November 14, 2022

Canada’s RTR system and how to be well equipped for the smooth transitioning and migration of data onto the ISO 20022 standard.

Rail to Rail payments (RTR) is the new revamped core payment infrastructure of Canada that is set to be adopted by mid 2023 and will be overlaid onto the ISO 20022 financial messages standard. By implementing RTR, Canada’s aim is to help it’s Financial Institution’s be at a better position to compete with Fintech’s and offer just in time processing capabilities for payments.

By the very nature of how RTR is being structured and how the planning process for implementation is spanning out, some of the benefits right off the bat are easily understandable such as more data-rich payments, a more efficient supply chain due to no delays in processing payments, and last but not least faster receivables reconciliation.

Although consumers, businesses, and governments across Canada will migrate onto the RTR framework and be enabled instantaneous payment mechanisms, some of the concerns being raised around early adoption of this technology are as such:

• Data is the fastest growing thing on the planet undisputedly and RTR will allow faster payments, however is our legal/regulatory framework fast enough to ensure privacy compliance and smooth sailing for all parties involved in a transaction?
• RTR payments will be irrevocable in nature meaning no reversals of any kind hence are their mechanisms in place to detect anomalies/report inherent risk of a transaction in real time?

The Digital Charter that has come into play in Canada has articulated a principled approach to Digital and Data transformations, and one of the few key amendments they have stated that are to be made to PIPEDA include

1. Enhancing control and transparency that Individuals have over their personal information

This is how we here at Ameerz can help you with regards to this PIPEDA requirement:

• By harnessing the power of our bot privIC, Ameerz can help your Financial Institution come up with internal workflows that will enable the FI to answer queries from customer’s such as what data of mine do you have?
• Also by conducting accurate data asset discovery, auto tagging, and linking sensitive Pii and Pci data to a particular Individual, Financial Institutions will be better equipped to handle complaints and issues related to Express Consent that are so often a cause for bad press.
• Promotional/marketing campaigns can be more targeted by virtue of better quality data and a faster payment infrastructure, however as a result there is a dire need for the entire process to be more compliant. Thus, our bot privIC will allow/enable every employee with relevant user permissions in your organization to be made aware of what data was taken from what customer and for what intended purpose all through a unified dashboard.
• RTR payments are irrevocable meaning once they are sent then there is no control over reversal, having said that the need for Ameerz Anomaly Detection service is critical as our bot privIC will be able to by virtue of integrations with the various players involved in RTR be able to instantaneously highlight if a certain payment is not quite right and should be flagged instead of processed in real time.

In conclusion, RTR and the ISO 20022 framework will change Canada’s banking sector tremendously and the goal of interoperability amongst various systems and banks globally will slowly start to become a reality, therefore it has never been a better time to break down the data silos that exist around product development within banks today, and to truly transition towards successfully harnessing the power of cross-cloud analytics that will empower more streamlined processes and ensure overall better customer/client satisfaction rates for banks.