Many Hands, One Goal

Required knowledge

• Knowledge of the processing of instant payments
• Basics of the interface and security architecture of the SIC system

The IP NEZplus cooperation project impressively demonstrates the synergy potential for cantonal banks. Eight banks are thus jointly implementing instant payment in Switzerland. Even though such a project is not immune to unexpected challenges, well-designed cooperation offers added value to all participants.

Joint Venture and Value Creation

IP NEZplus is an extension of the NEZ (Neuer Zahlungsverkehr, New Payment Traffic) working group that has been in existence since 2014. In this group, the Swiss management consultancy PPI works regularly with the cantonal banks of Basel (including Bank Cler), Aargau, Thurgau, and St. Gallen on current payment topics. Baloise Bank and Luzerner Kantonalbank are also involved in the implementation of instant payment. This requires a new organizational structure. PPI orchestrates the community project, while some banks, such as the Cantonal Bank of

St. Gallen, act as lead banks, making important clarifications, testing systems at an early stage, or reviewing supplier contracts for the community. This structure allows for efficient coordination and communication among stakeholders, and allows them to benefit from the experience of peer banks. Because the banks have very similar IT architectures and share organizational project efforts, the implementation project will be significantly less expensive for most participating banks than an independent implementation.

It goes without saying that the highly available component (Instant Payment Processor), and thus the technical and functional coordination with its manufacturer, is central to the implementation of instant payment. The IP Processor ensures that payments and related reports can be processed and tracked within the required time. In addition, it serves many other processes that must be guaranteed by the surrounding systems via defined interfaces. This is where the biggest challenges of the project lie.

Criteria for Success

The required high availability of all systems involved in payment transactions and the specified maximum time span of ten seconds between order placement and crediting forced the suppliers to adapt their IT components or, in some cases, to rethink and rebuild them from scratch. In addition to technical aspects such as security, on-premises vs. cloud, etc., there are many other factors at play, such as the content of transaction messages or new licensing models. Besides the orchestrator’s expertise in payments and project management, the banks’ willingness to compromise is therefore also essential for joint success.

Eight key suppliers are involved in the introduction of instant payment at IP NEZplus, and the organization and coordination between the parties alone creates contact points for around 100 people. Despite the size of the project, which is unusual for cantonal banks, the joint project appears to be the right and sensible thing to do. In the initial phase, the banks will receive a standard product, which they can optionally refine later. IP NEZplus is on schedule and will go into production in August 2024 at the latest.

Michel Ruch, IP Project Manager, Cantonal Bank of St. Gallen         

Matthias Hungerbühler, Business Development, PPI Switzerland