By Christophe Vastesaeger, Product Manager, Smart Payments
Why do payment exceptions still take days to resolve even as settlement speeds accelerate?
The global payments landscape has evolved dramatically. Settlement speeds have improved across many corridors, in some cases dropping from 96 hours in 2019 to just 24 hours in 2024, yet resolution times for exceptions and investigations (E&I) have remained essentially unchanged at around 200 hours end‑to‑end.
This widening gap between payment speed and resolution speed has become one of the most persistent operational challenges in financial services.
The root causes: why exceptions remain slow
- Too much free‑format, unstructured data
More than 72% of cross‑border E&I messages still rely on free‑form data fields, primarily MT199 and MT299. Without structured data, institutions must manually interpret ambiguous requests, causing delays. - Heavy dependence on manual touchpoints
An average investigation involves 5–10 manual touchpoints, including chasers, follow‑ups, validation checks, and email-based clarification cycles. - Opaque processes for both banks and clients
Institutions often wait 1–5 days to receive updates from counterparties, leaving customers without real‑time visibility and increasing dissatisfaction and attrition. - High operational and liquidity cost
Inefficient E&I handling contributes to up to $20 million per year in operational cost and penalty exposure for large institutions.
ISO 20022 is changing what’s possible, but only if banks use it fully
The shift to ISO 20022 introduces structured, enriched data formats that finally allow:
- Cleaner initiations
- Higher-quality validations
- Clearer routing
- More efficient automation across the investigations chain
ISO 20022 adoption is accelerating around the world, with many markets mandating structured data for compliance, transparency, and STP improvements.
But richer data alone doesn’t fix processes that still rely on manual effort, fragmented workflows, and inconsistent operational standards.
The industry direction: clarity, standardisation, and orchestration
Many institutions are now looking beyond message formats and towards centralised, structured, and ISO‑native orchestration of the investigation lifecycle, reducing friction, shortening delays, and improving customer experience.
Industry solutions, including Smartstream’s Smart Payments, are emerging to provide lightweight, ISO‑native orchestration layers that enhance clarity, structure, and tracking across multiple rails and counterparties, without requiring a core replacement.
Payment settlement has become faster.
But exception handling won’t improve until institutions embrace structured data, reduce manual dependencies, and orchestrate the investigation lifecycle with greater transparency.
Faster payments demand faster answers, and the industry is finally moving toward delivering both.
To find out more, visit our solution overview for Smart Payments.
