ABA Banking Journal - September/October 2017 - 36

SPECIAL REPORT > TECHNOLOGY AND INNOVATION

Let's Talk Payments
Findings from the 2017 Payments Strategy Survey
With more and more consumers turning to mobile payments, new technologies
changing how banks and fintech entities interact and competition from all
corners of the marketplace, it's a new world of payments. We asked 200 plus
banks what strategies they have adopted-or plan to adopt-to stay ahead of
the payments curve. The 2017 Payments Strategy Survey-conducted by ABA
and Capital Performance Group-is available on aba.com.
The shift away from traditional payments (cash and checks) to electronic
payments is here. Six in 10 transactions happen with a card, and 80 percent
of the dollar value of all transactions are accounted for with ACH transfers.
Payments drive consumer loyalty. They're more than a transaction; payments
are a way to engage with customers.

Current Challenges
Data Capture. Most banks (71 percent) do not capture or analyze payments
data. The ones that do aren't looking at customer behavior-it's more for
fraud detection (88 percent) and tracking activity volumes (96 percent).
Risk Management. Data security ranks as the top challenge in competing
in payments today, followed by technology integration. About half of
respondents also ranked changing customer preferences (52 percent) and
identifying the appropriate partners (48 percent) as significantly challenging.
Security Threats. The majority of respondents ranked transaction fraud, data
breaches and identity theft as the highest threat to the security of payments
systems. Some banks are incorporating AI and biometrics to address these
concerns, but many are not.

Plans in Place
Thirteen percent of bankers said
they have a formalized payments
strategy. Of these, almost half
said their plan is organizationwide (46 percent), while the
remaining respondents said their
plan is business-line level. Fortysix percent said they do not have
a strategy but have laid plans to
implement one.
When undertaking or prioritizing a
payments strategy, the bank's top
consideration-for both commercial
and consumer initiatives-is
customer retention and acquisition,
followed by cost reduction. The
majority of respondents said they
anticipate spending more over on
payments initiatives the next year
than they did in 2016. Three in
10 said they've partnered with a
fintech company to implement
payments solutions.
ANTICIPATED INVESTMENT SPENDING
No change from 2016 levels
Will likely decrease

Competition. Most banks said they are confident their bank will remain
competitive in both consumer and commercial payments as the landscape
evolves. But they say collective action may be required to meet existing and
potential challenges, particularly on fraud and real-time payments.

Plans exist

20%
17%
36

ABA BANKING JOURNAL | SEPTEMBER/OCTOBER 2017

Consumer payments services

Already doing it

Incorporate biometric authentication such as
fingerprint, voice, iris/retinal scan into your
payment business

63%

Will likely increase more than 5%

30%

2%

POTENTIAL STEPS TO ADDRESS PAYMENTS SECURITY ISSUES
No plans exist

Will likely increase between 1-5%

13%

Use artificial intelligence technology (AI)
for fraud prevention/detection

22%
27%

51%

55%

Commercial payments services

2%

26%
23%

49%


http://www.aba.com

Table of Contents for the Digital Edition of ABA Banking Journal - September/October 2017

CHAIRMAN’S VIEW
UPFRONT
PICTURE THIS
LEGAL BRIEFS
POWER UP PROFILE
THE TOP FINTECH TRENDS DRIVING THE NEXT DECADE
PLUG AND PLAY: FOUR WAYS TO LEVEL UP YOUR MOBILE BANKING APP
MAKING FRIENDS WITH FINTECH
LOOKING AT FINTECH THROUGH THE LEGISLATIVE LENS
LET’S TALK PAYMENTS
IS OUTSOURCING IT SECURITY RIGHT FOR YOUR BANK?
THE CECL RIPPLE EFFECT
FROM YOUNG AMERICANS TO ENTREPRENEURIAL CITIZENS
FINDING THE PERFECT NICHE
THREE ELEMENTS OF BANK LEADERSHIP
REAL ESTATE LENDING
ABA COMPLIANCE CENTER INBOX
WEALTH MANAGEMENT
FROM THE STATES
CORPORATE SOCIAL RESPONSIBILITY
INDEX OF ADVERTISERS
FROM THE VAULT
ABA Banking Journal - September/October 2017 - Intro
ABA Banking Journal - September/October 2017 - bellyband1
ABA Banking Journal - September/October 2017 - bellyband2
ABA Banking Journal - September/October 2017 - cover1
ABA Banking Journal - September/October 2017 - cover2
ABA Banking Journal - September/October 2017 - 3
ABA Banking Journal - September/October 2017 - 4
ABA Banking Journal - September/October 2017 - 5
ABA Banking Journal - September/October 2017 - 6
ABA Banking Journal - September/October 2017 - 7
ABA Banking Journal - September/October 2017 - CHAIRMAN’S VIEW
ABA Banking Journal - September/October 2017 - 9
ABA Banking Journal - September/October 2017 - 10
ABA Banking Journal - September/October 2017 - UPFRONT
ABA Banking Journal - September/October 2017 - 12
ABA Banking Journal - September/October 2017 - 13
ABA Banking Journal - September/October 2017 - 14
ABA Banking Journal - September/October 2017 - 15
ABA Banking Journal - September/October 2017 - PICTURE THIS
ABA Banking Journal - September/October 2017 - 17
ABA Banking Journal - September/October 2017 - LEGAL BRIEFS
ABA Banking Journal - September/October 2017 - 19
ABA Banking Journal - September/October 2017 - POWER UP PROFILE
ABA Banking Journal - September/October 2017 - 21
ABA Banking Journal - September/October 2017 - THE TOP FINTECH TRENDS DRIVING THE NEXT DECADE
ABA Banking Journal - September/October 2017 - 23
ABA Banking Journal - September/October 2017 - 24
ABA Banking Journal - September/October 2017 - 25
ABA Banking Journal - September/October 2017 - 26
ABA Banking Journal - September/October 2017 - 27
ABA Banking Journal - September/October 2017 - PLUG AND PLAY: FOUR WAYS TO LEVEL UP YOUR MOBILE BANKING APP
ABA Banking Journal - September/October 2017 - 29
ABA Banking Journal - September/October 2017 - 30
ABA Banking Journal - September/October 2017 - 31
ABA Banking Journal - September/October 2017 - MAKING FRIENDS WITH FINTECH
ABA Banking Journal - September/October 2017 - 33
ABA Banking Journal - September/October 2017 - LOOKING AT FINTECH THROUGH THE LEGISLATIVE LENS
ABA Banking Journal - September/October 2017 - 35
ABA Banking Journal - September/October 2017 - LET’S TALK PAYMENTS
ABA Banking Journal - September/October 2017 - 37
ABA Banking Journal - September/October 2017 - 38
ABA Banking Journal - September/October 2017 - IS OUTSOURCING IT SECURITY RIGHT FOR YOUR BANK?
ABA Banking Journal - September/October 2017 - THE CECL RIPPLE EFFECT
ABA Banking Journal - September/October 2017 - 41
ABA Banking Journal - September/October 2017 - 42
ABA Banking Journal - September/October 2017 - FROM YOUNG AMERICANS TO ENTREPRENEURIAL CITIZENS
ABA Banking Journal - September/October 2017 - 44
ABA Banking Journal - September/October 2017 - 45
ABA Banking Journal - September/October 2017 - 46
ABA Banking Journal - September/October 2017 - FINDING THE PERFECT NICHE
ABA Banking Journal - September/October 2017 - 48
ABA Banking Journal - September/October 2017 - 49
ABA Banking Journal - September/October 2017 - 50
ABA Banking Journal - September/October 2017 - THREE ELEMENTS OF BANK LEADERSHIP
ABA Banking Journal - September/October 2017 - 52
ABA Banking Journal - September/October 2017 - 53
ABA Banking Journal - September/October 2017 - REAL ESTATE LENDING
ABA Banking Journal - September/October 2017 - 55
ABA Banking Journal - September/October 2017 - 56
ABA Banking Journal - September/October 2017 - 57
ABA Banking Journal - September/October 2017 - 58
ABA Banking Journal - September/October 2017 - 59
ABA Banking Journal - September/October 2017 - ABA COMPLIANCE CENTER INBOX
ABA Banking Journal - September/October 2017 - 61
ABA Banking Journal - September/October 2017 - WEALTH MANAGEMENT
ABA Banking Journal - September/October 2017 - FROM THE STATES
ABA Banking Journal - September/October 2017 - CORPORATE SOCIAL RESPONSIBILITY
ABA Banking Journal - September/October 2017 - INDEX OF ADVERTISERS
ABA Banking Journal - September/October 2017 - FROM THE VAULT
ABA Banking Journal - September/October 2017 - cover3
ABA Banking Journal - September/October 2017 - cover4
ABA Banking Journal - September/October 2017 - outsert1
ABA Banking Journal - September/October 2017 - outsert2
ABA Banking Journal - September/October 2017 - outsert3
ABA Banking Journal - September/October 2017 - outsert4
ABA Banking Journal - September/October 2017 - outsert5
ABA Banking Journal - September/October 2017 - outsert6
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