On the eve of a financial messaging sea change, industry leaders gathered in New York for the Datos Commercial and Small Business Banking Forum, where ISO 20022 migration at the crossroads of compliance, innovation, and payments took center stage.
Payments professionals examined both strategic and tactical approaches, gauging how far banks and corporates are getting with payments modernization, given the capabilities of this superior messaging standard, and what it portends.
Appearing on the panel “Navigating ISO 20022 Migration: Transforming Payments in a Real-Time, Connected World,” Rodney Nilson, Vice President of Product Management at Bottomline, said the complexities of ISO 20022 adoption -- and the innovation opportunities now possible for banks and commercial clients -- were popular topics.
Much discussion hung on how U.S. banks and FIs are rushing to keep pace with constant mandates from Swift, the Federal Reserve, and other governing bodies. It’s a lot of work, and a big chunk of lost efficiency. There’s a persistent gap, Nilson said, between meeting regulatory deadlines and leveraging new infrastructure for real business advantages.
Questions also surfaced about whether banks and FIs are getting compliant and stopping there, having met the mandate, or…if they’re actively laying groundwork for the upgraded UX, reduced fraud, and granular payments data now attainable, especially for B2B.
When Compliance Outpaces Innovation
An adjacent theme was the overlap between structured payments data and future-facing technologies like artificial intelligence (AI) and embedded banking. With cross-functional teams focused on keeping operations running smoothly, speakers and attendees acknowledged the challenge of balancing tactical needs with big-picture innovation.
Nilson said much of the focus among U.S. banks is still on regulatory deadlines rather than strategic transformation. Other panels and hallway chat revolved around meeting a swarm of mandates from Swift, the Federal Reserve, and others.
Compliance is outpacing innovation.
In the stampede to meet the November deadline, Nilson sees an irony. “This has been more of a check-the-box compliance exercise than a ‘how can this help transform my bank’s cross-border payments’ discussion in many organizations,” he said.
Most conversations are too tactical, centered on meeting minimum requirements to avoid disruption on cutover day, rather than exploring ways to profit from the new standard.
Nilson pointed out the notion that while banking leaders tend to be enthusiastic about AI and advanced data analytics, they often fail to connect the dots between ISO 20022’s deep, structured payments data and those very same innovations.
“Richer data, structured data around payments… sets the table for us to achieve so much more as an industry,” he said. Yet many have not recognized this correlation, much less acted on its abilities to speed B2B money movement, limit fraud, and improve experience.
Some Advantages of Standards
A major discussion at the forum was how ISO 20022, when aligned with API-based standards and ERP system integrations, can create much-needed payments flexibility for businesses and banks. Nilson stressed that integrating with back-end systems is far more viable when everyone rallies around a singular data model.
Adopting international standards not only streamlines integration with numerous ERPs but also enables faster third-party partnerships. “If I know that we’re all using ISO 20022 as an integration standard, it shrinks the development time,” Nilson said, as one example.
He expects this uptick in interoperability to accelerate over time, saying, “It’s like a big snowball rolling downhill. I think we’re gaining critical mass, and everyone can benefit.”
Conformity or Competitive Advantage?
Nilson warned against taking a bare-minimum approach, where legacy data is simply mapped to meet requirements. He’s a major advocate of using ISO 20022’s structured data to improve risk management, analytics, and customer experience.
“The fact that you are getting structured and richer data means that a bank can now have better insights into the payment behaviors of their business customers,” he notes.
Fraud detection gets a boost here, but it gets better. With improved straight-through processing (STP) and fewer errors, banks drive down operational costs and settlement times for cross-border payments. Richer remittance information also allows FIs to tailor new product offerings and serve clients more effectively. It’s the ISO 20022 dream.
ISO Upsides, and the Valuable Role of PSPs
Asked what sets partners apart in this new ecosystem, Nilson highlighted the advantages of a worldwide purview. “We have operations and material product penetration in the UK, the E.U., and Asia,” he said. “Our global experience provides us with an uncommon sort of knowledge base that benefits our customers in the U.S.”
For corporates, the new messaging standard means more control over cash management, streamlined global integration, and enhanced user experiences, regardless of company size. On the banking side, efficiency, fraud reduction, and next-gen services will be necessary to stay competitive as clients increasingly demand integrated digital solutions.
“The opportunity to benefit businesses of all sizes has pushed way down-market,” Nilson said. “If you’re not going to reduce fraud, your costs are going to be higher than your competitors’, and you will lose business that way,” he emphasized.
Nilson wrapped the Datos Commercial and Small Business Banking Forum 2025 in a single sentence: “Industry leaders must look beyond compliance to fully realize the potential of payment data modernization.”