The countdown for the FedWire migration has not only started but is well underway. While some banks are prepared, evidence suggests that many banks are either in denial that it will happen or are unaware of the size of the task that lies ahead of them. No existing solution today will work after March 2025. And with the deadline realistically being 2024 and not March 10, 2025 at this late stage, how can banks ensure that they will still be able to offer Wires?
Put simply, not doing anything is not an option.
This puts these laggard banks—and their partners—in a precarious position. There is no plan B. If banks can’t send and receive the new format, they won’t be able to use Wires. Yet many banks haven’t considered what will happen if their counterparties can’t send or receive either. Then what?
The challenge now is how all these banks get ready in time. While the deadline may be March 10, 2025, that’s for going live. Before that, banks will have needed to have completed testing prior to the Fed’s Go/No Go date of February 21, 2025. Given the sheer volume of banks that will be testing, getting ready as soon as possible, likely in 2024, is paramount.
And that means starting now.
The key to success will be being smart in the vendor selection process and moving as quickly as possible without compromising future plans. In reality, the deadline firms the choices up quite quickly, as only a cloud-based or PaaS solution is likely to meet the timelines required.
