77% of Banks Prioritise Compliance over Payment UX

Why It Matters

Prioritising compliance over experience raises operational risk and inflates costs, limiting banks’ ability to compete on service quality. The shift forces costly legacy upgrades and could reshape the European payments landscape.

Key Takeaways

• 77% banks favor compliance over payment user experience
• 67% spend more time on regulation than UX improvements
• 60% claim legacy infrastructure can’t keep pace
• 81% expect unified messaging hub essential for compliance
• ISO 20022 migration caused downtime for one in five banks

Pulse Analysis

Regulatory pressure is reshaping European banks’ payments roadmaps, with compliance now eclipsing customer‑centric innovation. The Aqua Global study shows that a majority of institutions are allocating resources to satisfy AML, sanctions and emerging data mandates rather than polishing the checkout experience. This trend is amplified by the ISO 20022 migration and the imminent shift to T+1 settlement, both of which demand richer, structured data and tighter reporting timelines. As a result, banks face heightened operational risk, potential service disruptions, and reputational exposure if they miss critical deadlines.

Legacy payment platforms, many built on monolithic architectures, are struggling to ingest and validate the new data fields required by regulators. Fragmented data stores and outdated messaging standards create bottlenecks that impede real‑time monitoring and increase the reliance on costly translation tools. Respondents highlighted that 81% consider a unified messaging hub across channels essential to achieve the necessary data governance and resilience. Investing in modern, API‑first infrastructures can consolidate transaction data, streamline compliance checks, and reduce the complexity that currently fuels operational fragility.

The strategic implication for banks is clear: short‑term compliance workarounds inflate costs and erode competitive advantage, while a proactive modernization agenda can deliver long‑term savings and a differentiated customer experience. Institutions that replace legacy stacks with scalable, cloud‑native solutions will not only meet regulatory milestones more efficiently but also unlock the agility needed to innovate payment products. In a market where speed and trust are paramount, aligning compliance with technology transformation is becoming a decisive factor for future profitability.