Independent Banker - May 2019 - 17

the bank isn't involved in that, at least not the
way the bank would like to be involved. "
From p2p solutions to faster payments, the
industry is facing a new paradigm. As community
banks align themselves with the evolving needs of
their customers, a payments strategy can help to
illuminate the road ahead.
Driving the vision
As payments heat up, advice trickles in from all
facets of the industry, and community banks can
be inundated with cries for a faster payments
strategy, a digital strategy and a fintech strategy,
to name just a few. How can a community bank
align all of these disparate components in a way
that creates a cohesive approach? Experts say the
answer lies in the institution's strategic plan.
" Once a bank has their corporate strategy as
an organization, their digital payments strategy
really should complement what their objectives
are, " says Tina Giorgio, president and CEO of
ICBA Bancard. " When you talk about target segments,
when you talk about different solutions to
take to market, all of those become components
of that strategy as opposed to separate and independent
initiatives. "
Think of the digital payments strategy as a
supporting gear that advances the organization's
strategic plan. The bank's core strategy points in
the direction of the finish line, but the payments
strategy fuels the engine and propels it forward.
In short, having a payments strategy that feeds
into the strategic plan expedites its execution.
" Payments need to be part of your strategic
planning, " says John Buhrmaster, president and
CEO of $475 million-asset 1st National Bank of
Scotia in Scotia, N.Y. " Payments are a part of a
bank's DNA, and without it being part of your
strategy, you're forgetting about one of the key
components of why you are a bank. "
Powering the payments strategy
Recognizing how the payments strategy supports
the corporate plan is important, but how do you
ensure that connection plays out?
First, the corporate strategic plan acts as a
guide. This resource, already developed by an
institution's leadership and board, serves as due
north as a digital payments strategy is formed.
The same environmental elements, bank goals,
existing customer base and target customers all
factor into how digital payments support a bank's
strategy. Starting with these elements and vetting
digital payments solutions through that lens will
enable the bank to remain focused on its mission.
For example, 1st National Bank of Scotia
establishes building blocks in its corporate strategy.
These blocks serve as the tenets that support
its customer base and mission as an organization.
Objectives like delivering excellent customer
" I think the most
important thing is
coming up with a
strategy that's realistic
and putting together
a roadmap. "
-Tina Giorgio, ICBA Bancard
service or offering speed and efficiency help it
establish where payments fit into the mix.
" Your payments strategy is very intertwined
with your bank's strategy, so knowing who you
are is really important, " Buhrmaster says. " You
don't use technology to become something that's
out of your character. You use it to enhance your
core strengths. "
Quick stat
$14.2B
in funding was
invested in
U.S. fintech
companies in the
first half of 2018
Source: KPMG
But what if a bank has a corporate strategic
plan that's lacking an emphasis on payments?
How does it retroactively fit one in?
It's not a dissimilar approach. A bank evaluates
how payments support established objectives
and creates a digital payments strategy that bolsters
the work outlined in the strategic plan. The
bank may also want to evaluate its data to better
understand its customers' behaviors and how
those affect digital payments. And the financial
institution may recognize there's no need to race
forward at full throttle. Banks can take an incremental
approach to easing their digital payments
strategy into their organizational efforts.
" When I put together a strategy, the main thing
I focus on is what would I consider table stakes:
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Independent Banker - May 2019

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