Independent Banker - January 2024 - 32

PORTFOLIO CHECKS & BALANCES
Why you should
adopt FedNow now
FedNow is here, providing community banks with the opportunity
to better serve their customers and push the financial services
industry forward. By Scott Anchin
fter years of ICBA advocacy
and collaboration, the Federal
Reserve launched its instant payment
service, FedNow Service, in July.
This hard-fought development is a
significant opportunity for community
banks. As community banks strategize
how to evolve their products and
solutions to keep up with customer
needs, access to a new payment
system with instant clearing and
settlement and requests for payment
cannot be underestimated.
From a monetary policy
perspective, safe, secure and efficient
real-time payments negate the
need for a U.S. central bank digital
currency (CBDC). A CBDC is a digital
representation of a national currency.
Instead of printing money, the
central bank issues electronic coins,
which are cash equivalents backed
up with reserves and deposits. ICBA
has staunchly opposed the creation
of a CBDC, concerned that the new
currency would disintermediate
community bank deposits and have a
devastating impact on lending. Largescale
community bank adoption of the
FedNow Service adds further heft to
this argument.
Future-proofing community banks
At the individual community bank
level, FedNow Service will help
future-proof community banks.
Thinking strategically about
what customers need and want and
connecting them to the capabilities
of instant payments opens the door
to countless possibilities that help
customers while strengthening
community banks. Examples include:
ƒ Earned-wage access. Earnedwage
access refers to the ability
of employers to pay employees on
a real-time basis, whether that's
daily, weekly, biweekly or as money
is earned. Many employees live
paycheck to paycheck. Employers
A
32 // ICBA Independent Banker // January 2024
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Independent Banker - January 2024

Table of Contents for the Digital Edition of Independent Banker - January 2024

Contents
Independent Banker - January 2024 - Cover1
Independent Banker - January 2024 - Cover2
Independent Banker - January 2024 - Contents
Independent Banker - January 2024 - 2
Independent Banker - January 2024 - 3
Independent Banker - January 2024 - 4
Independent Banker - January 2024 - 5
Independent Banker - January 2024 - 6
Independent Banker - January 2024 - 7
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Independent Banker - January 2024 - 35
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Independent Banker - January 2024 - 37
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Independent Banker - January 2024 - Cover3
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