FedNow is Coming: Is Your Institution Prepared?
The FedNow Service developed by the Federal Reserve is soon to launch. Financial Institutions of every size will soon have the ability/be required to conduct instant payment services for their customers. ACH will become obsolete and fraud will run rampant.
Positives and Negatives of FedNow
Positives:
Speed and Availability: Deposit and withdrawal of funds in seconds. 24/7/365.
Enhanced Reporting: Transaction details are instant with real-time reconcilement.
Modernized Payment: Mobile payment and transactions in real-time.
ACH a thing of the Past: Smaller institutions no longer need to rely on ACH to conduct business.
Negatives:
Speed and Availability: No time to detect fraud as it’s happening.
Enhanced Reporting: Transactions reconciled will include fraudulent activity. Potentially missed.
Modernized Payment: Mobile payment and transactions ripe for fraud with no-wait transfers.
Fraud Prevention Tools Obsolete: Most fraud prevention and detection tools do not operate in real-time.
Now is the time to prepare for FedNow. Real-time settlement will reduce a bank’s ability to use their current fraud-prevention measures. The new world of FedNow’s real-time banking requires real-time fraud detection and prevention.
Sources:
https://www.paymentsjournal.com/understanding-fednows-impact-on-faster-payments/
ToolCASE will get your banking institution prepared for FedNow. Our real-time fraud detection and prevention services can interact directly with all of your data channels and integrates seamlessly with both your fraud team and FedNow.
