Core providers, not banks, should be ‘ready’ for FedNow
The years of anticipation surrounding the development and adoption of Federal Reserve instant payment service FedNow is a case of much ado about nothing at the bank level.
The years of anticipation surrounding the development and adoption of Federal Reserve instant payment service FedNow is a case of much ado about nothing at the bank level.
Although industry experts have wondered what the upcoming adoption of FedNow will look like at financial institutions — especially community banks and credit unions —the onus will be on core providers to adapt and provide, Vinay Prabhakar, vice president of global marketing at Volante, tells Bank Automation News in this episode of “The Buzz” podcast.
“When it comes to FedNow, or indeed, any new payment type, there are few separate factors that play into readiness,” Prabhakar says. “Community banks and credit unions are often dependent on their core providers. It's not a question of them being ready FedNow. It's a question of their core provider being ready for FedNow.”
Not all core providers are equal; while some have fully embraced real-time payment (RTP) rails, others are still where they were when RTP was first launched in 2017, Prabhakar says. Larger banks that have already enabled enterprisewide payments automation have less to worry about.
“If a bank has already invested in real-time payments modernization, already connected to RTP, they've already 24/7 enabled their operation, and have familiarity of how to deal with ISO 2002 messages, then I think those banks will find it quite straightforward to go live with FedNow on Day One.
Listen as Prabhakar talks FedNow readiness at financial institutions, along with possible hesitancy from large corporates to embrace large-value RTP.
Although industry experts have wondered what the upcoming adoption of FedNow will look like at financial institutions — especially community banks and credit unions —the onus will be on core providers to adapt and provide, Vinay Prabhakar, vice president of global marketing at Volante, tells Bank Automation News in this episode of “The Buzz” podcast.
“When it comes to FedNow, or indeed, any new payment type, there are few separate factors that play into readiness,” Prabhakar says. “Community banks and credit unions are often dependent on their core providers. It's not a question of them being ready FedNow. It's a question of their core provider being ready for FedNow.”
Not all core providers are equal; while some have fully embraced real-time payment (RTP) rails, others are still where they were when RTP was first launched in 2017, Prabhakar says. Larger banks that have already enabled enterprisewide payments automation have less to worry about.
“If a bank has already invested in real-time payments modernization, already connected to RTP, they've already 24/7 enabled their operation, and have familiarity of how to deal with ISO 2002 messages, then I think those banks will find it quite straightforward to go live with FedNow on Day One.
Listen as Prabhakar talks FedNow readiness at financial institutions, along with possible hesitancy from large corporates to embrace large-value RTP.