The National Automated Clearing House Association's board has unanimously adopted a new mission statement and strategic objectives.
Culminating a yearlong effort, the association set its sights on the changes in payment system needs, vowing to help members diversify their services to meet emerging demands for electronic payments and related information.
"The revised strategic plan positions Nacha and the ACH network for the future," said Sam S. Cerverizzo, chairman of the association and senior vice president of Chemical Bank, New York.
Mission Statement
The group consists of 29 regional clearing houses to which 14,000 depository institutions belong, and 11 others organized by individual bank holding companies. Its mission is "to be the leader in the ACH and a recognized leader in the development, promotion, and use of electronic solutions to improve the payments system."
This statement emphasizes the traditional use of the network for paperless recurring payments like payrolls and insurance premiums, and for providing innovative combinations of monetary transfers and related information services, as in treasury management and electronic data interchange.
Mr. Cerverizzo had said in an interview this year that the 20-year-old association's leadership saw strategic planning as critical to defining its objectives, which include supporting financial institutions' drive to build non-credit, or fee, income.
2.3 Billion Payments a Year
The automated clearing house network handles 2.3 billion payments a year, of which 1.7 billion are initiated in the private sector and the rest by the federal government's Social Security direct deposit and other programs.
Most of the transaction processing is done by the Federal Reserve System, but Visa U.S.A. and the New York and Arizona clearing houses have built a growing, though still minority, market share.
Total commercial volume increased 16% last year. While the growth rate has been relatively steady in recent years, it was as high as 26% in 1989, and some observers have expressed dissatisfaction about the network's failure to displace more checks.
National ACH Association officials have pointed to a steady increase in the percentage of salaries being automatically deposited -- 35% according to one study -- and an increasing volume of on-us, or intrabank, transactions that are not included in the more widely reported interbank statistics.
Elliott C. McEntee, president of the association, which is based in Herndon, Va., said its members and directors developed the strategic plan using a "scenario planning" technique rather than the traditional, goal-oriented process.
External Factors Assessed
In scenario planning, which is suitable for businesses affected by rapid market changes, participants assess potential external developments before getting down to setting goals and objectives.
Mr. McEntee said financial institutions that belong to the local ACH groups, as well as corporations served by them, provided "valuable input" for the strategic plan.
The plan sets forth 19 action plans -- in areas including consumer-initiated bill payments, electronic data interchange, cross-border payments, and electronic checks -- and four broad objectives:
* Ensuring that the ACH network meets developing needs of financial institutions and corporations.
* Reviewing and making changes in its "core responsibilities" in order to increase volumes of traditional ACH products.
* Helping members that have expanded their roles to other payment systems, such as electronic check clearing and consumer-initiated debits.
* Reexamining Nacha's current organizational structure.
The association said its next step would be to begin on the 19 action plans.
