The FDIC recently warned financial institutions to ensure that the new, innovative business technologies they use are compliant with internal policies, risk management practices and federal regulations.
The FDIC cited the potential for widespread consumer adoption of mobile payments and a limited availability of mobile payments models. Community banks and credit unions must adapt to meet the changing needs of their customers, and many institutions must be willing to swiftly adopt new technologies, according to ATM Marketplace.
“As is the case with any new product offering, a financial institution should have a review and approval process sufficiently broad to ensure compliance with internal policies and applicable laws and regulations,” the FDIC said, ATM Marketplace reports. “However, unlike most banking products that allow institutions to control much of the interaction, mobile payments require the coordinated and secure exchange of payment information among several unrelated entities. Making matters more challenging is that much of the innovation in the mobile payments marketplace is driven by entrepreneurial companies that may not be familiar with supervisory expectations that apply to banks and their service providers.”
The growing use of smartphones has created a demand for mobile banking options, even among older generations. Mobile payment use is on the rise as mobile banking has created a demand for the service.