In our busy digital world, we often forget the importance of being in a live setting and networking with others from the financial services community. In fact, the benefit you get from attending industry conferences might be just what you need to discover new ways to motivate your business and promote growth in your financial institution.

For an overview and definition of real-time payments, read the previously published blog titled ‘The Biggest Misconception of Real-Time Payments’.

There is no doubt that we live in a society which values time. Innovative companies are cropping up every day to help us do things faster.

Financial services consumers are demanding not only speed, but convenience, automation, reliability, and transparency among transactions in addition to real-time funds availability. In addition to consumer expectations, drivers of this faster payment movement include technology innovation, new players and business models, business expectations, enhanced safety and soundness, and globalization and regulatory pressure. As we evaluate those drivers, many industry experts believe that financial service providers will begin to see benefits from functionality that leverages faster payments. 

Earlier this year, one of the smartest bankers I know suddenly reached the end of his rope. In an attempt to bring order to the chaos of managing data silos within his financial institution, he drew a schematic of all the systems that, at one point or another, tied into his core. The end result was so confusing that he named it “the wheel of death.” 

While admittedly comical, this story sheds light on one of the most significant and serious questions financial institutions face today. How can lenders leverage data in a meaningful way to create efficiencies, influence revenue, and enhance customer service? There is a strong sense in lending that financial institutions have access to all the data they need, they just need a strategy to mine it. But the key to access is effective data integration.

In today’s world, it is not just the younger generation (or Gen Z in my case) that are becoming more comfortable talking to their smartphones, Google® Home, and Alexa for everyday functions. These types of major technology companies are defining consumers’ expectations and behavior, and it won’t be long until this trickles down to the financial services sector and for consumers to expect banks to provide voice recognition technology.

Industry observers estimate that there have been as many as 4,000 fintech start-ups since 2010 in the U.S. and the UK alone. These companies reside in all sectors of financial technology, from lending to payments and beyond. This surge in development has generated a lot of excitement in both the retail and the commercial space. It has also triggered a new wave of discussions in the area of vendor management practices, where regulators are starting to focus their attention. No doubt, your financial institution has considered utilizing new third party software for many different functions in the past two to three years. But the market is now evolving beyond software.

A recent metamorphosis of the payments industry began with same day ACH (automated clearing house). ACH is basically the rails that connect banks and credit unions in the United States and allow payments to move between various accounts. Beginning last September, 2016, NACHA (National Automated Clearing House Association) adopted a rule to provide a new, “ubiquitous” capability for moving ACH payments faster. The rule was planned to occur in a three phased approach. Phase one, required a mandate for the ability to receive and process same day credits, and introduced additional processing windows for settlement times. Phase two, which is scheduled to go into effect September 15, 2017, required a mandate for the ability to receive and process same day debits – in addition to credits. And lastly, phase three, planned for March 2018, will make same day ACH funds sent before a specific cut-off window available to the payee by end of business on the same day.

Just as same-day ACH seems to be picking up steam and appears to solve the answer to all payment problems, we discover it’s not fast enough. We need faster – we need instant – we need real-time! The mobile-first, digital minded, technology hungry end consumer is doing everything else faster, therefore the way they pay is no exception.

Enter real-time payments.

The world of commercial loan origination is changing rapidly. A by-product of billions of dollars in worldwide technological investment since 2010 is the creation of better lending platforms for community-centered financial institutions.

In the beginning, lenders might have been satisfied with a simple loan origination system (LOS), but by 2017 it’s clear that a basic LOS no longer allows you to be competitive. Today’s world requires systems that talk to each other with ease. It requires strong tools to manage workflows and pipelines while helping generate increased loan volume.

As summer draws to a close, many of us are grabbing a last reprieve from the office grind to unwind, recharge, and perhaps even catch up on our reading. If you like to seek out new ideas in your downtime, then consider this short list of the most popular commercial lending blog posts from Strategically Thinking so far in 2017.

It's a hot one this year. Cool down with a recap of the top Strategically Speaking posts of the summer.