Scotiabank prepares for Lynx, Canada’s new high-value payments system
Published: August 10, 2021
Can you tell us a bit about the areas of payments that you oversee as Director, Program Management, Enterprise Payments at Scotiabank?
As the Director for the Enterprise Payments team, I’m responsible for outcomes across our payments ecosystem including Payments Canada’s mandates for Lynx release one and the Real-Time Rail. My role is to introduce market-leading capabilities for our retail and business customers by keeping our teams informed and connected to the latest industry trends and innovations. Complimentary to this, I champion our payments capabilities with our business partners across the bank and demonstrate how our investments in payments modernization can help them realize their strategic goals and unlock new value for our customers.
How is Scotiabank preparing for Lynx?
Scotiabank has been heavily focused on the Lynx initiative, especially over the last 18 to 24 months. As an active participant in all industry forums, we’ve been helping shape the future of Canada’s payments landscape.
Our objective from day one has been to de-risk Scotiabank’s Lynx go-live by being proactive in modeling the impact this change will have across our entire domestic wire lifecycle. We have detailed and validated our end-to-end current state processes and re-engineered them for the target state in order to accommodate the new risk model, Lynx platform, and internal technologies we’ve deployed.
Early days in the program, we identified impacted stakeholders and developed an engagement model leveraging simple communication tools with the aim of supporting our teams to have a better understanding of the change and how best to support our customers.
Recent completion of Lynx industry testing marks an important milestone for Scotiabank and the industry. I’m proud of the dedication our teams have shown in preparing us for it.
To put the scope of work into perspective, we have:
- Developed more than 80+ target-state processes and procedures across five operational teams
- Created new contingency processes in collaboration with the industry in the event of service outages impacting Lynx
- Partnered with Payments Canada to train more than 40 team members across impacted business areas
- Modelled the implications of moving to the true Real-Time Gross Settlement risk model to better understand liquidity requirements
- Executed several ‘fire drill’ exercises to battle test our processes and procedures against the target state
We believe that our strong partnerships with Payments Canada, the Bank of Canada and fellow financial institutions will yield a successful go-live of Lynx for the industry.
What value will Lynx deliver to Payments Canada’s member financial institutions and Canadians more broadly?
In today’s digital environment, payments underpin many aspects of our lives. It’s imperative that they function quickly, reliably, and safely for all Canadians. Our current Large Value Transfer System (LVTS) is over 20 years old, and presents us with challenges in meeting the evolving needs of today’s digitally savvy Canadians and businesses. With the introduction of Lynx, we are moving away from the legacy of LVTS, to a modern, real-time settlement system that is fast, flexible and secure. The change goes beyond technology: with Lynx we’re introducing an enhanced risk model for all domestic wire payments.
Lynx is drastically important for the future of payments in Canada – it is the new underpinning of the Canadian financial system and will ensure Canadian payments remain globally competitive. Payments are becoming more contextual and borderless with the introduction of the ISO 20022 messaging standard. We are excited for what Lynx brings to the table in terms of adaptability to this contextual, borderless evolution.
Lynx release two will allow participants to generate and process ISO 20022 wire payments. What is the value of ISO 20022?
ISO 20022 is a fundamental rethink on how we communicate and exchange payment information. At Scotiabank, we’re excited about this change, and we see significant value in the fully structured and rich data characteristics this enables. From operational efficiencies to value added services, ISO20022 unlocks opportunities for business users and financial institutions that will transform the business of payments. Scotiabank will continue to participate and advocate across the industry, working closely with Payments Canada and SWIFT to accelerate the global adoption of ISO20022.
How is Scotiabank advancing on its overall payments’ modernization strategy?
Scotiabank’s payments modernization program is driving innovation for clients by delivering enhanced payments capabilities and participating fully with Payments Canada in Canada’s modernization journey.
Our strategy helps us meet the diverse needs of our clients by delivering market-focused services based on our foundational priorities:
- Modernize our systems to adapt to evolving client demands as they accelerate their digital journeys and continue to innovate their own payment experiences
- Improve transparency while enabling simple, fast, and secure ways to send and receive payments
- Enhance stability, resiliency and performance of our payments platforms as we move into the 24/7/365 real time world
- Take a digital native, client centric approach to our payment services in order make payments simpler for our customers
- Give our customers access to richer reporting and data so that they can more efficiently manage their money
What are you most excited about for the future of payments?
The world is undergoing a massive digital transformation. We have made significant investments here in Canada already, and I’m looking forward to the unique capabilities our global footprint provides us.
Scotiabank has been growing our international footprint over the last ten years. Payments modernization has provided an opportunity to integrate our platforms globally so that we can provide seamless, borderless services to our multinational client base.
We are still in the early phases of the global journey, but we are focused on building a more resilient ecosystem that provides reliability and predictability to our customers. Complimentary to this technology change, we are re-engineering our processes, helping to create better, more efficient experiences for our customers and our internal staff.
Looking to the future, there is much to be excited about in the payments space. As Canada works towards establishing the Real-Time Rail, the opportunities we see here at Scotiabank are endless. Enabling data rich, real-time payments backed by the robust foundations of Lynx will reduce reliance on highly manual processes, minimize fraud and enable faster movement of money with finality. These changes will provide significant value to our Canadian customers, and I’m excited to see how these changes will be used in new and innovative ways by our customers in the future!
