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What is ISO 20022?
MT Messaging is being replaced by IS0 20022 financial messages, which provides rich data with each transaction, enabling everything from enhanced analytics to status tracking, sanction checking and automated invoice reconciliation – all whilst delivering an enhanced experience for end customers. The global ISO 20022 standard for financial messaging also reduces fragmentation and improves interoperability on key services such as instant payments - domestic and cross-border, Open Banking, API platforms and other overlay services.
Why do you need to prioritise migration to ISO 20022?
IS0 20022 has already been adopted in 70 countries to replace domestic or legacy formats including China, India and Japan. Euro 1 and STEP 2 (SEPA) are on track and Target 2 has testing milestones in place, plus SWIFT will adopt the rulebook of the CBPR+ working group.
Although the European Central Bank (ECB) has formally approved a one-year extension to its Target 2/EBA Clearing hard migration date from November 2022 to March 2023, there is still considerable time pressure as the following 3 years will also see the start of the co-existence period for SWIFT and the migration of all the remaining major markets (e.g. Bank of England following suit in 2023 with CHAPS etc.) with all major reserve currencies (Euro, USD, GBP) onboard. This will represent the ‘new norm’ for high-value payments supporting a predicted 80% of volume and 90% of the value of transactions by 2025.
How can I migrate to ISO 20022?
The first step is to analyse where your institution is now:
What data do you have and what does this look like in the new standard?
How close are you to the new market infrastructure requirements?
What do you need to do internally to ensure you are ready to set ISO 20022 ‘live’ - e.g. an increase in capacity/bandwidth may need to be incorporated.
Is a hosted solution possible? This will allow you to reduce your investment in infrastructure and minimise the impact on daily operations during the programme.
The answers to these questions will tell you the scope of this project. Every institution is different and early visibility of your current position is a critical first step.
How can Bottomline help me choose a tailored solution for my business?
We can leverage our global experience, in particular the 2015 Swiss SIC migration to ISO 20022, to forge a best practice approach. This will involve assessing your institutions unique challenges in order to build a tailored strategy that will help with a speedy and effective migration.
On the whole, there is value in your financial institution considering a phased approach or ‘minimal functional requirements’ remit for the ISO 20022 adoption/migration, that has the agility for you to optimise in the immediate future - especially if your bank is participating in different payment market infrastructures and correspondent banking schemes. To manage the processes, the resources and the costs, it helps for you to break up the changes/upgrades into manageable pieces of work that will run either concurrently or in sequence.
At Bottomline we are facilitating this approach to minimise the impact on our customer’s current processes, whilst maximising the new value-add opportunities and operational efficiencies.
Explore multiple options for connectivity to the SWIFT Tracker that meet each customer’s strategic objectives.
Sibos is one of the biggest events of the year for the transaction banking industry. This episode on the Payments Podcast features Marcus Hughes discussing some of the key points of this year’s event, specifically on ISO 20022, gpi, APIs and Real-time Payments.
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