Breaking Down Your Payments Strategy Questions - What are the most important elements of a payments strategy?

So, what are the most important elements of a payments strategy?

While no two strategies look the same, there are some consistent elements that need to be addressed. With that in mind, NEACH collaborated on the Faster Payments Playbook with the U.S. Faster Payments Council and Nacha’s Payments Innovation Alliance, and from that work, we outlined what we feel are critical considerations.

• Environmental Assessment – In photography, you want to look at the full picture before you zoom in for your close-up. The same holds true with payments. We need to understand what’s out there, what our options are, and what environmental factors are shaping today’s landscape before we decide where we need to be heading.

For example, one new trend in payments involves FIs creating digital banking subsidiaries to solve problems in niche markets. Case in point: at last year’s Innovating Payments Conference, NYMBUS, a FinTech providing digital banking solutions, shared a case study where a bank partner launched a separate bank  as a digital-only subsidiary dedicated to supporting the medical community. 

This anecdote only scratches the surface of the new potential in the market today. Exploring the current landscape and non-traditional approaches opens doors for “outside-the-box” thinking that may help your institution evolve in unexpected ways.

• Review of Current and Prospective Customer/Member Expectations – Beyond the bigger landscape, you have to account for your unique piece of the market. What do your customers/members need to transact more efficiently? What are their new payments expectations in an Apple/Google/Alexa world? What about prospective customers’/members’ needs? What will they be looking for? Aligning strategy with audience will help provide the lens through which to review new opportunities.

• Evaluation of Institutional Fit – It all comes down to exploring how your institution’s payments plans respond to the environment and meet customer/member needs. You want to identify how new technologies tie back to your overall business strategy and into your existing operations. This assessment helps to ensure that you invest in the technologies that specifically match your institution’s unique needs. While technology powers payments, it’s not about technology driving your decisions, but about your plans being supported by the technology.  

The Playbook dives deeper into how to incorporate these considerations into your strategy, and we encourage you to take advantage of this resource by visiting https://fasterpaymentsplaybook.org.

Breaking Down Your Payments Strategy Questions:

• (Part I) - Why do we need a specific payments strategy if we have an overall business strategy?
• (Part II) - What are the most important elements of a payments strategy?
• (Part III) - What about faster payments? How do they tie into our payments strategy?
• (Part IV) - What role do FinTechs play in a payments strategy?