Community banks are turning to technology provider Computer Services Inc. for core processing and FedNow capabilities. 

In the sales process, the Paducah, Ky.-based CSI is being asked about FedNow rails and onboarding by potential clients as a new selling point for the core processer, Allison Maddock, chief product officer at CSI, told Bank Automation News.

The payment service through CSI, which went live on July 20, “becomes sort of a point of entry” for clients to get into FedNow, Maddock said, noting that when those questions come, “we are ready to support [those clients] and we can move them to this payment rail either immediately upon conversation or when [they] want.” 

When a client does want to leverage FedNow through CSI, the tech provider is equipped with the technology and it “almost becomes a paperwork transactional type process,” she said. “We gather all of the necessary information and then we have an entry portal with the [Federal Reserve] where we submit [the bank] for onboarding.” 

The Fed obtains necessary approvals and e-signatures, then the offering can be turned on through CSI, she said, noting that it’s possible “because of the way our team has architected the solution and CSI being their core provider.” 

Live with FedNow 

One bank that already using FedNow through CSI is Illinois-based INB, Mark Donovan, senior vice president and chief operating officer at the over $1 billion INB, told BAN. 

CSI is “our link to the Federal Reserve,” Donovan said. INB joined the FedNow pilot program in 2020 and has been working through training and education for it since then. 

“We don’t independently deploy all of these technologies, so we have to rely heavily on enterprise banking providers like CSI to be there in lock step with us to get solutions to market,” he said. 

The bank is eager to use the payments rail for real estate closings and “those higher-dollar, more consequential payments,” he said. “That’s a use case that I think is easy for a lot of people across the financial institution ecosystem to identify with.” 

Throughout the pilot, rate of adoption and launch were unknown. However, for INB, “it’s important that we are at the table, and we have [FedNow] in place so that however the market responds to it, we’re not just living on the edge of the coast and haven’t prepared for either the water to come up or the water to go out,” Donovan said. 

INB was one of 35 financial institutions that went live with FedNow last month, joining U.S. Bank, Wells Fargo, JPMorgan Chase, BNY Mellon and 1st Source Bank, according to the Fed website.