Regulation is a fact of life in the payments business but when it was discussed at Sibos, people seemed united in their opinions on how best it should be tackled. And common standards and communication are at the root of their recommended approach.

A regulation like Basel III is best implemented with a maximum harmonised approach across the globe, to avoid the risks of a non-level playing field and regulatory arbitrage. Under that regulation, managing the banks’ overnight and intraday liquidity generates a huge management information need, which is more easily attempted if common standards are brought to bear.

In turn, the harmonisation of technical payment standards is likely to benefit the customer and also level the playing field, but communication and collaboration with the technology providers are key here, as that will form the basis of working with the bank clients in the implementation of these standards. That does not mean however that everyone has the same products because of the common standards. On the contrary, they should be seen as a common set of foundations – what is built on top can be the bespoke and competitive elements.

In brief, there are three key take-aways:
• When faced with multiple regulatory changes, don’t just focus on single initiatives – take the holistic view. Many regulations are in practice interconnected and overlap, even though they are not all necessarily pulling in the same direction.
• The banks should communicate and collaborate on common standards with the regulators, their technology providers and their clients. This will keep the regulators calm, bring the expertise of the technology providers to bear, and will facilitate the adoption of the standards by the bank clients.
• It is in the interests of all the stakeholders to push for a global standards framework for payments. The securities and trade businesses are well ahead in that respect.

There is a momentum to overcome the reluctance to change – Carpe Diem!