By Meagan Norlund, VP, Marketing & Communications, NEACH

As the industry well knows by now, the Federal Reserve anticipates that FedNowSM will be available sometime between May and July of this year, ahead of schedule and only a few short months away.  

While the accelerated timeframe may cause a bit of anxiety for financial institutions still considering FedNow implementation or preparing their systems and processes for the capability, it doesn’t have to. There are considerations and steps to contemplate and take to help ensure your institution is ready – at any time and stage – for your faster payments journey.

Don’t get comfortable

First, it is critical that financial institutions keep pushing the envelope toward faster payments solutions. The old adage of “it ain’t broke, don’t fix it” can no longer be a factor in dictating future direction. While existing payments systems still fulfill their functions and purposes and will continue to do so, new rails create solutions and opportunities that can position your organization for what’s to come.

And customer and member preferences are changing: According to recent Federal Reserve data, 70 percent of consumers indicate that having access to enhanced faster payment capabilities from their financial institution is an important satisfaction driver. Your customers and members want faster payment solutions. By looking beyond current offerings to new faster options like FedNow that meet customer demands, financial institutions can respond to today’s needs and continue to evolve as the industry progresses.

Take it slow

Once your financial institution is committed to embarking on the faster payments journey, you want to be sure you don’t bite off more than you can chew. Updating infrastructure, systems, and processes to send and receive instant payments can be a lot for an organization to take on all at once. That’s why a phased approach to FedNow implementation may offer a strong alternative. Pursuing a receive-only implementation to start offers financial institutions a streamlined and cost-effective way to ease into the world of real-time payments.

Even the Fed is pursuing its own phased approach to the release of the  FedNow Service. Its initial launch will include core clearing and settlement functionality and some key value-added features, such as a Request-for-Payment (RfP), and over time it will enhance features in subsequent releases to continue to meet industry needs. So, just as the Fed will, financial institutions can start with a strong foundation, and develop and expand instant payments offerings to include origination services and more to meet the evolving expectations and needs of customers and members.  

Keep learning

And as FedNow develops, it will be important for financial institutions to stay in the know. Faster payments are a rapidly evolving capability, so ensuring your financial institutions have the most up-to-date news, information, and resources will be key to making sure you can respond to advancements appropriately and in a timely fashion. To that end, the Federal Reserve’s FedNow Explorer site has a host of resources and educational materials to support readiness and adoption, as well as understanding of the latest developments.

Additionally, financial institutions can find information through their cores and other third-party providers. Like many of you, these organizations have been readying their systems for the rollout of FedNow to be able to best support your financial institution from the start. A phone call or meeting with your core to discuss your faster payments plans and inquire about their faster payments offerings and status, is an important part of your continued understanding and movement along your faster payments journey.

Finally, financial institutions can seek news, information, and support from their Payments Association. Payments Associations provide faster payments town halls, training, education, and resource materials specifically geared toward their financial institution members. In fact, in conjunction with Nacha and the U.S. Faster Payments Council, Payments Associations will be offering a Faster Payments Professional certification. Visit Center for Payments to connect with your Payments Association.

It’s mind-blowing that instant payments with FedNow are almost here. In as little as three months, we could be witnessing the launch of the latest instant payments network. And while three months might not seem like a lot (particularly given the magnitude of what some may need to accomplish as relates to FedNow implementation), there’s no need to sound the alarm. By being thoughtful and taking measured steps and actions, financial institutions can make sure they remain ready for wherever their faster payments journey takes them. 

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