Mark Dixon, AAP, APRP, NCP, is NEACH’s Vice President of Education. Mark has worked in varying capacities such as retail, electronic services, and IT operations for financial institutions of various sizes and types. He focuses on developing educational programs and offerings and exploring innovative solutions and technologies that will help position members for success, both now and in the future.
We talked to Mark about some issues facing both FIs and FinTechs and what he plans to cover during NEACH’s Future of Payments Symposium.
You have a Future of Payments Symposium session about conception vs. reality in payment modernization. Can you give me an example of when a concept is great but falls short when viewed through the “reality filter?”
There are many factors at play in our modernizing payments landscape.
Hot topic concepts such as instant payments, artificial intelligence, application program interfaces, open banking models, metaverse, ISO 20222, voice payments, banking as a service, and many more are broadly discussed across the industry. Still, we don't always discuss the connection between these concepts and how they translate into practical solutions in the financial services landscape. It’s great to talk about what’s happening in modernization but so much better to take those concepts and turn them into something real.
For instance, AI tends to be shiny and new. Sometimes we stretch to think how advanced AI can be used in financial services. However, AI is being embedded into applications FIs use for business intelligence and fraud monitoring systems. The FI needs to understand these technologies but may not be actively managing the technology. In this way it needs to be part of the modernization conversation but maybe not as segmented of a topic as the industry makes it out to be.
At the Future of Payments Symposium. I’ll sit down with Joanne Pearce – Chief Digital Officer at New Hampshire Mutual Bancorp to discuss payment modernization hot topics and counter industry expectations vs. pragmatism. Audience members are encouraged to engage freely with the speakers throughout the session to maximize the potential for valuable dialogue.
What can FIs learn from FinTechs when it comes to payments modernization and executing on plans? And vice-versa: What can FinTechs learn from an established FI?
FinTechs tend to approach solving problems without using existing constraints. Their first principle is really the scientific method.
For instance, a FinTech might try to solve the problem of guiding a customer through the process of financial health and wealth-building. They will look at this problem and try and find a way to solve for it building an application, interface, tools, etc.
But an FI may look at this problem under the lens of their existing online banking tools. The existing online interface poses a constraint and creates more of interactive approach which may not be as user friendly or innovative.
I feel like the two become a perfect marriage when innovative solutions are grounded by regulatory and process-related constraints that banks can help Fintech align with.
Personally, what are some things happening now in the world of payments that you find exciting? Or challenging?
I find banking as a service models both exciting and challenging. With banking as a service, innovative solutions can be offered that benefit front-end service providers (and ultimately the consumers and businesses leveraging them) and FIs are then able to capitalize on new revenue and partnership opportunities.
It’s a perfect blend into the next-gen banking model that furthers the convergence of technology and banking. What’s interesting on the challenge front is all the responsibility the FI takes on and the need to understand how to manage its risks and understand its role and requirements.
What, in your opinion, are key regulatory issues we need to keep in mind for the future of payments?
This is all about third-party management and data ownership and protection. Who owns the data? Who is responsible? What roles do FIs have? How responsible is the third party? And how does the consumer have a say? These are the questions we need to answer, and quite frankly, it can’t all be on the FI.
Why is this Symposium so important for NEACH members?
The Future of Payment Symposium provides attendees with a forum that connects them to resources, people, and information needed to help them navigate a complex and ever-changing and evolving payment ecosystem.
Our members should participate to ensure they understand what factors are at play and gain access to what they need to properly strategize on this front. As our industry continues to modernize, failing to keep a pulse on what’s up and coming poses the risk that organizations may be left behind. I hope you can join us as we dive into the ins and outs of payment modernization in today’s complex banking environment and challenge industry expectations with the realities of implementation.
To sign up for the Future of Payments Symposium Nov. 2-3, please visit https://fps.neach.org.
AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.