Marcell King of Tyfone on supporting community-based financial institutions and those they serve
02/20/2024
Marcell King is chief commercial officer of Tyfone (Off-site), a digital banking solution provider that helps credit unions and community banks build modern banking platforms for their members or customers.
We spoke with King to discuss how Tyfone supports community-based financial institutions and how the FedNow® Service fits into its digital offerings.
Q: As a digital banking solution provider, how does Tyfone support financial institutions?
A: “Our goal is to help community bank and credit union account holders or members. We align our products with the needs of the communities these financial institutions support, knowing that these communities may be underserved.
“There are so many people living paycheck to paycheck who don’t have the necessary financial education to efficiently manage their money. We believe technology can fill this gap. Our ‘Skip-A-Pay’ solution, for example, is a loan payment deferral solution that gives consumers more flexibility and control over their money if they cannot make a payment or if they need extra cash during the holidays.”
Q: What are some problems you help solve for the credit unions and community banks you support?
A: “The challenge for many smaller community-based institutions is they end up paying more for technology than larger institutions because they don’t have the same scale. It’s a matter of making sure community institutions can stay competitive with large national institutions. We want them to have the same capabilities as their larger counterparts, such as instant payments, so they can better serve the communities they live and work in.
“Providing these financial institutions solutions that are effective and affordable, in addition to helping them drive operational efficiencies on the back end, allows them to put the cost savings back into their business by giving customers better service and better rates.”
Q: Can you describe how the FedNow Service operates alongside other payment rails on Tyfone’s platform?
A: “We started with Same Day ACH, and the only instant payment rail that we are working with today is the FedNow Service. The first credit union we built instant payment capabilities for was Star One Credit Union. Within their digital banking app, users can choose between ‘instant’ or ‘same-day’ transfers which provides a consistent user experience for sending payments. So far, approximately 20% of all external transfers initiated through Star One are through the FedNow Service. We’ve seen significant growth for instant payments because consumers want to move their money much faster. We’re building on that success and expanding our instant payments capabilities to more community-based financial institutions.”
Q: What instant payment use cases are you seeing as the most in demand?
A: “We see a lot of demand right now for account-to-account transfers. When you think about instant payment rails, sending money between financial institutions is low friction since you aren’t depending on any third parties for integration apart from your digital banking provider initiating those instant payments. Payroll is a type of business-to-consumer transaction that I also consider to be low friction, and we continue to see strong demand for instant payroll solutions.
“From the receive side, I think we will start to see significant traction in the person-to-person space, with digital wallets pushing money back to the financial institution so that account holders can instantly use funds received from their friends for lunch or whatever it may be.”
Q: How is the digital banking landscape shifting and how have instant payments influenced these changes?
A: “There’s a higher level of focus on utilizing data and analytics. One example is helping customers collect insights into their financial health. Traditional digital banking has been defined mainly by looking at balances and payment history. These days, digital banking is becoming more relational by providing account holders the ability to learn what they can do to improve their financial health.
“Another example is use of artificial intelligence in banking. We’re in the early stages, but we’re starting to see AI being used within fraud management tools and understanding the behavior of money movement to help mitigate fraud. Over the next couple of years, I think we’ll start to see AI leveraged more and more to help consumers safely and effectively manage their money.”
Want to learn more about the real-world impact of instant payments? Read more FedNow Q&As here.