The world of banking is shifting, and those who don’t adapt risk losing their customers to more forward-thinking institutions.
According to Jim Johnson, FIS’s executive vice president of issuer processing, banks that fail to take ownership of the entire payment flow – from authorization to settlement – will be left behind.
Johnson’s comments were shared during a recent Monday Conversation with the FIS team. As he put it, “There was a time when issuer processing was defined by what happened after the sale,” a process that typically consisted of approving transactions, moving funds, reconciling ledgers, and managing exceptions. While these tasks are still essential, the industry has evolved, and banks must do the same.
A New Era of Payment Processing
The old payment processing model was primarily focused on “plumbing” – the behind-the-scenes work that kept transactions moving. However, with the rise of digital wallets, contactless payments, and real-time settlement, banks must now assume a more active role in the payment process. They need to provide a seamless experience for consumers, who expect to be able to make purchases, track transactions, and receive rewards in real-time.
This shift is driven by changing consumer behavior and increasing competition from fintech companies. Banks that don’t adapt risk losing customers to these new entrants, which are often more innovative and customer-centric.
The Risks of Not Adapting
The stakes are high for banks that fail to take ownership of the payment flow. “Losing the customer” is more than just a marketing metric – it’s a matter of survival. As Johnson puts it, banks that don’t adapt will be left behind, struggling to compete in a rapidly changing market.
So, what does this mean for consumers? It means that banks will need to prioritize innovation and customer experience, providing a seamless, integrated experience that keeps pace with their evolving needs. In short, banks will need to become more agile, more responsive, and more customer-centric if they hope to remain relevant in a rapidly shifting landscape.
A New Era of Competition
The world of banking is no longer defined by brick-and-mortar branches or traditional payment systems. It’s now a digital landscape, where the pace of innovation is faster than ever before. Banks that don’t adapt to this new reality risk losing the customer – and ultimately, their place in the market.
