In Q1 2024, NEACH sat down with major third-party providers to gain insights into what’s happening with payments. Matt Wilcox, President of Digital Payment Solutions for Fiserv, and Dudley White, President of Core Account Processing Solutions for Fiserv, shared their thoughts on how payments are shifting and what to expect in the coming months. What follows is a summary of our conversation.
NEACH: What do you see as the next big shift in payments that banks and credit unions need to consider? Why?
Wilcox: The first would be real-time payments. Financial institutions have to consider how to connect, when to connect, which networks to connect to, and which applications to use, as well as which applications and use cases are going to be critical and which ones are gaining volume. The integration of payments is another critical consideration, with financial institutions starting to, or at least thinking about how to bring a transfer experience and P2P experience together, and how to fold bill pay into that. We also see financial institutions looking to make card payments part of non-card-payment applications. And then there is a really big emphasis being placed on serving small businesses. So, I think having a real-time strategy, a small business strategy, and bringing various payments experiences together are the three things financial institutions should focus on.
NEACH: With so much talk about data and AI, are/how these technologies playing into your plans for supporting banks and credit unions? Why?
White: Conversational AI has been in place for a while. There are capabilities, especially within the client services arena, that have been leveraging conversational AI for years now. And as the technology improves, I think the next big leap for AI and its impact on banks is going to be more generative AI capabilities that can help within the back office as well as from an efficiency standpoint. I don’t think we’re at a point where we’re going to get to predictive AI right now from a banking standpoint. But I do think from a generative AI perspective, they’ll be some applicability for fraud use cases.
NEACH: FI’s customers/members have increasing expectations in today’s evolving industry. How are these expectations driving FI strategies?
White: I think everything is related to the experience of being always on and available. So, in the new digital age, the expectation of being able to access any of your platforms and receive the same data experience, whether it’s through the branch, online, or even through a third party, is table stakes. We continue to evolve in this space because we know digitally engaged customers are the most profitable customers for banks and providing digital capabilities and innovations is key to helping our clients meet and exceed their customers’ expectations.
NEACH: As a core provider, how are you responding to those demands? How are your products and services changing to help FIs remain competitive?
White: The concept of cloud native, cloud-based digital cores is a big part of how we’re meeting the need for speed, innovation, and new products. We are looking across our portfolio of existing cores and new cloud native solutions and examining how we take advantage of cloud platforms and technology to innovate faster. This work includes investing in fraud detection and protection capabilities as we know there is huge potential in this area.
NEACH: FedNow® and RTP® are both live. How are you helping your customers becoming receiving institutions? Sending?
Wilcox: Many of our financial institution clients are already connecting to these services, and we’re working on enabling more. We have a real-time network, the Now Network, that connects to both services, and we have a payment hub application called Enterprise Payment Platform that is connected to RTP. At this time, we’re encouraging banks and credit unions to participate in both FedNow and RTP, at a minimum on the receive side, because the two networks are not interoperable.
NEACH: To that point, what is the FedNow and RTP onboarding experience like for FIs? What are you hearing from your early adopters?
Wilcox: For those institutions that already have a real-time connection through our Now Network, it’s not an overly burdensome implementation. We encourage institutions planning to receive to go ahead and enable send at the same time. Think about a car. If you’ve got the hood up and you’re changing the oil, you might as well change the brake fluid and the windshield washer fluid as well. If the financial institution doesn’t already have a real-time connection in place, the implementation will take time to plan and execute but it is well worth it. -. For those with the infrastructure in place, it’s really sort of an add-on.
NEACH: What use cases are you seeing for instant and faster payments today?
Wilcox: Transfers, disbursements, and commercial payments are the top use cases. I think the one area that doesn’t get talked about enough, and I do think it will play a role for small businesses, is the account payables and account receivables experience. If we can get the bank or credit union where these small businesses have their accounts to receive real-time payments, we can enable small businesses to receive funds via those networks. It’s a win-win.
NEACH: FI/FinTech partnerships are becoming table stakes. How do you support your banks and credit unions in engaging with FinTechs?
White: We have curated relationships with hundreds of FinTechs, which helps from an integration perspective. Currently, we offer a multi-sided platform within the greater FinTech ecosystem that allows the FI and the FinTech to find each other, collaborate and innovate based on their goals and offering. And through our tool called Communicator Open, we publish our core APIs and other APIs that we have across critical payments or digital or data solutions to allow banks to integrate very quickly with our core solutions as well as our curated relationships with FinTechs.
NEACH: What innovations should FIs expect from their core, and what innovations do you think your customers would be surprised by?
Wilcox: We have an integrated payables and receivables platform that we’re building that we expect to launch in the second quarter. It will do a lot of the things we talked about from a small business perspective. At Money 2020 last year, we announced a product called Cashflow Central. We’re working to create the best user flows by leveraging our real-time connectivity, our payables technology, our routing logic, and our biller data and bringing that together in an intuitive way for small businesses to easily navigate . We will also incorporate FedNow and RTP as well as the management of subscriptions, essentially bringing together any sort of payment activity into one place in the digital environment.
NEACH: What else would you like to add?
Wilcox: The only thing I would add is related to the pending CFPB 1033 regulation. We believe with the new regulation that banks and credit unions will be required to allow and give access to their customers or members to grant or revoke access to their actual banking data. For example, if you use Venmo, and you share your bank data with Venmo, your bank will need to show you that your data is being shared with Venmo to power their app. Financial institutions should be thinking about how they will comply with this forthcoming regulation.
Matt Wilcox, President of Digital Payment Solutions for Fiserv
As President of Digital Payments at Fiserv, Matt Wilcox is responsible for turnkey services for a multitude of Fiserv product lines while also focusing on creating high-growth digital experiences in the real-time payment solutions marketplace. Wilcox oversees collaboration opportunities within the financial services industry, helping to build digital and payment strategies and product innovations that drive revenue, client retention and new client acquisition.
Dudley White, President of Core Account Processing Solutions for Fiserv
Dudley White leads the Core Banking and Integrated Solutions organization and is responsible for Product Management and Strategy for several Core Processing Platforms, as well as several critical surrounds, including Reconciliation, Financial Accounting, and Enterprise Content Management. He previously served as Payments General Manager, responsible for processing of multiple payment types and clearing schemes, including ACH, wire and instant, such as SEPA Instant Credit Transfer (SCT Inst) and The Clearing House (TCH) real-time payments, across the U.S., Europe, the Middle East, Africa and Asia-Pacific.