Wrestling Payments is a podcast for professionals working at banks, credit unions, and FinTechs responsible for managing ACH and payment operations. In each episode, members of NEACH guide conversations to help professionals examine the challenges of modernizing payment operations. Ultimately, the stories uncovered through guest interviews and solo episodes will highlight industry trends and identify how organizations can build their payment operations for the future. Let's get into it!

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Season 1

Episode 4

Examining the New Role of Operations in Payments with Guest Linda Cooper

Episode Summary

The COVID-19 pandemic spurred innovation and modernization across different businesses and industries, and banking is one of the fields that had no choice but to keep up. However, innovation is an ongoing process that requires leveraging both new and existing resources effectively.

In this episode of the Wrestling Payments podcast, our host Joe Casali welcomes Linda Cooper, the VP & senior operations manager at Gorham Savings Bank. They talk about the ways to optimize processes and better leverage existing resources, how COVID has driven significant changes in the banking space, and the importance of continuous improvement.

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Guest-at-a-Glance

💡 Name: Linda Cooper

💡 What she does: She's the VP & senior operations manager at Gorham Savings Bank.

💡 Company: Gorham Savings Bank

💡 Noteworthy: Although Linda has been with the Gorham Savings Bank for ten years, she's not a lifelong banker. She has experience in multiple industries, including retail and manufacturing.

💡 Where to find Linda: LinkedIn

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Key Insights

We need to leverage existing resources better. Implementing new tools is not enough; we also need to leverage the existing resources more effectively. Linda explains, "Something new I've been thinking about as sort of backward innovation, meaning review, as things slow down. The economy’s slowing down; interest rates are up; a lot of us are seeing a decrease in volume of loan activity or whatever. I think that it's a prime opportunity to really review the usage of existing software to make sure you're leveraging all the functionality that's there. A lot of us implement systems for a specific reason or to cover a specific thing. And, 'Oh, we'll get to that later' — the new stuff — and then later never comes. And so, I think that to formalize that a little bit and create the bandwidth and get the right people around the table to really look at those things, to see what we're missing."

COVID spurred innovation in the banking industry. If there's anything that the pandemic taught us is that traditional ways don't always work best. Linda says, "People that just would not consider or couldn't wrap their heads around any changes to how we do things — removing paper from the process, doing things electronically — all of a sudden we did it, and we're like, 'Oh, wow. That works pretty well.' And so, it increased the appetite, I think, for change in a way that I'm not sure anything else would have done because we were forced into it. Now, that's not to say that there aren't people that went right back to their paper files, and they're so happy to be printing things, but a vast majority of us, I think, got on that bandwagon, which has changed the appetite, the environment for innovation."

Modernization is a continuous process. Modernization is ongoing and open-ending. There are no boundaries to innovation, even in the banking space. Linda says, "With the modernization, how can we better leverage these? And it's almost an ongoing process. Continuous improvement, I guess, is really what it is, in order to make sure that you're always using, always thinking, never settling for, 'Yeah, this is good enough.' Always looking to see, 'Is there a better way?'"

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Episode Highlights

Fraud highlights collaboration

"We look at fraud in a lot of different places, but fraud really highlights collaboration. It just becomes more and more; everybody's involved in prevention and detection. All of the new payment rails have rules and just more involvement in that area. So, I think that just remains relevant to everybody that has any involvement with NEACH and payments in general."

Optimize the existing processes as much as possible

"It's a huge amount of time. Now, granted, you may be talking two and a half hours across ten people. But still, nonetheless, it's a ton of time that was basically being wasted that we were able to capture with just simply implementing something that was there all along. Those are the kinds of things that really can pay off and that operations across all areas, of any industry really, should be looking at their systems to say, 'What is out there that I could do?'"

Innovation takes courage

"I think that oftentimes it takes a person or some people making that noise, not taking themselves too seriously and throwing things up against the wall to see if they stick. And you've got to have thick skin because some things aren't going to work, and sometimes they make perfect sense, and they still aren't going to be adopted; they're not going to be allowed for whatever reason. So, I think that's really it. Just looking at things always with the perspective of, 'I might not know everything about this.'"

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

 

Episode 3

Introducing FedNow in New England and How the System Will Affect FIs' Instant Payment Strategies

Episode Summary

NEACH recently conducted a survey with 145 participants about how the finance industry is adopting instant payments in New England. The respondents answered questions about available instant payment solutions and how they affect their strategy. 

In this episode of Wrestling Payments, host Joe Casali touches upon FedNow, a new instant payment system, and shares participants' take on how this new solution will add to their operations.

Joe also discusses when participants plan to implement their chosen instant payment solution and their biggest concerns regarding the process.

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Podcast Expert

Host name: Joe Casali
What he does: Joe is the executive vice president at NEACH.
Company: NEACH / Podcast
Where to find Joe: LinkedIn

Podcast Insights

🎙65% are either working on or have an instant payment strategy. The survey involved 145 participants answering questions regarding available solutions and a soon-to-be-launched system, FedNow.

🎙53% of all participants said they are interested in FedNow ''send and receive.'' That means they not only want to receive transactions via the system but also take advantage of the sending option.

🎙About 20% are interested in implementing it in 2023. The same percentage of participants said that they are considering implementing it next year. Around 1.5% want to do it by 2025, while 50% have an undefined timeframe. ''In the financial institution industry, there's a lot of waiting and seeing, 'I want someone else to make the mistakes, and then I'll participate.'''

 

Episode Highlights

How Vital Is FedNow to Your Strategy?

''One of the interesting numbers here is, 'We are waiting on FedNow to go live, see how it goes, and then make a decision.' That was 31%. The highest one — getting its responses at almost 40% — was, 'We're waiting on our cores.'

That's an interesting comment. Are the cores ready for instant payments? That's a question. If you're a financial institution, you'll ask your cores to see where they are. Interestingly, 20% said there's no plan to connect, and 13% said it is especially important.''

How Vital Are Real Time Payments (RTP) to Your Strategy?

''15% have said, 'We're already on it,' and another 22% or 23% said, 'It is especially important.' Those are good numbers. We're looking at 37% are either on it or it's especially important. 34% are waiting on their cores. So there's a trend here. And no plans to connect to RTP, that was 26% of respondents. We had 141 of the 145 respond to that one.''

FedNow and RTP Have a Request for Payment Feature

''The request for payment lets a biller send an instruction that says, 'Hey, I want your financial institution to pay me, so I want your institution to be a sender.' It has all the instructions in there to get a bill paid.

But it's not that they're sending a payment; they're sending an instruction for your institution to send a payment to that receiver. That's a newer feature of instant payment systems. And it looks like there's a lot more interest in the FedNow request for payment than the RTP request for payment. But 10% and 15%, it's relatively the same number.''

The Biggest Concern Regarding Instant Payment Systems

''The biggest concern was fraud. We're at 59% of all respondents, probably the highest on the presentation. So 59% said, 'We are concerned about fraud.'

I have to do my part here and say that it is not faster payment fraud; it's a fraud. Just like ACH fraud is not ACH fraud; it's an account takeover; it's phishing; it's an email compromise. So it's any number of vectors of fraud, but it just happens to be in the ACH network.

The concern here, and I think it's a heightened concern, I don't think the fraud is any different. Maybe the implications are bigger. And this is my opinion only.''

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen below.

Episode 2

How to Manage Notifications of Change

Episode Summary

Welcome to another episode of Wrestling Payments. We dedicate this session to Notifications of Change (NOCs), or as many refer to them, No One Cares. In this episode, our host Joe Casali shares three cases where receiving financial institutions* wrestled with NOCs. As part of the analysis, Joe describes the causes and the consequences of not addressing the issues. Finally, he shares valuable tips on how to prevent unpleasant scenarios caused by ignoring NOCs. *Names have been changed to protect the actors in the cases.

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Podcast Expert

Host: Joe Casali
Company: NEACH

Podcast Insights

🎙Educate your originators on what notifications of change are. While analyzing the background, including the response and the consequences of the first case (you can find out more about it in the highlight section below), Joe says that ODFIs must train their originators on how to act regarding NOCs. Otherwise, they risk penalties. ''They have to know what a NOC is. They have to know how to deal with it. They have to be set up right to get the information.''

🎙If you receive entries you must wrestle with, file a notice of possible rule violation. Based on a case initiated on the suspicion that an originator acted against the norms, Joe suggests notifying Nacha, or ''You can say something directly to an ODFI, not just as a contact registry. You can reach out, but the system fines and rules enforcement will make it official if you need to escalate it to that point.''

🎙You must receive NOC reports regularly. That's the third and final tip Joe shares in this episode, adding: ''If you don't have any NOCs, something's wrong. That may not be totally true, but you should probably get at least one NOC over a year or two. So check to confirm that you're getting the NOC report, understand what it's saying, and make the changes as soon as possible.''

Episode Highlights

#1 McCormick Bank and Its Originator Failed to Respond to Notifications of Change

''We have ODFI, the originating sending bank, whatever you wanna call it. The sending institution received a notice of possible NOC violation involving its originator, Pritchard Employer Group.

We can figure out that that's maybe a payroll company working through McCormick Bank, something's happened, and because Nacha can only talk to the sending bank or the receiving bank, they're talking to the sending bank because the receiving bank has been fixing something and it's not getting fixed.

They've been sending NOCs; no one's paying attention to them. So McCormick Bank and Pritchett Employer Group acknowledged this initial violation and stated they would resolve the issue. [...] McCormick Bank responded by saying, 'Guilty. We did it. We've ignored him. We're going to fix it.'

Nacha continues to receive additional reports of possible violations from RDFI, citing the same rules and fraction. So even though Pritchard Employer Group said they were going to fix it, and McCormick Bank said, ‘We're going to fix it.’ It didn't get fixed.''
 

#2 Riley Bank Received a Notification of Possible Rules Violation Regarding a NOC Involving Its Originator, Bonner Employer Group

''Riley Bank and Bonner Employer Group acknowledged the violation. [...]

A discussion with Riley Bank revealed that Bonner Group thought that as long as its customers, the receiver, and the person received the money owed to them, and the transaction wasn't being returned, Bonner Employer Group didn't need to act on the NOCs.

So there's a case where these entries come in, RDFIs wrestle with them, get them in the right place, but then send the note to say, 'Hey, can you change the account number? Hey, this is a checking account, not a savings account. Can you fix it?' And in this case, Bonner Employer Group was ignoring them and saying, 'Hey, everyone's getting paid. What do we care?'

The ACH Rules Enforcement Panel reviewed the issue and determined that the ODFI is responsible for the originator to act properly on each NOC.

As a violation submission had escalated to class two status, they were subject to a fine between $0 and $100,000 per month until the issue was resolved. And the ACH Rules Enforcement Panel decided in this case to issue a one-time fine of $10,000.''
 

#3 Emerson Bank Received a Notice of Possible Rule Violation Regarding an NOC Involving Originator, Riley Health Group

''Emerson Bank and Riley Health Group acknowledged the violation and stated they would resolve the issue. Again, critical because it looks bad from a review perspective if you said, 'Nope, we're not ignoring NOCs.' But then the evidence shows you weren't responding to NOCs.

So the original incident, and now we have 15 additional months of reports of violations that they're ignoring NOCs from several RDFIs. So it's not just one institution complaining; it's systemwide related to the same rule infraction. Each time, Nacha escalated the issue with Emerson Bank via ongoing notice of possible rule fines and imposing escalating fine amounts for each infraction. Emerson Bank met with the Health Group to address this ongoing issue.

This is great; this should probably happen in each case so the parties understand what's happening. What's going wrong? Why are you continuing not to address NOCs?

Riley Health Group determined that the underlying cause of the unresolved NOCs related to an internal issue with the delivery of their NOC file. Whoa. We got an operational issue.''

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen below.

 

Episode 1

Welcome to Wrestling Payments

Episode Summary

Welcome to the first episode of Wrestling Payments by NEACH, a member-based payment association for financial institutions in other organizations supplying payment-related services. NEACH is a recognized and licensed ACH education, publications, and support provider. 

In the show's first episode, we are joined by Sean Carter, the president & CEO, and Sandy Ortins, the SVP of Operations, at NEACH. Sean and Sandy reveal why they decided to start a podcast, who it is for, the issues they will tackle, the guest list, and how they came up with the name. 

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Podcast Expert

Name: Sean Carter, Sandy Ortins
What they do: Sean is the president & CEO; Sandy is the SVP of Operations.
Company: NEACH
Noteworthy: Sean has been with NEACH for around 25 years. He started in accounting and is currently responsible for the company's strategic direction. Sandy has a banking background, and before working at NEACH, she worked at a community bank. She oversees education membership at NEACH. 
Where to find them: Sean: LinkedIn; Sandy: LinkedIn 

Podcast Insights

🎙Digitalization concerns both FIs and their users. It's one of the most critical changes in the finance space. And so, as digitalization has entered every pore of the business world, the financial space must adapt to it. Therefore, a partnership between a bank and a vendor is a prerequisite for growth. ''There's no growth strategy that doesn't include some form of digitalization. And a lot of that is related to payments. So people didn't think about that when we were just starting. We were excited when we would get an originating depository institution. That was a big win for us to say, ‘Oh, we have a new member FI that originates payments.’ And now the conversations are more about what network are you playing in, where are you driving your customers, who are your partners, what are you looking to invest in next?" says Sean.

🎙Our podcast is not only for FIs and associated institutions. Instead, it's for everyone who can encounter any payment issue at an individual or an organizational level. ''Many of the challenges in payments today are because of the end users, either the sender or the receiver of the payment, which is not the financial institution. So I think for corporations, especially with all the changes that the banks go through, that ends up in their lap. So if a bank is going more digital, ultimately, their customers have to get digital. So I do think there's a broader audience," explains Sean. 

🎙We must initiate and encourage conversations with FinTech companies, as we are the link to bringing their offer closer to the customers and resolving any concerns customers can come across when considering a particular service provider. ''It's important for those conversations to happen for us because we can support the members through not pre-qualifying or — I can't think of the word. But almost when we're working with a vendor or FinTech that wants to deal with an FI, we can help those conversations and help the FinTech be a little more aware of what they should be discussing,'' says Sean.

Episode Highlights

How Payments Have Evolved And Changed Over Time

''I was on a call earlier talking about the AAP exam, and people brought up how, back then, it was two SEC Codes, no international payments in ACH, and no new settlement windows. So a dramatic change over the last ten years, specifically in ACH. And that's just a small piece.

The world around payments has changed rapidly. We saw it in ACH with the rise of third parties that are so critical to the network, but then you have to govern them and make sure that everybody's managing the risk in the network. [...]

And the same thing is happening for FIs today, looking for their FinTech partnerships that allow them to innovate and all that touches payments. [...] The biggest change is that the discussions are so different now than ever,'' says Sean.


Sandy's Background in Banking Is a Value Add Because She Brings a New Perspective

''I guess I have a different perspective than you guys probably have. We've had conversations, I remember. Joe, years ago when the healthcare payment CCD+ Rule came, and you were like, ‘Everyone needs to know this.’ And I was like, ‘Nobody cares.’ 

It is because I worked in that industry. You care about what gets you through the day. Having a CCD+ and knowing the re-association number, no one cares about that. 

They're trying to get through the day, meet all their deadlines, get everything out the door that they're supposed to; disasters always happen, but finding out what a re-association number is not one of 'em,'' explains Sandy.


The Rationale Behind the NEACH Team's Decision to Start a Podcast

''NEACH, at its core, is a trade association. We are here to bring information to our members so they can strive in whatever they try. And so, a podcast is another way to get that content out to people. And we can do it in a way that makes it easily more relatable to the listener.

Think about going to a workshop. There might be four hours in a workshop, and maybe an hour and a half of that applies to your job, and you need to learn, know, and understand it. Whereas podcasting allows busy people, folks trying to get through the day, but they still need to develop; they need to be able to bring information back to management or to help themselves become management. So this gives them the ability to do that,'' says Sean.


Why NEACH Uses ''Wrestling'' in the Show's Name

''For the payments industry, it is a perfect metaphor for what they're doing. What's the number one move in wrestling? It is the grapple. So you have to grapple each day with time, resources, and where we are going to deploy. What's at the heart of wrestling? It's competition.

And so, now you see all these new players. We have FedNow; we have RTP. They're not fighting each other, but it is a competition between who's offering the better product at the better price and who's easier to connect to. So the financial institution and the corporate end users have to grapple with which direction works for them and their business,'' explains Sean.


To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen below.

 

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