Switzerland took a significant step forward in the digital payments landscape with the successful launch of SIC Instant Payments (SIC IP) on 20 August 2024.

As part of Phase 1, sixty-three financial institutions, covering more than 95% of Swiss retail payment transactions, have been integrated into the system.

Notably, currently six banks can now both send and receive instant payments, and transaction volumes have already exceeded expectations, with up to 10,000 transactions processed daily, according to SIX.

However, as Phase 2 approaches, challenges remain for the 180 financial institutions (FIs) in Group 2 that need to implement SIC IP by 2026.

Therefore, in Bottomline’s latest SIC IP webinar series, experts who represent each part of the ecosystem provided their advice on how to ensure an efficient implementation.

Phase 1 Successes: Collaboration and Preparation Are Key

From SIX’s perspective, Phase 1 has been an overwhelming success.

Matthias Sailer, Head of SIX Interbank Clearing (SIC AG), emphasised the importance of a well-coordinated process,

“We’re two months into production, and the system is performing perfectly. Importantly, we learned that onboarding takes time and is not just for IT connections but for aligning back-office processes across financial institutions.”

Sailer also highlighted the importance of testing,

“We offer several testing environments, including buddy testing and open loop testing, to ensure that banks can iron out any potential issues before going live. This has been crucial in ensuring smooth integration and operational efficiency.”

His message to Phase 2 participants was clear: “Start early and take advantage of the available SIC testing tools. Testing is free and invaluable.”

The Challenges: Why 43% of Phase 2 Banks Have Yet to Begin

Despite the clear benefits demonstrated in Phase 1, 43% of the 260+ financial institutions scheduled for Phase 2 implementation have not started their journey, according to webinar polling.

38% of respondents cite the cost and complexity of the process as the biggest barriers.

However, the experts warned that delays could prove costly. “The deadline will come, and the sooner you begin, the more flexibility you’ll have in managing the onboarding and testing processes,” Sailer advised.

Julien Lempen, Project Portfolio Manager at Banque Cantonale Vaudoise (BCV), provided a real-world example of how early planning and collaboration drove success for his institution.

“Our project took three years from planning to going live. We prioritised gaining expertise, making strategic choices, and testing extensively with partners, including clients and vendors.”

Lempen’s key advice for Phase 2 participants? “Collaborate early, and don’t assume others share your understanding. Verify it.”

Lessons for Phase 2 Banks: What You Need to Know

For Phase 2 banks, several key lessons have emerged from Phase 1 that will be vital for successful implementation:

1. Collaboration Is Crucial: Instant payments touch every part of the banking infrastructure, from IT systems to customer service.

As Julien Lempen noted, “Collaboration within your bank and across the financial community is the only way to ensure a smooth rollout.”

2. Test Extensively: According to both Sailer and Lempen, banks need to engage in thorough testing.

This includes testing all possible use cases, not only within internal systems but also with partners and clients.

“Real testing with real payments is the best way to identify issues before going live,” Lempen advised.

3. Start Early and Stay Agile: Despite the complexity of instant payment systems, early preparation can ease the process.

Vitus Rotzer, Chief Product Officer – Financial Messaging at Bottomline stressed,

“The phased approach of SIC IP will help Group 2 banks. The infrastructure is already in place, and proven solutions exist.

Starting early will provide your institution with flexibility in adjusting to the demands of 24/7 payments.”

4. Leverage Proven Solutions: Group 2 banks can leverage many solutions developed during Phase 1.

From connectivity tools to back-office adjustments, these solutions will enable faster implementation and reduce the potential for costly mistakes.

The Road Ahead: A Call to Action for Group 2 FIs

Implementing instant payments is not just an IT project; it impacts all facets of a bank’s operations, from customer interaction to financial reporting.

The good news is that if institutions start planning now, it’s achievable within a 12-month timeframe.

As Rotzer succinctly put it:

“Start early, get help if needed, and make use of proven solutions. The deadline may seem distant, but the complexity of this process means it’s never too early to begin.”

For those banks in Group 2, now is the time to accelerate planning and implementation efforts.

The lessons from Phase 1 are clear: collaboration, testing, and early preparation are the keys to success.

A Future-Ready Swiss Payment Ecosystem

The successful rollout of SIC IP marks a pivotal moment in Switzerland’s journey towards a fully digital payment landscape.

With the Swiss National Bank and SIX leading the way, instant payments are set to become the norm by 2026.

For financial institutions, the stakes are high, and the competitive advantage will go to those who prepare and adapt early.

To find out more, watch Bottomline’s webinar SIC Instant Payments: Impact and Lessons Learned from Phase 1 Implementation in full.