Developing A Payments Strategy Part II: The Nitty Gritty

Getting started is the most difficult part of any undertaking, but if you’ve been able to accomplish most of the steps I outlined in my last post, the really challenging work in developing your community bank’s payments strategy is done.

Your next step is to identify any and all corporate strategies at your bank that are payments related. Examples could be your bank’s delivery channels or perhaps a goal of increasing non-interest revenue. Next, you’ll want to concentrate on strategic areas of focus such as integration, improving client interaction and/or user experience. I always tell ICBA Bancard clients to: 

• Think digital first;
• Emphasize relationship/service;
• Focus on security;
• Evaluate multi-channel capabilities; and
• Pick the right vendors with open architecture for API solutions.

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.  



For a more complex or rapidly evolving product like mobile, you can use a chart like the one below to track and evaluate opportunities against your bank’s key metrics. In the example below, mobile wallet opportunities are examined and measured against pre-determined criteria such as:

• Is this product relevant to our clients? Remember, your clients today may not be your target clients in the future.(Competitive Differentiator/Table Stakes)
• Will it increase our revenue or reduce our expenses? (Table Stakes/Quick Hits)
• What resources including cost and time will be needed for implementation? (Quick Hits)
• How is marketplace adoption? (Black Hole/Shooting Star/Competitive Differentiator)
• How will the product/service integrate with our existing offerings and what will the customer experience look like? (Competitive Differentiator/Quick Hits)

Your bank’s payments strategy should be thought of as a dynamic blueprint that is always evolving. This isn’t a one-and-done proposition and there is no one-size-fits-all plan that is perfect for every community bank. As consumer behavior and technology continues to change, community banks must be flexible enough to respond.