Due to go live in 2018, the new technology systems will replace CBI’s current mainframe-based solutions for high- and low-value payment systems, which have been in place since 2001.
For SIA, the mandate represent its first implementation of an instant payment system managed entirely by a central bank.
The project will also involve Perago, a wholly-owned subsidiary of SIA that specialises in solutions for central banks.
Perago will provide its real-time gross settlement system, which will be integrated with its Instant Payment and Payhub solutions.
CBI will also move to a single system that has the capabilities to process different types of payments in different ways, while ensuring that transactions can be exchanges using a single domestic messaging standard.
According to the bank, the technology upgrade is part of a move towards a more strategic, modern and cost-effective infrastructure. CBI manages all inter-bank payments in Iceland, processing up to a million payments per day, with a peak of 160,000 per hour.
Guðmundur Tómasson, director of financial market infrastructure at CBI, said: “We look forward to using SIA’s systems, which will also enable us to cooperate closer with our Nordic neighbors in this field.”
Massimo Arrighetti, CEO of SIA, added: “We are honored to have signed this agreement with CBI, confirming us as leading provider for central banks in the Nordic region after Sweden, Norway and Denmark.”
SIA technology is now used in 15 central banks across Europe, Africa the Middle East and Oceania.