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The question of whether to build or buy was a focus of Product teams for many years, but it is not the right question to focus on any longer. Industry and technology are moving at an increased pace every year. Remember when things would slow down during the holiday season, and you could take a breath? Those days are gone.

Payments in Digital Banking used to be simple. For many years, members were limited to transferring money between their accounts, and paying some of their bills. Then, things started getting more complicated. Members asked for the ability to move money not just within the credit union, but between accounts at outside institutions. The Account-to-Account (A2A) transfer feature was born.

Does Matter matter? As a matter of fact, it does. Matter is an interoperability standard that enables Internet of Things (IoT) devices to talk with each other. Up until now, IoT products operated on their own specific platforms and standards, which meant Amazon IoT products worked with Alexa, “Alexa turn the lights on,” but if you had another smart device using a different standard, then Alexa could not help you. That limitation takes the convenience and efficiency aspects of IoT’s value proposition away. Having to use multiple apps to manage multiple devices is confusing.

Fragmentation. The American Heritage Dictionary defines fragmentation as: The act or process of breaking into fragments. Fragmentation is an interesting way to look at innovation, considering that innovation and fragmentation have a cause-and-effect relationship. The fragmentation of old processes (cause) leads to new innovations (effect). And in a cyclical manner, those innovations eventually become fragmented and newer innovations are born. Look at any industry and you will see this process in action. Telecommunications: landline, satellite, and cellular. Computer: desktop, laptop, tablet, smartphone, and wearables. Financial services: teller line, ATM, debit card, online banking, mobile banking, and wearables.

The payments landscape is undergoing a drastic transformation, as emerging payment technologies are driving innovation. Consumers benefit from the convenience, speed, and security of these emerging payment technologies. While much of the industry focus has been on these payments technologies, it is important to note that traditional payment methods are still widely used by consumers. In Part 1 of our series, we discussed the products and technologies reshaping payments. To build on that, two new payment frameworks will have a major impact on the payments space. Real time payments will finally provide consumers with the speed of payment they have desired. Cryptocurrencies (yes, we are going to go there) and Central Bank Digital Currency (CBDC) will offer alternative funding sources used for payments. And cryptocurrency can be used in conjunction with digital wallets (discussed in our last blog), conveniently offering an additional payment source. Real time payments and cryptocurrencies have been highly discussed in industry trade publications with the prediction that they will alter the payments landscape. Forever.

In the digital age, payments have become more convenient and secure than ever before. In fact, nine in ten Americans are using some form of digital payment and more than two billion people use mobile payments. With PayTech technologies such as Buy Now Pay Later (BNPL), digital wallets, and open banking services, consumers can choose from a range of payment options that best suit their needs. These technologies have revolutionized how people make purchases online or in-store, enabling them to access funds quickly and securely while offering convenience for buyers and sellers alike. Let’s explore some forces reshaping payments today by looking at Buy Now Pay Later (BNPL), digital wallets, and open banking services. We will also discuss how these innovative technologies create an ecosystem that offers credit union consumers greater choice when making payments.

It is no secret that financial institutions are preparing for a recession. But while some institutions are bracing for the worst by curtailing spending, others continue to invest in technologies to strengthen their strategic competitiveness. They view an economic downturn as an opportunity to raise brand awareness and strength. Technological advancement in difficult times is an excellent strategy for existing account holder retention and new account holder acquisition. And more importantly, it can foster long-term loyalty.

What word would you use to describe the design of open banking? Is convergence an appropriate descriptor which is the melding together of different data sources? How about assimilation, which is the acquisition and use of data within a provider’s application? Or, how about divergence with traditional financial services in one corner and fintech providers in the other? What if I told you that it didn’t matter? Consumers want the ability to integrate data from external sources into an application that increases their efficiency in managing their finances while offering personalized (relevant) suggestions to improve their financial well-being. How willing are consumers to use open banking? The numbers speak for themselves. 52% want more control over their finances, 38% want a 360-degree view of their spending, and 34% want suggestions for better money management. Those are compelling statistics!

Chances are your favorite industry trade publication, newsletter, or blog (we’re glad you are here) has talked about open banking. But the term open banking often gets confused with open finance. For simplicity purposes, open banking is about the “open” sharing of data between financial-based service providers. And that data will likely include balances and transaction history, to name a few. Instead of having disparate transaction histories at multiple financial services providers, opening banking enables all that data to be SECURELY consumed into one presentation.

Fraudsters are like magicians. They can make things disappear, they can instantly move things from one place to another, and they themselves can disappear in an instant. A magic trick is defined as “a remarkable act carried out purportedly by magical means but actually by trickery or illusion generally as a form of entertainment.” Both magicians and fraudsters accomplish these “remarkable acts” by diverting the observer’s attention (creating the illusion), if only for a moment, to complete the mechanics behind the trick. Magicians do this for applause. Fraudsters do this to steal money. Now you see it. Now you don’t. Your members probably have, or will be, victims of fraud. In fact, in 2021, it was estimated that 9 in 10 Americans (229 million people) experienced a fraud attempt, and one in six (33 million people) lost money to a scam. That much fraud truly is a remarkable act. Let’s look at some tricks fraudsters use to steal money.