As much as two in three European banks may not be prepared to meet the EU’s instant payment deadline, a new survey by the transaction data management firm, Intix, has revealed.
Intix reveals that while only 33 per cent of respondents said they are ready to meet these deadlines, a further 41 per cent also claimed they are prepared – but have limitations. Meanwhile, 25 per cent said they are not ready to comply with these deadlines at all.
Intix’s research looked into the state of instant payments across the European banking sector, exploring readiness levels and compliance with key regulations, including ISO 20022 standards, as well as the readiness of banks preparing to meet the EU’s Instant Payments Regulation, which takes effect in January 2025 for receiving instant payment transactions and October 2025 for sending instant payment transactions.
Compliance with sanction screening, anti-money laundering (AML) and fraud detection requirements, including Verification of Payee checks, was identified as the top concern.
Many banks are facing significant challenges when implementing real-time payment capabilities, meeting the mandated 10-second transaction window, and complying with AML and fraud detection protocols. With the regulatory deadlines fast approaching, Intix explained that its survey indicates the growing need for improved processes and technologies to meet these goals and ensure compliance.
Most banks are prioritising investments in risk and compliance to prepare for these upcoming changes. In fact, 42 per cent of organisations are dedicating the majority of their budgets to regulatory compliance. Payment engine adaptation ranks as the second-highest priority, with 33 per cent of banks identifying it as their primary area of investment.
Tackling growing levels of fraud
Banks show similar alignment in their approach to sanction screening and fraud detection. Nearly 42 per cent of respondents plan to implement a combination of pre-screening, real-time, and post-screening measures to address these challenges – making it the most popular strategy. A mix of pre-screening and real-time screening follows at 25 per cent. With only 17 per cent of organisations relying solely on real-time screening measures.
The survey also revealed that 50 per cent of banks are still in the process of adopting the ISO 20022 standard, which is gaining traction across the financial services sector. Nearly 40 per cent of organisations reported that ISO 20022 is already their primary standard, while only eight per cent indicated they have no experience with it. The results sourced by Intix underscore the growing adoption of this particular global standard.
Yoann Vandendriessche, chief product officer at Intix, commented: “The survey results highlight the immense pressure that European financial institutions are under as they race to meet the new regulations. While a third of respondents are confident in their ability to comply, the majority are facing substantial obstacles.
“Banks that are lagging must move quickly to close these gaps. Investment in advanced data management and compliance technologies is essential to achieve the real-time monitoring and reporting capabilities required under the EU’s Instant Payments Regulation. It’s clear that this will be a demanding period with pressure mounting to meet deadlines and avoid potential fines.”
The research highlights the increasing demand for modern solutions that enable banks to navigate the complexities of instant payments, ensuring they have the visibility and control needed to meet regulatory requirements and customer expectations.