Certified service providers of the Federal Reserve’s FedNow network are looking to the cloud to streamline client onboarding and drive adoption of the payments rail.
Tech provider FIS is exploring cloud-based onboarding but hasn’t launched the capability, John Wilson, director and leader of real-time payment products and services at FIS, told Bank Automation News, noting that onboarding a client to FedNow takes four to six weeks, and is a process that includes direct core integration.
Through FIS, FedNow has 35 financial institutions live and more than 40 in the process becoming live, Wilson said.
However, institutions are able to onboard in as few as eight days with some tech providers, Allison Baller, vice president at the Federal Reserve Bank of Boston, said at Bank Automation Summit U.S. 2024 on March 19.
Payments service provider, ACI Worldwide has deployed FedNow onboarding on its real-time payments cloud, Debbie Guerra, chief product officer and executive vice president, told BAN.
“We’ve facilitated that FedNow capability for our customers through a much more modern architecture than maybe others in the market have,” she said.
ACI Worldwide’s cloud service providers are Microsoft Azure and Amazon Web Services, and the company is working with IBM’s Red Hat to run its payment hub, Guerra said.
Payments provider Finastra also has a cloud-based onboarding approach, according to the company’s June 2023 release. The cloud-based Payments To Go solution allows clients to access FedNow via open API, the release stated.
Ease of onboarding can help drive FedNow adoption, Baller said, adding that FIs that are working with service providers like ACI to join the FedNow network.
The U.S. market is “collaborative and dependent on service providers and partners,” she said, and nearly 90% of the FIs on FedNow “have gone through a key service provider.”
FedNow adoption has been rising since its launch in July 2023, and the network had 661 financial institutions live on its platform as of March 29, compared to 35 when it launched last year.
Banks live on FedNow include $30 billion BNY Mellon, $1.6 trillion Citi, $3.4 trillion JPMorgan and $650 billion U.S. Bank, according to the Fed’s website.
