Lessons from NPP implementation in SWIFT migration

  • By Christine St Anne

The implementation of the New Payments Platform could provide lessons for the banking sector as it starts to move to SWIFT’s new messaging standard.

Recently the Reserve Bank of Australia and the Australian Payments Council issued a consultation paper seeking views on migrating the payments system to SWIFT’s new messaging standard – the International Organisation for Standardisation (ISO) 20022.

The central bank and APC are aiming for the project to be finalised by the end of 2024 – industry is invited to provide their views by the end of May.

BPAY Group’s chief strategy officer Mark Williams, notes that the consultation paper does assess how the migration to the standard could be adopted particularly around governance and implementation.

“There are some good learnings that the industry could adopt from the way the New Payments Platform was implemented,” Williams said.

“This all centres around testing and migration and the practical realities on how to bring this in the most effective way,” he said.

 Williams said BPAY Group will be providing the case on how it can help the industry achieve this.

“We have a strong capability in providing certification services such as the ability to assess whether a bank is compliant with standards.

“These models help banks become compliant without having to necessarily spend weeks and months testing with each other. We would be quite interested in how we can potentially provide these services to the industry and help them with this migration.”

At a strategic level, Williams sees the migration to the new messaging standard as a “catalyst for change across the whole economy”.

Here he sees the industry in effect transitioning electronic commerce to this new standard where it sets a benchmark in the way corporates use payments, including receivables and invoices given that the ISO standard covers all that suite of transactions.

“At one level it could be as big as a national digitisation story,” Williams said.

“On the other hand, it could just be the banks upgrading the back-office transaction systems that underpin a couple of the domestic payment systems in Australia which is no small undertaking in itself,” he added.

“The consultation paper is assessing at a high level and trying to work where does this initiative sit between those two extremes.

“At a high level it's trying to work out if the migration to the new standard is an opportunity to generate new value-added services in the same way that the NPP was a catalyst to drive initiatives such Osko or is it just a technology project that the banks want to run collectively to upgrade what is really a legacy technology into modern standard.”