JULY 2021CIOAPPLICATIONSEUROPE.COM8LEVERAGING BLOCKCHAIN TECHNOLOGY IN THE BANKING AND FINANCIAL SECTORhe pace of payment innovation has never been more profound and intense as it has been in the last ten years. Consumers today benefit from an array of choices from tap-and-go using their mobile device and secure tokenization to next-generation contactless readers that send RFID signals to POS terminals. And investments in mobile-based P2P payments through the likes of Zelle and Venmo are getting a foothold. Think about it. Just a dozen years ago, these enhancements weren't even in production, much less having EMV-chip-enabled cards. Payment technology has undergone a paradigm shift and is poised to unsettle the status quo.What is equally profound is the changing mix of players in this space. A handful of networks and processors has long dominated payments in the US, but that model is slowly evolving. Alternative payment providers are springing up with new payment technology that poses risks to the tried-and-true payment rails. Consider that, according to Statista, there are nearly 5,800, so-called financial technology startups in the Americas. And guess which categories are getting most of the attention? Mobile wallets and payments. Analysts estimate that FinTechstartups can eat up to $280 billion in bank payment revenue by 2025, according to Accenture. That should raise some eyebrows. Companies like Ripple are developing blockchain-based global settlements, and startups like Plaid connect multiple payment apps to consumer's bank accounts driving payments across the ACH rail. So here's the dilemma. How does a community bank or credit union compete in this new age? The top 10 banks can undoubtedly make substantial investments in payment technology, and in many cases, they are building some of that future technology or acquiring it right now. For community financial institutions with smaller war chests, the playbook looks different. The days of giving great service (while still important) cannot fully counter the need to keep pace with change. Here are four things community financial institutions need to consider. · Deepen Relationships with Partners. Startups are incubating great technology, but are having challenges cracking into markets. As a former executive in a payments startup, getting a handful of clients willing to test your solution isn't easy. Take the time to influence your current IN MYOPINIONCHRIS SLANE, VICE PRESIDENT OF CARDS & PAYMENT SERVICES, ROBINS FINANCIAL CREDIT UNIONT
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