An investment in the future
These days the ability to make prompt, secure money transfers is vital to any nation where business is conducted. Payment traffic is as crucial to the economy as the water or electricity supply. Every year the interbank (bank-to-bank) system handles payments amounting to some CHF 39 trillion, including around CHF 7 trillion in customer payments. The amounts of money shifted via the financial institutions’ infrastructure correspond to around 60 times Switzerland’s gross domestic product. Handling all this is a herculean task without which the Swiss economy could not exist and grow.
Two main drivers: Digitization and regulation
The share of customer payments made electronically has risen to 74% in recent years. Even though it is electronic, there are still gaps in the cycle from the issuing of a bill to the incoming payment, which means that the process still requires a lot of work, is prone to error, and is inefficient. Given the transformation business processes are undergoing, it is no longer appropriate for billers to transfer digital information to paper only for it to be digitized again by the customer. Full compliance with new regulatory requirements (the FINMA Anti-Money Laundering Ordinance and the recommendations issued by the Financial Action Task Force) is not possible at present because not all credit transfers allow the flow of information from the party initiating the payment to the beneficiary’s bank, which is responsible for a thorough risk assessment. Only the phasing out of payment slips and the introduction of the QR-bill will pave the way for this to happen.
The payment system processes more than a billion credit transfers a year. To make sure the system stays up to speed in the long term and all the relevant requirements are met, in the next few years the payment traffic will be harmonized and prepared for the future.
More on regulation
More on digitization
Backbone of the economy
Boosting economic clout
At the end of 2012 the Swiss financial industry decided to take account of the Single Euro Payments Area (SEPA) and the global trend by moving all payment traffic over to ISO 20022. This decision was made in the knowledge that companies, public-sector bodies, and non-profit organizations would also have to adapt their payment processes accordingly. The financial industry is convinced that the entire economy will benefit from the changeover to a standard that is used all over the world, and that this will make Switzerland an even more attractive place to do business – not only for multinationals, but also for domestic SMEs and start-ups that rely on straightforward market access. More
Swiss financial institutions have a vested interest in a seamless migration, and are therefore actively supporting their clients with the changeover to ISO 20022 by providing information, training, and one-to-one advice on the entire migration processes, and support in the form of practical tools such as example cases and test environments. More
SIX Interbank Clearing Ltd operates the central Swiss payment systems in francs and euro. Since 1987 most of the cashless payment traffic from the banks and other select participants in the financial markets has been handled via the SIC system – steered by the Swiss National Bank (SNB). SIC plays a key role in implementing SNB monetary policy. The system is also of crucial importance in the functioning of the financial center (including securities trading) and for the stability of the Swiss financial system. For this reason, SIC is subject to supervision by the SNB. In addition to large-value (bank-to-bank) payments the SIC system handles retail payments related to services provided by the financial services industry (for example credit transfers, card-related and direct debit payments). More