ISO 20022 is the emerging global standard for payments messaging. It creates a common language and model for payments data across the globe, which provides higher-quality payment information than other standards and adapts to new needs and approaches.

Many Market Infrastructures, including SWIFT, are moving their messages to ISO 20022 over the next 2 years. Clearing House Automated Payment System (CHAPS) and TARGET2 Euro payment (T2) are on track for delivery, plus SWIFT will adopt the rulebook of the Cross-Border Payments Reporting (CBPR+) working group, where there will be a coexistence phase of MT/MX messages up until 2025. Within five years, it’s predicted that around 80% of high-value global payments by volume and 90% by value will have migrated to ISO 20022.

The challenges will be multiple and grow with time. Until you are ISO 20022 Native, you will need to manage translation, enrichment, and a co-existence of standards with counterparties and across your back-office systems. It will increasingly be difficult to manage the data required in ISO 20022 in the legacy standards.

  • Global interoperability across all operators
  • Rich remittance data - up to 140 characters of unstructured or structured reference data
  • Increased data quality through enhanced structure and granularity, reducing manual intervention and improving decision making
  • Uniform and reusable terms and message components - easily tweaked and amended to handle payments globally across other banks/countries
  • Harmonization across payment systems and payment types: over 70 countries have already adopted ISO 20022
  • A base for innovative service offerings and products
  • Lower overall operational costs: XML simplifies development, maintenance, and support

  • Leverage ISO 20022 and APIs as the standard for data exchange in payments within the applicable regulatory and compliance regimes
  • Achieve higher automation, enhanced STP, and redesigned processes, all with the goal of reducing friction
  • Reduce costs by dismantling obsolete legacy applications
  • Increase the effectiveness of fraud detection and prevention measures
  • Improve insight into the business purpose of customer payments as a base for innovative value-added services
  • Develop new integrated consumer-oriented services and products to meet the increasing demand for speed, transparency, and granular tracking information

A simple connectivity upgrade can be completed at a relatively low cost and over a few months. However, it is the wider impact of ISO 20022 that needs to be considered. Payment, Screening, Matching, and Monitoring Systems need to be able to support ISO 20022 and the additional data elements and increased structure and granularity. This will require upgrades, development, and project work to improve static data. This work will vary enormously by institution.

Data will be more extensive and structured. This will allow for greater accuracy and more relevant information to be passed with transactions. Allowing banks to ensure better compliance through more comprehensive and accurate monitoring.

Technically there is more data to hold, process, and exchange. As a standard, it is more flexible and allows for more data to be exchanged. Market Practice will be key to ensuring that there is consistency in what is expected for transactions in each market. Along with global alignment through such groups as HVCS and CBPR.

Most institutions will be technically ready to receive ISO 20022 in 2023, but many will still be processing in the legacy standards. We will then have a multi-year period of co-existence as markets and participants move over to using ISO 20022. We may see a slow take-up in the beginning and then a snowball effect as main markets and players start to send and ask to receive ISO 20022.

Starting to use ISO 20022 is not the end of the journey. Once participants are familiar with the standard, this will then be the catalyst for the introduction of more structured information. This will then be the beginning of the real benefits of adopting ISO 20022.


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