Independent Banker - June 2021 - 27

Next: The inside scoop on agency spreads 
complexity, timing and costs
vary depending on a bank's
infrastructure, however.
" [Community banks] need a
place for that digitally issued card
to land. It can be a bank's mobile
banking solution, " says Rebecca
Kruse, executive vice president
of operations for ICBA Bancard.
" They may incur some development
costs and, potentially, additional
integration costs. It really depends
on what they already have set
up today. "
For those willing to make the
investment, digital issuance can
help them achieve top-of-wallet
status. In Avidia Bank's case, its
digital card feeds into its mobile
app with a " fast path " to Apple Pay,
where it immediately becomes the
automatic option.
" [Our vendor] wrote the coding so
when we push our cards, if you have
multiple cards in your Apple Pay,
ours becomes the default card at top
of wallet, " Wood says. " The only one
we can't jump is Apple Card. "
Instant vs. digital card issuance
Digital issuance is the latest card
technology to address immediacy,
following on the heels of instant
issuance, the real-time fabrication
of physical cards at a bank branch.
Instant issuance was gaining
traction before the pandemic
" Instant issuance requires significant
investment and ongoing cost. For
banks that would like that instant
experience without all of the physical
machine costs, digital issuance is a
good option. "
-REBECCA KRUSE, ICBA BANCARD
took hold. Independent Banker's
2020 Community Bank CEO
Outlook survey reported that 17%
of community bank CEOs were
considering implementing it. In
our 2021 survey, 8% said they were
planning to implement or upgrade
their community bank's instant
issuance capabilities. So, where
does digital issuance fit in?
" Instant issuance requires
significant investment and ongoing
cost, " Kruse says. " For banks that
would like that instant experience
without all of the physical
machine costs, digital issuance is a
good option. "
Wood agrees. " That was the big
thing in the evaluation between
instant issue versus digital, " he
says. " That cost of card production
was a big barrier and still
continues to be. "
QUICK STAT
70%
of digitally issued cards are used
within five days of activation
Source: Ondot Systems Inc.
What about security and fraud?
Along with cost efficiencies, the
speed of digital issuance brings
other benefits. For example, if
a card is lost or stolen or if a
customer is a victim of card fraud,
community banks can immediately
reissue a digital card with new
credentials and put a physical
card in the mail. This cuts back on
call center questions about when
the new card will arrive and also
alleviates priority mail pressures,
because the customer has an option
in lieu of the physical card. Digital
cards also offer security with in-app
authentication, customer control
and alert functionality, and behindthe-scenes
fraud monitoring.
That said, says Kruse, " education
is the biggest defense against
fraud no matter what we're talking
about. When a bank is talking to a
customer about how to use [a digital
issued card], fraud and security are
always a part of the conversation. "
While digital issuance begins to
pick up speed and core providers
increase their offerings, this
technology and its opportunities
will grow and evolve. Community
banks will need to explore how it
aligns with their customers' needs
and their ongoing card strategy. As
Wood says, " [Digital issuance] is not
going to sit stagnant once you roll
it out. " 
Colleen Morrison is a writer
in Maryland.
independentbanker.org Q 27
http://www.independentbanker.org
Independent Banker - June 2021

Table of Contents for the Digital Edition of Independent Banker - June 2021
