With the Federal Reserve recently announcing the finalization of a rule to govern transfers over its impending FedNow service, financial institutions have been reminded once again that the central bank’s entry into the real-time payments space is just around the corner.
FedNow is set to go live in 2023, and to prepare financial institutions for its launch, Volante has published a white paper fusing industry knowledge with research from Aite-Novarica Group, detailing everything from the system’s features, use cases, and business strategies. In part two of this blog serires, we’ll look at what the FedNow launch could indicate for financial institutions and the rapidly evolving payments landscape.
In addition to providing an overview of the FedNow system’s capabilities, another primary purpose of our white paper was to inform financial institutions of potential impacts on the payments landscape, as well as how they should respond.
The appropriate course of action will depend almost entirely on your current level of engagement with real-time capabilities and platforms. Institutions that have been slower to adopt real-time payments now find themselves at a crossroads, as many of the technological hurdles to adoption are being overcome, and FedNow’s launch is likely to make implementation efforts even more critical.
The good news is that technology solutions offered by third-party vendors are becoming increasingly sophisticated and flexible to an institution’s needs. Those who may have fallen behind now have multiple options for entering the space, and without the need to wait on their core providers.
Overall, what we have been seeing is a widespread shift in demand and a new emphasis on payment efficiency and customer experience. As barriers to entry continue to ease, institutions should view the launch of FedNow as an opportunity to adapt strategically to a rapidly evolving payments landscape, and to enhance their real-time capabilities sooner rather than later.
To learn more about how your institution can prepare for the launch of FedNow, click here to download the full white paper.