s more happening in this space than at any time in history. But the trends reveal an important role for banks and credit unions as the landscape evolves. FIs are rethinking the way it does payments, which can serve as a catalyst for innovation.
With the rapid rate of change, let’s make sure we’re embracing progress. It seems contradictory, but what will help banks is putting together a “disruption agenda.” How will you address those technologies that are changing the nature of the business? How are you going to grow you organization and payments business in the next 12-18 months? Ongoing education on industry developments certainly can lead you on the right path.
NEACH’s 2019 Innovating Payments Conference, Oct. 9-10, 2019, Hilton Boston Logan Airport can help you in meeting these challenges.
Where are you when it comes to partnering with a FinTech startup? What can you learn from other successful partnerships?
 Portions of this post are excerpted from NEACH’s publication, Payment Innovation: Finding Ourselves Faster, Smarter, Better.