Customers expect more from cross-border payments than ever: speed, transparency, predictability and cost-effectiveness. But regulation is consuming the payments modernisation agenda, and customer experience risks becoming little more than an afterthought.
Compliance investment is at an all-time high, but it isn’t translating into a better experience for the customers banks are trying to retain. Many still face settlement wait times of up to 5 days on average, with limited visibility into the payment process. Our research found that 77% of banking leaders admit regulatory demands outweigh customer demands in their payment modernisation decisions.
If banks want to retain their competitiveness in the market, customer experience and compliance can’t be treated as competing objectives, they must be connected priorities.
Right investment, wrong approach
Compliance investment isn’t the issue, it’s the approach. We found that 75% of banks treat each regulatory mandate as a distinct project rather than part of a wider modernisation strategy. This approach keeps banks in reactive mode: investment goes in, but progress only happens in fragmented stages of the process.
Whether it’s ISO 20022, T+1 settlement, AML or FATF, each mandate treated in isolation is a missed opportunity to move the needle for the customer too. Banks are left tackling one regulatory fire at a time, while the work needed to get ahead of future regulations and meet rising customer expectations is pushed down the agenda.
Breaking the reactive cycle
Both customer expectations and regulatory change have outpaced infrastructure ability due to this reactive approach to modernisation investment. 60% of banking leaders say their existing systems struggle to keep pace with evolving regulations, while 72% admit richer data requirements have exposed limitations in their infrastructure. This friction is felt by the customer: delayed settlements, rejected transactions and limited visibility into how their money is moving.
Under tight timelines, some will turn to short-term fixes to patch the problem. But translation tools often cost more in the long run, and the additional complexity they layer onto systems only brings further risk to the customer experience.
A mandate with a fixed deadline may feel more urgent, but underinvesting in what customers want will erode trust and push them towards other providers. Banks need flexible infrastructure that can absorb regulatory change while still improving the speed, efficiency and reliability of their service. With the right specialist partner, this can be built.
How Aqua Global can help
Aqua Global helps banks modernise their payment infrastructure through Aquila, our cloud-native messaging and orchestration hub. Aquila connects with existing core systems and provides infrastructural flexibility through:
- Native ISO 20022 processing: Aquila processes ISO 20022 messages directly, rather than translating them between formats, helping preserve rich payment data and improve straight-through processing rates.
- Unified orchestration: fragmented payment processes are brought into consistent workflows, enabling compliance checks to run automatically, reducing manual intervention and helping payments move more smoothly for customers.
- Seamless integration: Aquila connects with core banking, AML and sanctions systems via APIs, automating compliance checks without forcing banks to replace critical infrastructure or undertake costly rip-and-replace projects.
- Full visibility and auditability: every transaction is tracked end-to-end, making issues easier to identify, investigate and resolve before they affect customers or create regulatory concerns.
Banks are spending more on compliance than ever, but how that investment is targeted matters. Done right, modernisation ensures each new mandate strengthens the foundation, rather than adding to a pile of standalone fixes.
Ultimately, the institutions that stay competitive will be the ones whose payment infrastructure works for their customers, not just their regulators. You can read the full findings of our survey of 150 UK and European banking leaders here: From Compliance Burden to Competitive Advantage
