Community bank INB on prioritizing modern payments as a core offering
8/28/2024
INB (Off-site) is a community bank headquartered in Springfield, Illinois. Focusing on technology and innovation, INB provides diversified financial services to customers and communities throughout central Illinois.
In our latest profile, Mark Donovan, INB’s chief operating officer, and Jamie Singer, vice president of deposit operations, discuss how INB makes in-demand services like instant payments readily available to their customers.
Q: Describe the customers INB serves. How did your customer base help you identify a need for instant payments?
JS: “We have a complex mixture of customers who have a need for instant payments, from consumer and business customers to state government and large municipalities. We use the FedNow® Service on both sides — for our large consumer presence, as well as our commercial base. By staying connected to our customers, we have a good understanding of what works best for them when it comes to payments. If something is quicker and offers our customers instant gratification, we felt we should probably move in that direction. Who doesn’t want their money faster?”
Q: In what ways are your customers currently leveraging the FedNow Service? What other use cases or offerings do you expect to support or roll out in the future?
JS: “We have seen a diverse range of use cases. We have one small business client in logistics that uses the FedNow Service every day to receive instant payments for deliveries. Overall, earned wage access is a growing use case among our customers. Insurance claims disbursement and real estate transaction settlements are also use cases that are poised to grow. We are currently receive-only, but our core processor’s first rollout of send capabilities will be through its P2P product, and we are excited to jump on board with these capabilities as soon as that option is available.”
Q: What key takeaways can you share about your path to FedNow Service adoption? Have there been any notable learnings since going live?
MD: “I think I speak for many small financial institutions when I say we often rely on our processor and technology partnerships. The value will come from converging those key relationships and making sure we continue to think beyond the current volume and focus on building capabilities for the future. When we participated in the FedNow Service Pilot Program, we thought this knowledge would transfer by osmosis — assuming everyone else was picking up on the curriculum and new payment rail, too. Since then, we’ve hosted roundtables that have reminded us that today, and in the future, there will be a need for basic education about instant payments and the FedNow Service. We have made use of the resources and education (Off-site) the Federal Reserve has put together, as well as created our own materials specific to our customers.”
Q: What education efforts are you undertaking for your own customers?
JS: “Just like a coach or a teacher has a wide gap to bridge between their players or students, we have a wide gap to bridge between us and our various customers, and education looks different for every single one of them. Our goal is to educate and give basic information to all our customers to keep them up to date on what we’re doing now, what’s coming and how we can help them brainstorm for the future.”
MD: “We are incorporating the FedNow Service into the payments continuum and payments strategy for some of our larger business clients with high volume, targeting those that can benefit immediately from instant payments. For clients that understand and self-manage that continuum of payments, we talk about the capability as a new opportunity and educate them on its parameters. We also ask questions about send capabilities and what those opportunities might look like, because journey mapping that payment type is important.”
Q: How can increased adoption of instant payments benefit financial institutions?
MD: “If we’re going to be a full-service bank to consumers, businesses and everything in between, we have to be an originator and conveyor of the technology necessary to do those things. It is hard to be all things to all people, but we’ve always viewed the Federal Reserve’s payment modalities as the core of what we must bring to the market. It comes down to being prepared. We may not know exactly what the market’s going to demand, but financial institutions can prepare so that we are ready with the necessary technology and modalities when our clients need to use them.”
Want to learn more about the real-world impact of instant payments? Read more FedNow Q&As here.