The Technology Take

In today’s banking environment, technology is the key to staying relevant. We must continue to evolve our relationship-first model with high-tech solutions that address immediacy, security, simplification, and more—the payments attributes our customers demand.

Fortunately, we have new tools to support that growth like FedNow. ICBA and ICBA Payments have been involved with the plans for this instant payments service for more than a decade. In fact, I remember being at an ICBA Leadership Meeting in October 2019, and having a celebratory toast over the Federal Reserve’s decision to build an instant payments rail and our efforts in making it happen.

Ruth Christopher is ICBA Payments’ chairman and is a board member for Citizens Bank., a community bank in Las Cruces, N.M., and secretary of its holding company, Amador Bancshares Inc.

Fast forward to 2023, and my bank jumped at the chance to become a FedNow early adopter, though we didn’t view it so much as a leap, but more as a natural evolution. As banks, we gather deposits and make loans, and if our deposit base is stressed because we don’t offer competitive, instant solutions, it affects our ability to attract those deposits. Knowing that instant payments will become table stakes, we chose to look to the future and get on board.

We launched our first instant payment test in August 2023, and by mid-December, we were receiving transactions from Etsy, Vola, Robin Hood, Plaid, Homebase, and more. While the volumes aren’t yet high, we believe participating as a receiver sets us up for the future, and we plan to offer send functionality as early as Q4 of this year: We’re just waiting for our provider to be ready with a real-time fraud solution to complement the payments.

Beyond instant payments, community banks also need to seek solutions that help them compete. Take my bank, for example, and the decision to expand into some larger markets. We knew the move would require us to level up our business technology offerings. So, we launched a new treasury management platform. Our goal is to strengthen our current business relationships with robust treasury management tools and attract new customers and additional revenue. Having the right technology is the key to that strategy.

So, as you consider what’s next for payments at your bank, think about how you can better meet emerging needs. What solutions are your customers looking for, and how can you address them sooner than later? And don’t forget to leverage the resources available through ICBA Payments to help uncover what’s next for your technology stack. That’s the kind of support your customers are sure to thank you for as they reap the benefits of a high-tech, high-touch relationship.