TINA'S TAKE BLOG

In 2020, nearly 18 million Americans were defrauded via digital wallets and person-to-person (P2P) services, according to Javelin Strategy & Research. With numbers like that, P2P solutions like Zelle have come under fire, and issues are escalating.

When it comes to payments, the generational divide has been shrinking. While Gen Z and Millennials still lead the way in digital payments adoption, Baby Boomers and Seniors (over 76) are increasing their digital payments prowess.

When it comes to community bankers’ technology to-do lists, 35% view investing in digitalization as their top business opportunity. We’ve clearly arrived at a tipping point where community bankers are not just talking about the digital experience, they are incorporating it into actionable plans.

According to the Federal Reserve, nine in 10 businesses (or 29.25 million) expect to be able to send and receive instant payments by 2023. Fortunately, in many cases, community-based financial institutions have begun the process to meet these needs.

The pandemic has clearly had a lasting impact on customers’ payment behaviors, marked by an unprecedented rise in ecommerce transactions, projected to reach $8.3 trillion by 2025. Amidst this sea of change, community banks are asking, “What does this shift mean for my payments strategy?”

In less than two months, the International Standards Organization (ISO) standards update for 8-digit Bank Identification Numbers, or BINs, takes effect. This new standard means that card processors must be able to accommodate and manage transactions using 8-digit BINs.

The average person spends nearly two and a half hours on social media per day, so it’s no wonder social payments have started to infiltrate the financial services industry.

The average person spends nearly two and a half hours on social media per day, so it’s no wonder social payments have started to infiltrate the financial services industry.

With the eldest members of Gen Z clocking in at age 24, they represent a market ripe for targeting with banking services. But what they are looking for differs from what Millennials and Gen X required of community banks at the same age.

Have you ever been ready to jump into your next meeting only to notice you didn’t have your mobile phone? If so, I’m betting you felt a sense of panic that only subsided once your phone was back in hand.Because without it, you’d lost your lifeline.

A semiconductor chip shortage has emerged as a real challenge for banks. Industries from automobile manufacturing to consumer electronics have been reporting issues for months, and now the effects have spread to the payments industry.

Here's part two of a continuing conversation on faster payments, diving into Same Day ACH, competition, fraud, and strategic vision.

Faster payments have arrived. Accelerated by the pandemic, the growth in digital and contactless payments has pushed consumer and business expectations toward the real-time movement of money.

Buy now, pay later or BNPL, is the latest cautionary payments tale for community banks. Much like digital wallets, its appeal—with instant gratification and integrated payment at checkout—has taken hold with Gen Z and millennials.

Recently, ICBA Bancard, in partnership with TCM Bank, released the white paper, “Cultivating the Strategic Value of Credit Card Rewards Programs. ICBA Bancard President & CEO Tina Giorgio continue her discussion with rewards expert Damon Moorer, president and CEO of TCM Bank, about rewards programs.

Having the right rewards program to match your existing and targeted cardholder customer base is more important than ever. That’s why ICBA Bancard, in partnership with TCM Bank recently released, “Cultivating the Strategic Value of Credit Card Rewards Programs,.

Last month Google unveiled its new Google Pay app—complete with a DDA-like account attached. This latest effort by Google is part of a trend of non-bank tech companies wading into payments territory.

For community banks, the digital-first nature of today’s world creates an opportunity to forge deeper connections with existing customers, while attracting new customers

From having to adapt to retail closings, diminished staff and customer capacities, a new work-from-home infrastructure, and more, the nation’s small businesses have reacted quickly in the wake of the pandemic.

Catching synthetic identity fraudsters remains difficult, and the fall-out of not detecting it, is substantial. AI company Coalesce estimates that synthetic identities account for more than 20 percent of losses in a loan portfolio, and for credit, they average 4.6 times the typical loss.

Back in 1985, the first Macintosh computer debuted, and by today’s standards, it was a boxy, clunky, slow unit, yet Consumer Reports gave it a glowing review and cited the mouse and use of icons as technological breakthroughs. This demonstrates a key point: 35 years is a long time when we consider the rate of technological change.

In celebration of ICBA Bancard’s 35th anniversary, I sat down with our Chairman Greg Deckard, president, CEO and chairman of State Bank Northwest to reflect on key milestones that have led to the organization’s success.

Despite numerous warnings from the FBI, IRS and others, fraudsters are capitalizing on the pandemic to take advantage of consumers, highlighting the importance of community banks in supporting their customers in their battle against this opportunistic fraud.

In determining what this new business-as-usual will look like for your bank, it is important to identify where your customers are now and how their financial needs may change so that you can anticipate and deliver on their future needs.

Community banks are the stars of the financial services industry, and during times of crisis community bankers burn brightly to provide a guiding light to their customers and community. ICBA Bancard knows that protecting your bank’s cardholders and customers is all part of the job.

When it comes to financial services, almost 63 percent of the U.S. population uses digital banking. So, as a community bank, if you are not employing—or at least considering—a digital-first strategy for your customers, you should be.

In banking, one thing is for certain – and that is change. With the advent of new technologies and solutions, education will be the indispensable complement to ensure community banks can take advantage of the opportunity these changes afford.

First-party fraud and synthetic identity fraud is an area of growing concern, exacerbated by difficulties of identifying these attacks, but there are ways the industry is fighting back.

ICBA Bancard President and CEO Tina Giorgio reflects on her experiences as a mentor in the ICBA ThinkTECH Accelerator program.

The Federal Reserve’s development of the FedNow Service provides the opportunity for all banks—both large and small—to capitalize on the value of faster payments and brings significant benefit to community banks and the businesses and consumers they serve.

Tina Giorgio: Whether I’m working with banking professionals or with entrepreneurs in the fintech space, I have one key piece of advice: I ask, “What is your why?” and encourage them to focus on that response. Because, when they home in on that, everything else falls into place.

Tina Giorgio: There are many factors involved in creating a successful real-time payment system and one of those factors is education. This month I have invited Steve Ledford from The Clearing House to share some information about real-time payments and to provide an FAQ about the RTP® network. Steve is the senior vice president of products and strategy at The Clearing House.

Tina Giorgio: In an e-book published last week by PYMNTS.com, “Fresh” is how I described payments in 2018. I can’t think of a time when we’ve seen as many innovations emerge in this industry than the past 11 months.

Tina Giorgio: Vince Lombardi had it right when he stated that, “Leaders aren’t born, they are made.” Leadership is a process. And, like any process it begins by envisioning a desired outcome and creating a framework of the steps to achieve that outcome. Sometimes there are real obstacles that prevent us from achieving our goals. By conducting a personal evaluation, we can often identify and address things that are standing in our way.

Tina Giorgio: Contactless transactions include everything from flashing your watch at the point-of-sale to paying for your groceries, via your refrigerator. As “smart” devices get even smarter and more prevalent, payment has become part of their foundational fabric.

Tina Giorgio: With so many possible applications, it’s hard to predict the path that artificial intelligence will follow. In her latest blog post, ICBA Bancard President and CEO Tina Giorgio examines present-day use cases to see where things are heading.

Tina Giorgio: The opportunities presented by financial technology are ripe for the picking but sorting through them all to find the solution that delivers the most value for your bank and your customers can be challenging.

Tina Giorgio: With threats continuing to emerge, I sat down with ICBA’s cyber expert, Jeremy Dalpiaz, assistant vice president of cyber and data security policy, to discuss what community banks can do to thwart cyberattacks. Our conversation uncovered three important tips for banks in navigating today’s cyber landscape.

Tina Giorgio: There’s something about the start of a new year that breeds optimism and fresh perspective. Challenges give way to opportunities, and obstacles become puzzles to solve. That positive tenacity intensifies for me as I look at 2018, a year in banking like no other. From the digital revolution to the role of fintechs, a new day has dawned, and in its light, we see the sprouting progression of community banking.

Tina Giorgio: When I gaze back on my career, I see peaks and the valleys; the times where I knew where I was headed and the times where I felt I was driving at night without headlights. In my role as a community banker, in particular, things seemed to accelerate with lightning speed. Sometimes, I was clairvoyant, reading that market crystal ball like a road map, and sometimes, well, let’s just say that we adapted.

Tina Giorgio: My goal is not only to ensure that community banks stay relevant when it comes to real-time payments but ensure that solution providers are delivering affordable, integrated solutions for community banks that are easy for them to deploy,

Tina Giorgio: While we wait for the details on the Equifax breach, we have found the community banks are taking the lead in protecting customer information.

Tina Giorgio: According to a new Price Waterhouse Cooper digital payments study, 46 percent of bank customers interact with their banks EXCLUSIVELY through digital channels (e.g., mobile, tablet and PC). This staggering trend away from traditional banking methods begs this important question: “What products and services is my bank delivering to customers living a digital life?”

Tina Giorgio: Faster payments is a drum you’ll frequently hear me beat and I have made it something of a personal mission, to ensure that the voices and concerns of community bankers are front and center as industry stakeholders work to improve the U.S. payments system.

Tina Giorgio: As we move into the NHL Stanley Cup Playoffs, and I move into a series of discussions on U.S. faster payments efforts, I am reminded of a quote from the great one, Wayne Gretzky. His now-famous quote has been used over and over—“Skate to where the puck is going, not where it has been.” When I think about faster payments, that couldn’t be more true.

Tina Giorgio: In my former role as a community banker, I always found it helpful to create visual aids to clarify complex relationships and concepts. In the example below, you can see how a bank’s payments strategy initiatives can be compartmentalized based on whether you are expanding an existing channel or innovating through new channels.

Tina Giorgio: In the six months that I’ve been president and CEO of ICBA Bancard, a recurring question I keep hearing from community bankers is, “How do I develop a payments strategy that will best position my financial institution for the future?” As a former community banker, I absolutely understand this concern.