In a recent interview with Financial Services Review, Emmelda Lawrence, Manager, Digital Servicing: Commercial Banking - Cash Management & Treasury Solutions at Fremont Bank, explores the role of faster payment solutions in enhancing the agility and responsiveness of businesses within the fast-paced market.
With 18 years of experience in product management and IT program management across multiple industries, Lawrence leads the development and implementation of digital solutions for commercial clients. She has a Master of Management degree from University College Dublin, Certified Scrum Master and Certified Product Owner credentials from Scrum Alliance.
Today, she delves into the impact of technological advancements, the shift towards digital payments, and the challenges faced in the financial industry, particularly related to underdeveloped infrastructure, fraud prevention, and meeting the diverse values of different generations. Lawrence also highlights the exciting innovations on the horizon, particularly in data security and the integration of machine learning and AI.
How can the implementation of faster payment solutions enhance the agility and responsiveness of businesses in the rapidly evolving and dynamic market?
Navigating the contemporary business landscape, I find it imperative to acknowledge the prevailing characteristics and expectations that define success. In this age of startups, technology takes center stage, often spearheaded by the dynamic Gen X and millennial cohorts.
"In the era of faster payments, our commitment to seamless, rapid services accentuates our dedication to meeting the dynamic expectations of today's fast-paced market, ensuring sustained growth and relevance in the digital age."
The focus is on serving the tech-savvy demographics, aligning with the standards set by five of the best-performing tech-centric stocks of the past decade: Meta, Apple, Amazon, Netflix and Google. Digital banking platforms are one such norm that has been facilitating instant gratification, rendering traditional business models without swift services and digital engagement outdated. The shift toward prominence of rapid digital transactions from conventional electronic payments is reshaping the financial landscape. Additionally, the COVID-19 pandemic has accelerated instant fund transfers mode, eliminating the need for in-person transactions and fostering a surge in mobile payments for everything from hospital bills to school fees. In adapting to these transformative forces, it is evident that embracing digitization and meeting the expectations of seamless, rapid services are key to remaining relevant in today’s ever-evolving business environment.
What are some of the challenges in your industry that current services are unable to provide an optimal solution?
The most pressing challenge lies in the underdeveloped infrastructure that fails to adequately support real-time payments for businesses. While real-time payments have gained much needed momentum in peer-to-peer scenarios, its adoption in the commercial payment realm has been sluggish. This is primarily due to heavy reliance on traditional payment methods such as ACH and Checks, as these payment types are seen as less prone to fraud compared to real-time payments with no fund reversal/block opportunity. The focus on fraud prevention tools is imperative for fin-techs and banks before further digitizing faster payments.
To highlight the severity of the issue, statistics from the government accountability office showcase over 700 new enforcement actions and $836 million in alleged fraud. Moreover, the shift toward real-time payments necessitates the capability to provide immediate customer support—a crucial aspect often viewed as a sunk cost.
Adding to the complexity, catering to the diverse values of different generations poses a formidable challenge. While baby boomers and Gen X prioritize loyalty, millennial and Gen Z value transparency and equity but lack trust in corporate organizations. As the wealth distribution transitions from boomers to younger generations, understanding and adapting to their distinct values becomes paramount.
Moreover, the inadequate diversification of funds combined with dramatic shift in interest were some of the reasons that lead to bank closures, pushing fin-techs and banks to pivot toward non-interest-driven revenue. However, the uphill battle lies in the minimal profit margins and equivalent costs of sales and marketing compared to interest-based products.
Navigating these multifaceted challenges requires a strategic and adaptable approach to ensure sustainable growth in the evolving financial landscape.
Are there specific innovations or technologies on the horizon that you are particularly excited about in the context of digital payments?
I find it truly fascinating to witness the growing emphasis on data breach prevention and privacy in both government and organizational practices. The simple act of websites seeking cookie preferences reflects a newfound commitment to safeguarding user data.
Recently, I came across a “Shark Tank” candidate who cleverly monetized customer data with explicit permission, highlighting the evolving landscape of data usage. In the realm of applications that handle data transfer between sources and destinations, it is akin to wielding a double-edged sword. The delicate balance between leveraging data for innovation and ensuring user privacy is a challenge that excites me, especially within the dynamic landscape of fin-tech and banking.
The integration of machine learning and AI in predicting user behavior and recommending products that are not asked for but needed by the banking and financial service customers and client organizations holds immense promise, not only for driving sales opportunities but also for enhancing customer retention strategies.
To top all of this, Generative AI and its impact on the financial service industry has not even been fully explored yet. Imagine fully automated product recommendations that are unique to different users of a similar profile within minutes of onboarding them, such as specific stocks to invest in based on your current expense trends.
It is an exciting era, when technology is reshaping the way we navigate data and user behavior in the financial realm.
Any advice, suggestions or warnings you would give to professionals in your similar role working in other companies in the financial sector in terms of dos or don’ts?
As a product leader, a piece of vital advice I received was to adopt the principle of “Customer first - Bank best.” This guiding philosophy underscores the importance of prioritizing customer-centric solutions that are not only sustainable and cost-effective but also present growth opportunities for the bank. This approach ensures that our innovations align with the needs and preferences of our customers while simultaneously benefiting the organization. It is a delicate balance that requires constant attention to the evolving landscape of customer expectations.
Additionally, I have learned the importance of avoiding the trap of martyrdom in the name of leadership. Acknowledging our human need for validation has been a key insight. By giving credit where it is due and graciously accepting recognition when offered, I have found that a positive and collaborative work environment is fostered, ultimately contributing to both personal and team success.
