Payment transactions become more transparent
The biggest change in Swiss finance is on the home stretch: payment traffic, which is being standardized. The ISO 20022 project also aims to combat money laundering and terrorist financing.
Everyone and everything is affected by the changeover in Swiss payment traffic: From the individual to the large company, from the payment slip to the account statement. In the context of payment traffic, the previous DTA format as the standard for data transmission will be replaced by ISO 20022 The changeover of the accounting software at SMEs must be completed by June 30, 2018, according to the federal government's SME portal. A central element of the changeover is the new QR Invoice, which is scheduled to be available from 2019.
Combating money laundering and terrorist financing
More than 70 countries - including Switzerland - and around 20 organizations pledged to step up the fight against terrorist financing at a conference in Paris a few days ago. Federal Councillor Sommaruga said that Switzerland, as one of the world's most important financial centers, was particularly aware of its responsibility in the fight against terrorist financing. In this fight, the Confederation is setting the following three priorities: improve the detection of financial flows, strengthen coordination between national actors and intensify international cooperation.
The Minister of Justice's concern could be favored with the changeover in payment traffic. Pascal Born, ISO 20022 project manager at the software house Sage, for example, emphasizes, "The creation of additional transparency and the associated fight against money laundering as well as terrorist financing are certainly some of the main reasons for the changeover to ISO 20022." In addition, the Swiss payment traffic system has to meet constantly increasing national and international requirements, says Born.
Two systems become one
In 2012, the EU launched the SEPA (Single Euro Payments Area) project, which aims to standardize cashless payments worldwide. SEPA is based on a new standard ISO 20022. This new international standard for electronic data exchange in the financial industry, which is playing an increasingly important role worldwide and especially in Europe, will also apply in Switzerland from July 2018.
Until now, there have been two payment systems in Switzerland: That of PostFinance and that of the banks. Now, under the leadership of SIX Interbank Clearing, they are being fundamentally harmonized and simultaneously aligned with the new standards. The aim of the harmonization is to increase efficiency in payment traffic, prevent errors and delays and consequently save costs.
PostFinance was the first institution to introduce the new payment standard as early as January 1, 2018.
The changeover affects all
Payment traffic, and thus ISO 20022, affects financial institutions, companies and customers. From end customers to large companies, all players in the Swiss economy are therefore affected by this comprehensive changeover.
Credit transfers, direct debits, notification and reporting, but also payment slips will be adapted to the new system. To be able to work with the new ISO 20022 payment standard, Swiss companies must therefore update their processes and software accordingly. SIX plans to complete the harmonization process by 2020. By then at the latest, all formats must be standardized so that the exchange of information can function smoothly.
Optimization opportunities for companies
The changeover to ISO 20022 is a challenge for SMEs in particular, but also offers great optimization opportunities for companies of all sizes. The standardized payment systems can prevent recording errors, queries and rejections by banks and thus reduce administrative expenses, as experts write. The standardized processes, for example the simplified cash management, the improved data quality or various automation options bring great advantages, writes the software provider Sage.
What is to be done concretely?
In order to work with the new standards, both SMEs and large companies need accounting software that supports the new standard. The hardware used may also need to be updated, according to the software house. It is also important that the SME clarifies with its house bank to what extent it supports the new ISO 20022 formats, when the migration will take place and how exactly it must be done.
Sources: Sage, Confederation
Information on the changeover to ISO 20022 and experience reports from SMEs
