Independent Banker - March 2023 - 22

PORTFOLIO
FedNow resources
from ICBA
Community bankers
benefit from education
tailored directly to their
needs, so ICBA has
developed customized
education to complement
available resources.
For example, ICBA
Bancard ran a fivepart
webinar series
called Ramping Up for
the FedNow Launch,
which includes the
following sessions:
1. Delay No More: Creating
Your FedNow Plan
2. FedNow Features,
A Deep Dive
3. Lessons Learned from
Community Banks
Implementing Instant
Payments
4. Preparing for 2023 and
Q&A with a Fed Expert
5. Exploring Instant
Payments Use Cases
ICBA is planning more
events as the FedNow golive
date nears.
" We're looking to put
together a robust 2023, and
it's going to be dynamic, "
says Kari Mitchum, ICBA's
vice president of payments
policy. " So, as we get closer
to launch, make sure you're
always reading NewsWatch
Today. We're going to make
sure there are frequent
webinars and lots of
education out there. "
" I think FedNow is going to transform the
way that we do business, and the way that
businesses operate in the future. "
-SHERRI REAGIN, NORTH SALEM STATE BANK
will play a crucial role in
implementation from the
core system to downstream
customer-facing applications.
Community banks will need to
decide their required functionality
in receive-only or a send-andreceive
scenarios and work with
their providers accordingly. For
most, that process starts with
talking to their cores.
" My advice: Build a plan,
understand what partners must
be involved and do a lot of
exploring with vendors, " says
Debra Matthews, chief of deposit
operations at $2.1 billion-asset
Texas First Bank in Texas City,
Texas, a FedNow pilot participant.
" Explore what your core has
available and plans to do in the
future and determine if any
additional third parties are needed
for implementation. "
Reagin agrees, emphasizing
the enhanced role that core
providers will play to accommodate
FedNow. " Everything we do, all
the fintechs that we use-if you're
going to settle a payment, it has
to go through your core provider
to get through your system, " she
says. " So, they're going to have
to be involved, regardless of who
you use to interface between
the Federal Reserve and your
financial institution. "
Instant payments will soon
be table stakes
While the FedNow Service will
launch in just a few months, the
wide-scale rollout will take some
time, and customer adoption will
follow suit. However, if market
history bears any indication, instant
payments will be a critical part of
payment processes in the future.
" Keep in mind Apple Pay has been
out for almost 14 years, and QR
codes were created in 1994. FedNow
coming out is not going to be some
overnight change, " Mitchum says.
" There's that story from [FedEx
founder] Fred Smith that he had
the idea for FedEx in the 1960s, and
the paper got a 'C' on it. They said,
'Nobody wants stuff next day; there's
no need for this.'
" Now we're in the time of Amazon
same-day delivery, two-hour
delivery. But that doesn't mean that
we got rid of USPS. It doesn't mean
we got rid of two-day shipping.
There are multiple choices for
moving goods; there's going to be
multiple choices for moving money. "
But with the rate of change
in today's digital space and
this immediate gratification
environment, it won't take long
for demand for instant payments
to accelerate.
Use cases like early wage access,
P2P payments and insurance
22 // ICBA Independent Banker // March 2023
Independent Banker - March 2023

Table of Contents for the Digital Edition of Independent Banker - March 2023
