Mid-year Checkpoint on Digital Payments Transformation

With over half of 2023 now firmly in the rearview mirror, we’re hoping community banks have put our digital payments transformation resources to good use—leveraging our whitepaper and workbook to refresh (or create) a digital payments strategy and accompanying roadmap.

We are also over halfway through ICBA Bancard’s webinar series on digital payments, and we’ve been thrilled with the strong banker engagement in each session. The series kicked off with commentary from industry expert, Patricia Hewitt of PG Research & Advisory Services, on the importance of digital payments. We then followed up with practical advice from Ryan Hildebrand at $1.8 billion-asset Lincoln Savings Bank who spoke about the role of culture, organizational alignment, and having the right skillsets and expertise on hand to position community banks for success.

And just recently, we had a fantastic session with Chad King from $3.8 billion-asset First State Community Bank, who shared how his bank leveraged the workbook to develop a payments strategy and refresh their roadmap. While Chad shared a host of best practices and lessons learned with the attending bankers, these two tips jumped out to me as particularly salient and worthy of repeating:

1. Take the time to ‘do it right’: With payments strategy and roadmap development, “it’s really hard to do it right, and you are going to get out of it what you put in.” Most banks have a lot of payment and customer data, and it takes significant time to organize, review, and draw conclusions. Those conclusions can be critical, though, in uncovering blind spots and ensuring you are on the right path.

2. Ensure digital payments priorities are well-aligned to bank strategies and customer needs: “Going through this process [the workbook] forced us to be honest about our organizational priorities and where we are spending our time.” Do your mission and vision statements connect with your strategic priorities? And are the payments products you are pursuing and spending time on well-aligned? A strategy refresh, if done right, can help drive tough decisions regarding what to stop, start, or continue pursuing.

Seeing the level of commitment required to follow First State’s lead, one of the bankers asked Chad for advice on convincing leadership that the related effort is time well spent. What a great question! And I would echo Chad’s counsel that leadership from the top is critical. Executive advocacy and engagement and support for the work from all corners of the bank are critical. Chad noted that by asking leadership thought provoking questions on digital payments and providing industry insights around what’s happening in the market, executives can be reminded of the value and need to invest in this area.

So, as 2023 progresses, I encourage community banks to spend time refreshing their digital payment strategy, and to take the time to ‘do it right’. It’s an investment that will undoubtedly yield a positive return.

I look forward to more robust discussions throughout our remaining webinar series. We’ll have the chance to speak with Kleberg Bank on how to prioritize payment products and solutions amidst an endless sea of possibilities, and we’ll finish with a deep dive on the intersection of instant payments and digital transformation. With the July launch of FedNow, the overlap of these two topics has never been more important and should be on everyone’s radar.

Best of luck with your digital payments planning efforts the rest of this year and let us know how we can help! You can access our resources and register for upcoming webinars at icba.org/digital-transformation. We’ve also made the webinars available as ‘on-demand’ recordings after their completion so you can revisit this content and share it widely with your team.