Top Issues in Payments — Recommendations for Financial Institutions

As financial institutions move into 2023 planning, they need to consider how competition in the form of Big Tech, money services businesses, payments apps, rising cryptocurrency interest, and other payment trends are reshaping the industry. More and more financial institution customers and members, businesses and consumers alike, are turning to non-bank sources that provide ease of use, convenience, and speed, putting financial institutions’ payments volume, revenue, and customer/member relationships at risk.

Our “Top Issues in Payments” infographic highlights the impact of these trends on financial institutions and the industry. To ensure financial institutions remain central to payments, they will need to strategically address these issues moving forward.

There’s a lot to consider, but here are some thoughts on what to do.

• Educate yourself about new industry opportunities and players. With the current pace of change, it's almost impossible to stay up-to-date on recent industry developments and opportunities, but some stand out as “must-know” developments. For example, the Federal Reserve will enter the instant payments space in 2023 with its FedNow^(SM) Service, and its reach alone signals that real-time payments will become table stakes. The Clearing House is also ramping up with talk of cross-border payments on the Real-Time Network^®, allowing for new payments opportunity. Also relatively new on the payments scene is CHUCK, a tool that enables users to initiate P2P payments through various methods their bank chooses, from ACH to Venmo. CHUCK also has plans to eventually add FedNow for half or less of the per-transaction cost of Zelle, according to the American Banker. Financial institutions must make the most of these new opportunities and players in the payments space to remain competitive, starting with understanding their services and available options.

• Develop a comprehensive payments strategy. If you don’t have a payments strategy in place, now’s the time to make it a priority. And if you have one, you want to evaluate it against the latest industry trends to ensure you’re addressing new threats and opportunities. Financial institutions must act strategically and decisively in the year ahead. A current payments strategy, considering recent developments and players in the payments space, shifting customer demands, and new revenue-generating opportunities, is a critical piece of the payments puzzle to remain competitive in 2023 and beyond.

• Consider FinTech partnerships as a source of technological support and a potential source for revenue-generating opportunities. Many financial technology providers are partnering with community banks and credit unions to respond to customers’ shifting demands. For example, COCC, a financial technology firm, services financial institutions throughout the Northeastern United States. The company offers core banking services, digital and mobile banking, and more, and is enabling solutions like RTP to ensure New England FIs remain on the front edge of payments innovation. Almond FinTech is another provider supporting financial institutions, and their customers move money across borders. By partnering with FinTech providers like these and others who will be featured at NEACH’s Future of Payments Symposium II, financial institutions can offer their customers innovative solutions that work with their lifestyles.

To help your organization address emerging issues and prepare for what’s next, join us for The Future of Payments Symposium II on Dec. 1, 2022. This virtual event brings together banking, payments, and FinTech professionals to discuss the evolution of payments, its impact on financial institutions, and solutions to position you for success in 2023 and beyond.

Click here to learn more about the Future of Payments Symposium.