Aqua Global, the financial messaging hub built for payments, treasury and securities processing, today revealed research showing European banks are prioritising compliance over customer experience as legacy infrastructure struggles to keep pace.
The survey of 150 European IT banking leaders, with half based in the UK, showed that:
- Regulation is putting a drag on innovation:
- 77% of respondents say regulatory demands outweigh customer demands when it comes to payment modernisation.
- 67% spend more effort adapting systems to new standards than improving customer experience.
- Banks fear missing milestones – but can’t keep up:
- 77% say missing a key regulatory milestone would cause significant operational and reputational damage.
- But 60% admit their existing infrastructure struggles to keep pace with evolving standards.
- Richer data requirements expose structural weaknesses:
- 72% admit richer data requirements (e.g. AML, sanctions, fraud) have exposed gaps in their current infrastructure.
- Structured addresses, AML/sanctions-related data and counterparty identifiers (BIC/LEI) are the most difficult piece of data to capture.
“The challenge with richer payment data isn’t availability, it’s fragmentation. Information sits across multiple systems and formats, making it hard to build a complete, trusted view of a transaction. The ability to manage, govern and validate data at scale is quickly becoming a defining factor in payments resilience. This is why 81% of respondents believe a unified messaging hub across multiple channels will be essential to remain compliant and competitive in the future.” Elliot Wood, Chief Technology Officer at Aqua Global.
ISO 20022 and T+1: Regulatory Compression Exposes Legacy Fragility
One in five respondents experienced downtime and/or payment disruption during migration to the new ISO 20022 standard. Almost all respondents (97%) experienced challenges, with the top three cited as:
- Legacy systems unable to handle structured ISO 20022 data.
- Poor underlying data quality for enriched ISO 20022 fields.
- Integrating challenges with other third-party systems, such as AML, sanctions and fraud systems.
As a result, 65% still rely, at least in part, on translation tools to remain compliant, even though 83% believe such short-term fixes will prove more costly in the long run.
The same structural weaknesses are now surfacing in preparation for T+1 settlement. While 21% of banks have taken action to prepare, almost a quarter (23%) have no plans in place. Legacy systems incapable of supporting compressed settlement windows without significant investment remain the most cited barrier.
Together, ISO 20022 and T+1 highlight a broader issue: regulatory timelines are accelerating faster than banks’ infrastructure can adapt.
“The migration challenges we’re seeing aren’t isolated incidents – they expose the structural limits of legacy payment architecture,” says Cian Fernando, CEO of Aqua Global. “Treating regulatory change as a tick-box exercise encourages short-term fixes that increase complexity. Banks that modernise natively reduce cost, operational risk and friction over time. As regulatory deadlines tighten and data requirements grow richer, banks relying on fragmented systems face rising operational risk and mounting cost pressures, with less capacity left to compete on customer experience.”
To learn more download the full From Compliance Burden to Competitive Advantage report
About Aqua Global
For over 43 years, Aqua Global has delivered a robust suite of financial messaging and transaction automation solutions for payments, treasury, and securities processing that integrate internal systems to external services. Trusted by leading banks across 22+ countries, our Aquila orchestration and integration framework offers exceptional performance, control, and scalability.
Learn more at aquaglobal.co.uk
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