The Lynx journey continues: a Q&A with RBC

Published: April 5, 2022

Headshot of Jason Sweeney from RBCPayments Canada launched Lynx, Canada’s new high-value payment system in summer 2021. The organization is gearing up to implement a second release of Lynx in late 2022 which will introduce ISO 20022 with the implementation of the Lynx MX payment messages. This implementation will assist Canadian financial institutions in meeting SWIFT’s ISO 20022 global requirements and will set the foundation for payment innovation to take place in Canada over the coming years.

RBC is a long-standing participant in Canada’s high-value payment systems and, along with the other 16 Lynx participants, has been hard at work preparing for Lynx Release Two. Learn more about RBC’s experience through the lens of Jason Sweeney, Senior Director Enterprise Payments at RBC. As the Canadian representative on SWIFT’s Payments Market Practice Group (PMPG) and a member of Payments Canada’s Lynx MX Management Committee, Jason also plays a role in providing leadership and oversight to support the design and delivery of Lynx Release Two.

We recently marked six months since the launch of Lynx. Can you share any learnings from the first few months of Lynx operations? 
The launch of Lynx Release One in 2021 was the manifestation of years of hard work at the industry level and internally at RBC. In reflecting on the first few months of Lynx operations, it’s clear that the proactive change management routines put in place – such as modeling of liquidity needs and the re-engineering of end to end operational flows – have been critical to allow the community to seamlessly migrate from LVTS to Lynx. The operational routines put in place to support the risk model have functioned as expected, and as a result, we are seeing payments flow at the same velocity as prior to Lynx.

We are also closely monitoring the overall liquidity impact to determine the funding needed to support an acceptable rate of payment processing. In the early days, the efficiency related to the liquidity savings mechanisms deployed with Lynx has been masked by the value of liquidity within the system. That said, we have put in processes to pressure test the liquidity efficiency of Lynx, and we are happy with the results we are seeing. As we continue to navigate changing monetary policy, we will have a greater opportunity to see the efficiencies of the clearing engine.

How is RBC preparing for the second release of Lynx?
RBC is an industry leader in this initiative, and we’ve invested in a dedicated Payments Modernization program to help support successful delivery of the ISO mandate through extensive resource engagement across industry forums and internal delivery teams. To build upon the success of the first release of Lynx and to prepare for the second, we are continuing to develop our critical core capabilities in order to deliver the best payment services to our customers, while also keeping transactions safe and secure.

For this release, there is also greater focus on how the ecosystem must handle things consistently across the financial institutions, given that ISO 20022 is new to us all. RBC has been engaging with our peers earlier to share insights and best practices around things like test cases, operational impacts, or exception handling, and to ensure overall readiness.

The November 2022 release will be a huge milestone in our domestic and global journey to modernize the payment experience. At RBC, we’re committed to making this transition as smooth as possible and to providing an exceptional client experience as we continue to deliver faster, more convenient solutions to our personal, business and institutional clients.

What does the introduction of ISO 20022 to the Lynx system mean to your organization?
For RBC, the introduction of ISO is an opportunity to enable new, more innovative client experiences, while also improving compliance and efficiency.

ISO 20022 significantly improves the quality of data exchanged across the payment ecosystem by enabling key data, such as invoice details, sender messages, or other contextual information, to travel with each payment. Richer, structured, meaningful data unlocks a variety of new functionalities and efficiencies –for example, businesses can now automatically reconcile transactions, allowing them to simplify, streamline and save time on the payment process.

On top of this, businesses will also be able to leverage this data to modernize how they operate and innovate for their customers. Our customers already trust us to do the financial entries – and the introduction of ISO 20022 to Lynx now means we can offer them so much more. As we look to the future, this release serves as an important foundation and provides more flexibility for us to innovate and integrate with advanced technologies and different payment infrastructures as our clients’ needs and the global payment landscape evolves.

What value will the introduction of ISO 20022 to the Lynx system deliver to our member financial institutions and Canadians more broadly?
By addressing key friction points within the payment experience, the introduction of ISO 20022 to the Lynx system will open the door to transforming the way we think about the payment experience today.

The ability to have a common payment standard that allows for interoperability across different jurisdictions and domestic payment rails is a fundamental game-changer for how we execute payments. It sets the stage to have payment information pass seamlessly between payor and payee with no loss of vital payment information, even while potentially crossing jurisdiction and payment rails.

This addition of structured rich data enables efficiencies across the end-to-end payment ecosystem, reducing the effort and expense associated with the processing, reconciliation, and investigation of payments. For business owners and Canadians more broadly, this will translate into significant time and cost savings for them as it becomes easier, faster and more convenient to make payments and to reconcile accounts.

How does your role on SWIFT’s Payments Market Practice Group (PMPG) and the Lynx MX Management Committee help bridge the gap between global ISO 20022 work and the work being done as part of Lynx Release Two?
The Lynx MX Management committee brings industry coordination and direction to the Lynx project, and it’s an honour to be working with so many talented committee members to transform the payment experience in Canada.

A key guiding principle of the Lynx program is to align as much as possible to the global SWIFT ISO 20022 standards. Being part of the Payments Market Practice Group allows me to bring insight from other jurisdictions and provide context around the global direction of ongoing ISO 20022 deployments. Not only does this line of sight support the overall dialogue within Canada and add to our domestic viewpoint, but it also allows us to share the Canadian point of view to the global stage. By sharing Canada’s overall ISO 20022 roadmap and direction with this audience, we can ensure the global community understands the Canadian modernization plan.

In your role at RBC, you have witnessed a great deal of change in payments. What are you most excited about for the future of payments?
What excites me the most is the ability to thoroughly re-imagine the payment experience for our clients. Payment modernization is an industry wide, multi-year and multi-networked initiative that envisions a Canadian payment ecosystem with safe, data-rich payments. A key aim of this initiative is to spur innovation, and we are now at a unique time in which we have the ability to build upon our services and re-imagine the capabilities wrapped around the payment life cycle.  This allows us to expand our offerings to our clients, and to support them in fundamentally changing the way they do business and in creating better, more efficient experiences for their own clients.

The payment ecosystem and experience has undergone significant evolution in my time at RBC and over the course of the 25 years I’ve worked in this space. However, the changes we’re making now are truly transformational and the scale is unparalleled from a global and domestic perspective. I am very excited to be part of this transformation, and I think our clients and community can look forward to a more powerful, efficient and convenient payment experience.