Why Your Payments Strategy is the Key to Your Digital Future

It can also serve as a guidepost to help you identify, implement, and roll out the right products and solutions at the right time to support your community bank’s digital future and ensure you continue to meet the needs of your customers today – and into the future.

With a well-developed and executed digital payments strategy, community banks can: Improve the customer experience with a more user-friendly and digital interface; Enhance a bank’s reputation and retain and grow their customer base; and, Increase revenue and profitability with digital products and services and facilitate innovation. According to the MIT Center for Digital Business, companies that have embraced digital transformation are 26 percent more profitable than their average industry competitors.

Getting Started

But getting started with a digital payments strategy is not always easy, nor is it something that every bank is positioned to do right away. ICBA Bancard offers a Digital Payments Strategy Guide to help community banks develop or evolve their digital payment strategies.

Through a series of questions designed to help assess a bank’s current product lineup, market base, and existing digital payments offerings, banks can build on their existing foundation to create a responsive digital payments strategy.

It’s also important for community banks to foster an environment where innovation is encouraged by:

Consulting with their core providers for information on the latest technology; Seeking out resources such as the ICBA ThinkTECH Accelerator, which identifies and supports community-based fintechs solutions; or Conducting their research, evaluation, and reporting on the latest products and technology to support goals and objectives.

Payments innovation is all around us, creating a new norm for our industry. Understanding and planning for the role innovations can play in supporting this new-age payments infrastructure. By keeping the door open to innovation, you can set your institution up for success.

Tina Giorgio is President and CEO of ICBA Bancard, the payments subsidiary of the Independent Community Bankers of America.

Payment Innovation Landscape

Today, community banks can choose from a multitude of innovative options, including Same Day ACH, The Clearing House’s RTP system, and soon, FedNow. And they can use products and platforms that leverage these systems, such as Ondot, ExcheQ, linked2pay, and PayFi, to enable faster and real-time payments for their customers.

Mobile wallet and contactless payment advances are also advancing. While only 8 percent of consumers use Apple Pay weekly, and 6 percent use Samsung Pay, by the end of this year, consumers will have spent $142 billion via mobile payments. And as many as 20 percent of those consumers will be using digital wallets on their smartphone.

If it’s not the mobile wallet, the preferred payment option could very well be a tap of the card. While just 3 percent of cards in the U.S. are currently contactless, compared to 64 percent in the U.K. and upwards of 96 percent in South Korea, the more secure technology is picking up steam in the United States.