By moving to ISO 20022 message standards, the bank expects to improve the exchange of financial messages by inlaying richer data on the transfers as well as enhancing the accuracy of vetting trading parties. Individuals requiring more remittance information to be carried with the payment instruction or regulators and risk managers who want better assurance that screening and testing measures are effective will be the primary beneficiaries of this richer data.
According to Swift officials cited by businessdailyafrica.com, the higher standards will allow business managers to probe payment databases for insights into customer preferences. The update also comes with improved operational efficiencies as ISO 20022 messages will facilitate a reduction in false alarms.
CBK representatives cited by the same source revealed that the upgrade is part of the National Payment Strategy 2022-2025 and aims to modernise the National Payments System to world-class standards. They also emphasised that the bank will work closely with financial institutions to support a smooth migration to the new standards.
KEPSS is a Real Time Gross Settlement System (RTGS), which means that transactions are usually cleared and settled continuously. According to businessdailyafrica.com, in Kenya, the system is regarded as an important payment mode due to the value of transactions it processes and the impact it has on the country’s economy.
In order to support large value transfers between banks, KEPSS offers real time funds transfers and simple payments processes. Furthermore, the system supports fund movement between cities while allowing customers to verify the position of funds in real-time.
According to the Kenya Central Bank governor cited by Reuters, Kenya is in talks with the International Monetary Fund to receive a financing boost that would support the country’s falling foreign exchange reserves. Reuters further reports that Kenya’s economy has taken a hit due to the COVID-19 pandemic, the war in Ukraine, and the tightening of global monetary policy.
Some market participants have looked at the country’s debt, compounded by a weakening local currency and international market turmoil and speculated that Kenya could follow countries such as Ghana and Zambia into default, even though the Kenyan government rejects this scenario. At the time of writing, Kenya expects at least USD 1.2 billion in financing between April and May 2023.
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