You get it. You understand the potential of instant payments: the speed, efficiency, and customer-centric approach that can transform your institution. But to bring this vision to life, you need a compelling business case that goes beyond the hype and delivers tangible evidence of value. This is where the art of persuasion meets the science of data, and it's time to dive into the "why" and "what" of building a strong argument that resonates with your board.
The Why: Why Instant Payments Matter for Your Institution
Your board needs to understand the core reasons why instant payments should be a priority. Here's where you need to focus:
The Changing Landscape: Today's customers demand speed, convenience, and control over their money. They're used to instant gratification in other aspects of their lives, and they expect the same from their financial institutions. Falling behind on this trend can lead to lost customers and eroded market share.
Unlocking New Opportunities: Instant payments open the door to innovative products and services that can attract new customers and drive revenue growth. Think about instant loans, microloans, or even embedded finance solutions within your existing offerings.
Building a More Resilient Institution: Instant payments can help you reduce operational costs, mitigate risks, and enhance security, ultimately creating a more resilient and agile financial institution.
The What: Digging Deep to Find the Tangible Benefits
Now, it's time to get specific. This is where you identify the areas within your institution where instant payments can make the biggest impact:
Identifying Inefficiencies: Look for processes where delays and manual handling are common. For example, are you processing a large volume of small-dollar wire transfers? How much could you save by shifting those customers to instant payments?
Reducing Call Center Volume: Which payment experiences are generating the most calls to your customer service center? Could instant payments streamline those processes and reduce call volume?
Attracting New Business: Are you trying to attract more small businesses to your institution? Instant payments can offer them streamlined cash flow and improved payment experiences, making your institution more attractive.
Mitigating Check Fraud: With check fraud on the rise, how many of your customers might be interested in moving to instant payments for greater security and certainty of delivery?
Building Your Argument: Focus on Measurable Results
Now that you've identified key areas for improvement, it's time to build your case. Focus on quantifiable results:
Cost Savings: How much money can you save by automating processes, reducing manual handling, and minimizing fraud risk?
Revenue Growth: How many new customers can you attract by offering innovative instant payment solutions? How much can you increase revenue by streamlining business operations for existing customers?
Customer Satisfaction: How can instant payments improve customer experience and reduce churn?
The Cost Factor: Third-Party Providers Make Instant Payments Affordable
Your board may have concerns about the cost of implementing instant payments. However, you can alleviate those concerns by highlighting the availability of third-party service providers. These providers offer affordable and quick pathways to connect to the RTP or FedNow networks, making instant payments accessible to institutions of all sizes. This means you can achieve significant benefits without the high cost and complexity of building your own infrastructure.
Real-World Case Studies: Showcase Success Stories
Don't just talk about the potential of instant payments; show your board what's possible. Case studies from other financial institutions demonstrate the tangible benefits and can strengthen your argument.
Case Study 1: Earned Wage Access (EWA)
Problem: Workers often live paycheck to paycheck, leading to financial anxiety and dependence on expensive short-term loans.
Solution: EWA providers like DailyPay and Earnin use real-time payments to give workers access to their earned wages instantly.
Result: EWA is becoming a key employee benefit, attracting new hires and boosting employee satisfaction.
Case Study 2: Corporate Card Funding
Problem: Companies often experience delays in funding corporate credit cards, hindering employee productivity and causing delays in critical business activities.
Solution: Real-time payments enable companies to prefund or pay off balances instantly, removing payment friction and ensuring smooth operations.
Result: Many companies, especially SMBs, are now using real-time payments for corporate card funding, enhancing efficiency and reducing stress for employees.
Case Study 3: Car Sales and Auto-Lending
Problem: Legacy payment processes in car sales are slow and inconvenient, leading to delays and customer dissatisfaction.
Solution: Real-time payments allow car sellers to receive payment instantly, streamlining the sales process and improving customer experience.
Result: Major auto dealerships like Lithia Motors and Driveway.com have adopted real-time payments, offering a smoother and more efficient buying and selling experience.
Addressing Concerns: Be Prepared to Answer Questions
Your board may have questions about the cost, security, and integration challenges of implementing instant payments. Be prepared with thoughtful responses:
Cost: Acknowledge the initial investment, but emphasize the long-term cost savings from automation, efficiency gains, and reduced fraud. Also highlight the cost-effectiveness of third-party providers.
Security: Highlight the robust security features of instant payment networks like RTP and FedNow, assuring your board that customer data and transactions will be protected.
Integration: Address the need for integration with existing systems and emphasize the benefits of a streamlined, modern platform. Third-party providers often offer seamless integration solutions.
Ready to Unlock the Power of Instant Payments?
By presenting a compelling business case that focuses on quantifiable results, showcases real-world examples, addresses potential concerns, and highlights the cost-effectiveness of third-party providers, you can gain the support of your board and embark on a journey of transformative growth with instant payments.
Contact me today for a free consultation to discuss your specific needs and develop a customized strategy for your institution.
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