White Paper

What are the risks to banks as they prepare for the NPA?

The New Payments Architecture (NPA) is on its way, and will start impacting direct participants in the next 12 months. It is already a board level agenda for current Faster Payment Scheme (FPS) participants.

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The arrival of the NPA represents a major transformation of the UK’s payments landscape, bringing both opportunities and challenges for banks and financial institutions. Action will be needed to ensure that banks can process payments under both FPS and NPA – but for banks with legacy infrastructure, getting the necessary capabilities in place may not be straightforward. Managing this transition comes with risks, as well as questions as to how long banks will be expected to support a long FPS tail for.

Are we expecting that Pay.UK will extend some help and reduce the overhead for banks to support FPS and NPA via the central infrastructure? Or are we expecting the regulator to intervene and give a hard date for FPS sunset, similar to what has happened with transitions such as LIBOR?

In this white paper, we will explain the purpose of the NPA, the risks that banks need to address with this transition, why the current approach of a tactical solution is a sunk cost, and what the ideal future state will look like.

Watch also our recent webinar with UK Finance and industry experts from Pay.UK, SWIFT, Aldermore and Nationwide to hear their thoughts on the arrival of NPA.

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