Five for 2025
by Kas Stewart, SVP & AAP
NUMBER 1: FDIC Signage
The FDIC has amended Part 328, Subsection A and B governing the use of the FDIC signage. Compliance with subsection B is required by January 1, 2025. This section, FDIC Official Signs and Advertising Requirements, False Advertising, Misrepresentation of Insured Status and Misuse of the FDIC’s Name or Logo was approved by the FDIC Board in December 2023.
Compliance with Part 328, Subsection A has been extended to May 1, 2025. This section applies to the provisions requiring (1) the use of the FDIC official sign, official digital sign, and other signs differentiating deposits and non-deposit products across all banking channels, including physical premises, ATMs and digital channels, and (2) the establishment and maintenance of written policies and procedures to achieve compliance. The final rule also establishes a new black and navy-blue FDIC official digital sign. Banks will be required to display the official digital sign near the name of the bank on all bank websites and mobile applications and certain Automated Teller Machines. Details of this change are available on the FDIC website as well as in the Federal Register Notice.
NUMBER 2: ISO20022
What is this? The new language of payments. This change will be efficient, fast and will standardize the US with other global payment systems.
When is this effective? The Federal Reserve has selected a single day implementation system with all financial institutions converting on March 10, 2025. The existing wire system will have an orderly close on March 7, 2025, at 7 PM EST. The Fed will sunset the current wire format (FAIM) and it will no longer be available.
Is Bankers Bank ready? The Bankers Bank has been working diligently on this change, has been certified and is working on other components that lead to full readiness. Getting The Bankers Bank ready for our customers is a key piece of this change, but we cannot do it all.
What do I need to do? Act Today! Please inventory upstream and downstream systems that support your wire operations including client facing systems, Office of Foreign Asset Control (OFAC), anti-money laundering, fraud monitoring, accounting, billing, or cash management and Treasury operations. Reach out to those vendors to ensure their readiness.
Where can I get more information?
- The Federal Reserve has many resources in the ISO20022 Implementation Center.
- Google: Fedline Advantage users get ready for ISO20022 and you will find information on training, the next drop-in online seminar – December 4 (must register), the next testing date – January 25, 2025, and the format.
- There are On Demand webinars available on YouTube, A Preparedness Checklist, and an offer to subscribe to On the Wire ISO20022 Newsletter, and of course FAQs.
Most impactful for you! Existing wire templates cannot be copied into this format. Every wire will be a new payment. This applies to wire templates as well as import/upload of files.
NUMBER 3: Faster Payments
This product from the Federal Reserve has now been available for more than a year. The Federal Reserve recently hit another milestone with one thousand banks taking part in FedNow. Oklahoma has 40 financial institutions that have implemented the service. Most users are in the Receive Only category, so adding send capabilities will be a target and goal for you, your service provider, and the Federal Reserve in 2025. The Federal Reserve waived fees for 2024. Most service providers have implemented a fee structure, but many are starting to think about fees for the send side of the transaction. Have you considered what you would charge for a FedNow transaction? Have you discussed this with your core or service provider to see what their plans are? Because FedNow is like a wire: final and irrevocable, should the fee mirror what you charge for a wire? What will your customers expect? Do you have a marketing plan for this product? Is your service provider prepared to offer send capabilities or is that still in development? Have you considered how you will manage the balance in your account if you begin to send? The Bankers Bank is prepared to help with that process by offering a Liquidity Management Tool. Please reach out to your account representative for more details.
The Banker Bank is also a funding agent for Real Time Payments (RTP), and we would be glad to discuss that product with you. RTP has been processing faster payments for five years and can be an added service or an alternative to FedNow.
NUMBER 4: Multi-Factor Authentication
Several years ago, The Bankers Bank stepped away from the ID and password access to our on line product, iWeb, and offered a fingerprint scanner. Time has passed, our industry has changed, and data security and multi-factor authentication has become an industry standard. Use of the fingerprint scanner does not have a sunset date; however please consider moving to an alternate access method. We are reviewing other options, but we currently recommend and support the following two methods:
- Username/password/IPRestriction/YubiKey
- Username/password/IPRestriction/Google Authenticator
Is Biometric not MFA? Biometric authentication verifies user identity using a piece of “who they are” and would require sophisticated technology to replicate, unfortunately it only compares one authentication factor.
The Bankers Bank recommends banks follow the guidance in the FFIEC Statement on Authentication and Access to Financial Institution Services and Systems to perform a risk assessment.
Can I use both Google Authenticator and YubiKey? Absolutely. This decision may be made on a per user level. We want to give banks the flexibility to perform their own risk assessment and choose the best approach for them.
How do I set/register my preferred method? Contact TBB Operations
NUMBER 5: Brokered Deposits
On July 30, 2024, the FDIC proposed some changes to Brokered Deposits that would reverse many of the provisions made in 2020 and require changes to relationships established during the past four years. The proposal is intended to strengthen the restrictions to reflect the FDIC’s experience since 2020, narrow the definition of brokered deposits, eliminate “exclusive deposit placement arrangement” and amend the interpretation of the primary purpose exception. If you have not commented on these changes, there is still time as the proposal deadline was moved from October 22 to November 21.