Hoosier Banker 43 Bankers’ Bank, Madison, Wisconsin, is an approved funding agent of FedNow, as well as a funding agent solution for The Clearing House RTP. 1 Strategies for Improving the U.S. Payment System: fedpaymentsimprovement.org/wp-content/uploads/ strategies-improving-us-payment-system.pdf 2 Faster Payments Task Force: fasterpaymentstaskforce. org/wp-content/uploads/fptf-executive-summary.pdf 3 RTP Network: theclearinghouse.org/payment-systems/ rtp/institution#:~:text=The%20RTP%20network%2C%20 the%20real,reaches%2056%25%20of%20U.S.%20DDAs 4 FedNow: frbservices.org/financial-services/fednow/ index.html 5 The Fed’s services site: frbservices.org/financialservices/fednow/about.html#design institutions plan to outsource responsibility for this to funding agents, which provide liquidity management in the joint accounts on behalf of their respondent customers. U.S. payments modernization has reached the end of the beginning, and realized solutions with real customer benefit will now become the focus. Participation in RTP is expected to grow significantly in the coming years. When it arrives, FedNow’s first transactions will take place in an environment where RTP has already achieved a sizable lead. As part of developing their payments strategies, every community financial institution will need to decide when and how to get involved in instant payments. Many are already live, or are working with core processors to connect to RTP and eventually to have full functionality on that rail, including both send and receive capabilities. Why should your payment solutions be any different? bankersbank.com Customers expect their community banks to be as fast as the industry leaders. Let your back end fly with Faster Payment Settlement Solutions from Bankers’ Bank. – Seamless delivery of bank funds to and from RTP network joint account – Reconcilement reporting and advices to ease daily balancing – Fund-level monitoring and recommendations The scale and scope of the RTP Network means that denying access to it carries the risk of dissatisfied customers. While there may not be a push for instant payments in all customer segments today, this could change as their benefits become more widely known. Despite this, some financial institutions have decided to wait for the implementation of FedNow. Others plan to implement RTP now and possibly FedNow when it arrives. Still others may be assessing the value of offering instant payments at all. Every financial institution will have its own approach, but RTP and FedNow will one day coexist, and they will not be fully integrated immediately, if ever. Making thoughtful choices regarding an instant payments strategy deserves time and attention, as decisions made now will have significant customer impact for years to
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