The Federal Reserve System today announced that First Vice President Kenneth C. Montgomery will lead the development of a new FedNowSM Service to support faster payments in the United States with interbank real-time gross settlement (RTGS) and integrated clearing.
The Federal Reserve Board of Governors announced its decision that the Reserve Banks will offer this RTGS service in a Federal Register notice last week.
“Ken brings deep financial services insights and technical expertise to his new role,” said Esther George, president and chief executive officer, Federal Reserve Bank of Kansas City, and sponsor of the Federal Reserve’s payments improvement initiative. “He is a natural fit to lead FedNow given his success in previous Federal Reserve technology and business management roles, and his leadership of our payments security efforts.”
The development of FedNow is a multi-year effort that will be informed by public comments on the current Federal Register notice. A product description that more fully defines the FedNow offering will be published in a subsequent Federal Register notice. Once in place, FedNow will provide critical infrastructure to enable financial institutions of all sizes to offer real-time payments services to their retail and commercial customers.
“This is an exciting milestone in U.S. payments modernization, as the Federal Reserve works toward fulfilling the payments industry’s request for a service that will support safe and efficient faster payments for all financial institutions – and by extension, provide the benefits of real-time payments to all Americans,” Montgomery said. “The FedNow team is gathering industry input on desired features and functionality so we can solidify FedNow’s product design and further define the pathway to launch.”
Montgomery will retain his current position as Federal Reserve Bank of Boston first vice president and chief operating officer, where his responsibilities include financial and treasury services, information technology and strategic planning. Earlier, as executive vice president and Federal Reserve System chief technology officer, Montgomery headed the National Information Technology Architecture and Standards Division. This included Federal Reserve System-wide responsibility for business consulting, technology and strategic planning, standards development, information security policy, risk management and high-intensity solutions engineering.