As rapid and staggering technological advancements continue to redefine the world of commerce, the modernization of critical payment systems is becoming increasingly essential for U.S. banks. And as the backbone of our modern financial ecosystem, the need to transform and bring legacy automated clearing house (ACH) solutions into alignment with evolving customer expectations, standardized protocols, and regulatory requirements is now particularly urgent.

In the first of this two-part blog series, we’ll draw from Volante’s recently published white paper to uncover exactly what’s driving the urgency around ACH transformation, as well as what a truly modernized platform should look like in terms of capabilities and in the unique context of today’s rapidly shifting financial landscape.

Understanding the urgency

ACH platforms have been foundational in supporting growth and efficiency in the financial services industry for quite some time, which begs the question: Why is it suddenly so important for banks to begin transforming these systems that have served them so well over the years?

For one, the volume of transactions being handled by ACH systems is higher than ever before and only continues to grow. In the first quarter of 2025 alone, more than $22 trillion in U.S. business payments were facilitated via ACH, which translates to a 19% increase in same-day volume and a 4.2% increase in overall volume compared to the previous year. And while such growth should be a cause for celebration, many financial institutions are reportedly struggling to adapt their legacy ACH platforms to support increased demand and are facing a variety of critical challenges, including rigid functionality, a lack of advanced features, and frequent delays arising from the need for manual intervention to identify and reconcile transaction errors.

Moreover, in addition to supporting rising transaction volumes, making the shift toward significantly more flexible, scalable, and resilient ACH solutions is increasingly important for banks as they attempt to keep pace with new and evolving customer demands, as well as to adjust their operations to reflect emerging industry and regulatory standards.

More specifically, many U.S. banks today face the challenge of updating their legacy ACH platforms to support the implementation of new messaging frameworks such as ISO 20022, a process that, even if technologically feasible, is incredibly costly and time-consuming to undertake. Meanwhile, these banks must also adapt to address the growing appetite for highly advanced functionality among corporate customers, a bar that’s been set in recent years by the widespread popularity of 24/7, real-time payments, and that continues to be raised alongside ongoing breakthroughs in machine learning and artificial intelligence. In fact, those unable to modernize their ACH systems today risk not only eroding user experiences but also losing customers to alternative providers in the fintech industry, which is currently projected to grow almost 3X faster than the traditional banking sector over the next few years.

The basic anatomy of a modernized ACH platform

To be sure, the growing urgency around ACH modernization is not lost on U.S. financial institutions, and in fact, 62% of bank executives today report that they’ve already updated or are in the process of updating their systems. And while strategies will necessarily vary depending on a variety of factors, including the unique needs of the institution and the state of its existing tech stack, most banks will be looking to implement a common set of capabilities as a baseline for effective transformation.

For example, because corporate customers today leverage a wide range of different transaction channels and payment types, being able to support the use of multiple payment rails is becoming non-negotiable. This means modern ACH platforms should be capable of not only supporting all relevant payment rails but shifting dynamically between channels based on customer preferences. Moreover, due to both the introduction of new rails and rising transaction volumes, ACH systems increasingly need flexible, scalable configurations to satisfy these evolving demands in a way that safeguards against operational disruptions.

Additionally, certain capabilities won’t merely be featured but natively built into a successfully modernized ACH platform. For one, having reliable, comprehensive support for ISO 20022 data processing is becoming essential as more banks look to utilize the messaging standard and its advanced analytics tools to obtain a competitive advantage. Similarly, from a customer perspective, speed and availability are no longer differentiators but expectations in a global banking landscape increasingly defined by 24/7 access to real-time payment services. And with ACH settlement frequency and operating windows poised to expand considerably, most banks will need to abandon the costly adaptation of legacy ACH platforms in favor of new systems featuring instant, anytime payment capabilities as part of their underlying foundation.

Of course, the above represents only a loose framework of what a successfully modernized ACH system should look like, and the picture becomes much clearer once you begin to understand what it all means in the context of your operation. In part two of this blog series, we’ll dive deeper to help you better identify your institution’s needs and explore the benefits of developing a roadmap and leveraging a phased approach to accelerate ACH modernization.

Interested in learning more? Download the full white paper, Update Urgency: Why Banks Should Prioritize Modernizing their ACH Systems.