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As the fintech industry continue to innovate, one of the big questions is where does it go from here?
The future direction of the industry may be best represented by a company that has gone through its evolution. Green Dot is one of the original Fintechs. It started with prepaid cards sold mostly through retail and has since evolved into a leader in the digital bank space. Its change from a prepaid card program managers to digital banking companycould foreshadow the future. In this episode, we talk with Greg Quarles, president of Green Dot Bank about how the company has evolved to work with tech partners like Apple, Google, and Uber. We also discuss the advantages of having a bank charter, and why other fintechs will need to consider adding products like lending if they want to thrive in the long run.
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Over the last 18 months, the dramatic changes in the ways that people live, work, and pay have meant that fraud prevention rules that were once very effective have lost some of their power.
In the latest episode of the IPA Payments Pod, we talk with Brian Grech, vice president of sales and marketing for Deep Labs, which uses persona-based artificial intelligence to predict behavior and prevent fraud. We cover how the pandemic created new risks that were not covered by old models, so what once looked like fraud could be a legitimate transaction, and what once looked legitimate could be fraud. We also talk about what artificial intelligence is and how it can help companies adapt to rapidly changing environments. As we come out of the pandemic, the business environment is evolving rapidly. So, as we adjust to a new normal, companies will once again need to think ahead and figure out what lessons still apply, and what has changed now that the pandemic is over. You can find the podcast here, or wherever you get your podcasts. The regulatory environment for payments has become very active over the past few weeks, with proposed rules, congressional hearings, and even lawsuits. In this episode of the IPA Payments Pod, our CEO, Brian Tate, and our Government Relations Director, Grant Hannah, help to make sense of everything that has been happening.
There are proposed rules on transaction routing and advertising FDIC insurance. There is a lawsuit over interchange fees. And a major fintech was sanctioned in two states for its advertising. This is all just the tip of the iceberg. To stay in the know, subscribe to our podcast and make sure to attend the IPA-member government relations calls. If you are not a member, visit www.ipa.org to learn how to join. Who’s Really Using Digital Banks? A study by MetaBank shows that it is not just “the kids.”5/11/2021 Ask anyone who the core audience is for digital banks, the answer will be “millennials,” “young people,” or some variation on that theme – basically “the kids!”
A study by MetaBank reveals that conventional wisdom is only partially right. The digital banking audience includes several groups of people, and there are opportunities for both traditional banks and the new generation of challenger banks. In the latest episode of the IPA Payments Pod, we talk about the findings of the study with Whitney Woyke, senior vice president of partner engagement with MetaBank. We cover the main findings of the study, what they mean for banks looking for customers, and how the pandemic has shaped customer behavior. Listeners can find the full study here: The Digital Migration: Growing Share of Banking ebook2 - Meta Payments Whitney also moderated a panel about the future of banking as a service at the IPA’s virtual Innovative Payments conference on April 12. The panel included Alex Kostecki, co-founder and COO of Clair, Kelly Knutson, president of Netspend, Patrick Williams, vice president of emerging payment solutions and debit processing sales for Visa, and Jenny Johnston, head of bank partnerships for Modern Treasury. If you would like to purchase access to the full recording of the session, contact us at info@ipa.org.
What inspired you and/or your company to get involved with the Innovative Payments Association?
The Innovative Payments Association was always a valuable partner to us when I was part of the Money Network team, and I believe the IPA will continue to be an important partner as the early wage access space continues to evolve. How does your membership in the IPA assist your professional and organizational goals? The IPA provides an opportunity to engage with our peers in the payments space, which is great for sharing ideas, building relationships and pursuing common goals. What future accomplishments do you hope to achieve with the IPA? We look forward to working with the IPA to shape the conversation around early wage access and assure the value of this service to consumers is communicated effectively. It is also important that we continue to support the opportunity for prepaid programs, while developing the agenda around EWA. How has your membership in the IPA most benefited you, and what are some of our events and resources that have proven most helpful? We are just starting our membership with IPA as Instant, but during my time with Money Network, the IPA provided the insight and support necessary when we were managing through the challenges with the CFPB, Durbin, etc. I also have enjoyed the events hosted by the IPA and believe they are a valuable opportunity to engage with our peers in Fintech. I hope we can do them again live soon! What specific efforts have you been most involved in, and what role have you played? I enjoyed my time on the Board during my time at First Data/Fiserv, and I enjoyed the opportunity to meet with Legislators and their Staff. It was also pretty cool to be part of the committee that developed the new name of the association! What’s one thing - either payments-related or not - you learned in the last month? How much I enjoy being back in the business day to day! My time off was enjoyable, but true retirement doesn't seem to fit my personality. As online shopping and remote payments grew over the past year, so did the number of customer disputes over payments. While many of the disputes were legitimate, some were fraudulent – either by people attempting to get out of paying for something they bought or by organized rings of criminals attempting to hack a company through social engineering.
In this episode, we talk about these problems and how payments companies can manage them with Corey Besaw, the banking operations president for Ubiquity. He talks about best practices for handling disputes including:
Cash, Crypto and Cocktails – The Innovative Payments Conference Continues to Educate the Industry4/21/2021 Even though it is too soon to get the industry together in person, the IPA continues to help payments professionals keep up with trends in the industry at its online Innovative Payments Conference.
The conference kicked off with a discussion of Banking as a Service, which forms the underpinning of many fintechs. IPA member Metabank led a discussion that included Visa, NetSpend, and Modern Treasury. We discussed data sharing with Consumer Reports and the Financial Data Exchange. The FDIC presented results from its household banking survey. Wednesday wrapped up with a cocktail class that featured the head mixologist of Old Elk distillery who explained how to make a Manhattan and discussed payments in the service industry during the pandemic. We also presented our Skiba volunteer awards and the Terrence P. Maher Prepaid Influencer Award. Skiba volunteer awards were presented to the following members for their work on the IPA Fintech Glossary.
For her help with member recruitment and her service on the IPA Board and finance committee, a Skiba was awarded to:
The IPA presented the annual Terrence P. Maher Prepaid Influencer Award to IPA Board Member Emeritus Nora Arpin. And we are only halfway through the first week. Upcoming sessions include a look at payments around the world, with a panel of international payments associations, how to manage your career as the economy emerges from the recession, and a look at what the North Korean hack of Sony Pictures can teach payments companies. If you’d like to attend these and get access to the recordings of previous sessions, you can still register. Visit IPC 2021 - Innovative Payments Association (ipa.org) On Wednesday, April 14, IPA presented the annual Terrence P. Maher Prepaid Influencer Award to IPA Board Member Emeritus Nora Arpin. The award, sponsored by Baird Holm LLP, was created in honor of Terry Maher, who served as general counsel for the association for eight years until he passed away in 2014.
Nora has been a long-time member as well as having served as the vice chair or the IPA Board. She has been instrumental in the Association’s efforts to advocate on behalf of the industry, and was among the first to identify brokered deposits as an important issue for the association to address. Congratulations to Nora on this well-deserved honor! As people’s lives become more digital and they add more connected devices to their lives, their risks for identity theft, fraud, and other cyber-crime grows. Everything from computers to smart phones to baby monitors to fitness trackers can all introduce risks.
The average person is often unaware of these risks, and so they are unprepared to manage them. To help address this issue, Consumer Reports, a nonprofit focused on consumer protection and education, has created the Security Planner. The site helps individuals create a personal plan for protecting themselves and their devices by asking them a series of questions about their devices and any security concerns they might have. Based on the answers, the planner creates a checklist of steps to take to defend against the risks identified. While it can’t provide perfect security, it can increase people’s overall security. In the episode of the IPA Payments Pod, we speak with Yael Grauer, the lead content creator for the planner, about how it was created, who it is designed to help, and how it works. We also talk about some of the best practices that people can follow while navigating cyberspace. The planner is a free resource, and one that companies can share with their customers if they want to provide resources on protecting against fraud. When the COIVD19 pandemic forced businesses to operate virtually, bank examinations moved into cyberspace.
This change likely will last beyond the pandemic, so bankers need to figure out how to be effective in this new environment. For institutions involved in non-traditional businesses like prepaid issuing, the problems of effectively conveying information and answering questions from examiners can be more complicated if they need to explain a new type of business. IPA member Bancorp has successfully navigated virtual exams, and in this episode, we talk with Mandi Lermond, the director and chief of staff, and Mike Althouse, the chief compliance officer about the lessons they have learned, and the best practices they have uncovered. For them, the most important exam question, both internally and externally has been “how goes it?” Find out why. They have also written an article for the ABA Compliance Journal that explores these topics in more detail. You can find that article here: Navigating Virtual Examinations | ABA Banking Journal |
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