Delay in ISO20022 - what changes, what remains and what next?
FIs and banks, both big and small surely face the complexity involved in delivering ISO20022 changes in harmony. For some, it may be scaling and others, the very risk. This is one of the many reasons Swift has confirmed delaying their original migration date for cross border payments by 12 months, i.e. November 2021 to November 2022 - the end date remains the same. Note: the change will be limited to cross-border payments and cash reporting businesses only.
What remains unchanged?
- Percurrent plans -TARGET2 and Euro system Market Infrastructure Gateway (ESMIG), Bank of England (new RTGS) and other MI initiatives will not be affected.
- MT category 1, 2 and 9 messages used in cross-border and cash reporting payments will be decommissioned in November 2025. So MT messages can be sent, do understand the implications.
What changes at the end of 2022?
- The MT standard will be supported for backward compatibility purposes only. New developments will be based on ISO20022 data and will require institutions to implement structured data capabilities.
- FIs will have the option to send and receive MT or ISO 20022. ISO 20022 users will also have the choice of the InterAct FINplus messaging service or APIs.
- FIs with high transactional volume will be expected to be early adopters of the standard.
What next?
- We can expect a solution from Swift to maintain complete data for transactions centrally, relieving institutions in a payment processing chain of the obligation to pass on complete data and eliminating the problem that intermediaries may ‘break the chain’.
- Use of the existing MT standard for cross-border and cash reporting will be extended by a year, exception basis.
How to benefit from this delay -
- Data remediation: Data is the key to this migration. Fix the static data and store it in structured MX formats.
- Channel Improvement: Review and implement the changes to be in line with the data requirements.
- Operational Readiness: Conduct multiple training sessions, build online guides explaining the necessity of data and the change in messaging.
- Infrastructure - Review the requirements of data storage and the ease of extracting the data.
- Assess the usage of AI and ML - Review the need for existing projects, are they going to be effective in the new format?
- Resourcing - In a period of cost-cutting / saves, invest in valuable resources today. Review the requirements across departments (not limiting to payments or sales), both at the front end and outsourced environments.
Communication - https://www.swift.com/standards/iso-20022-programme/timeline