As with any changeover, some banks have progressed further than others in their implementation of ISO 20022. At Sibos in October, Swift reckoned around 28% of payment volume had migrated to the new standard and Celent’s most recent survey suggested around 22% of banks would not make the November 22 deadline, although those on track were estimated to account for at least 95% of total payment volumes.
A fragmented path to standardisation
For US banks, the Fedwire migration deadline was recently extended to July 14. “The Federal Reserve’s readiness dashboard highlights substantial industry preparation, indicating that financial institutions are generally on track,” says Mihail Duta, director solution consulting transaction banking at Finastra.
This format will allow more automation, fewer exceptions due to more structured data, easier exception management due to more focused data, greater transparency and more speed
Mick Fennell, business line director in payments at Temenos, is more concerned, suggesting there are still many organisations who have not made the necessary migrations or upgrades required or have taken a superficial approach to achieving compliance, using translation technologies to manipulate message data and thus insulate existing legacy solutions from major change.
Banks are encountering internal hurdles in the implementation of ISO 20022, yet many remain cautious about discussing these challenges openly. While institutions often approach the process in isolation, viewing their difficulties as unique, these issues are, in practice, common across the industry. That is the view of Anish Kapoor, CEO of AccessPay, who says the lack of inter-bank communication and transparency around system changes is creating additional complexity in the payment ecosystem.
It is also unclear how many of the messages referenced by Swift in October were generated natively from banks’ applications, since translation services may have been used.
Banks racing against the November deadline
“Swift’s recent introduction of a contingency service to allow banks who are not ISO 20022-ready to continue using MT messages for payments after November – albeit at an extra cost – signals that there is a significant risk that not all banks are currently on schedule,” says Richard White, head of trade finance at Commercial Banking Applications (CBA). “The emphasis for now appears to be on migrating payment messages, with less focus on migrating cash-management messages to the new format.”
Frederic Viard, principal product manager, financial messaging at Bottomline, also cautions that there is a need to allow a significant period for testing and resolving issues. The extent to which banks are using the extra data available in payments messaging to create new services or refine existing offerings also varies. Those focused primarily on compliance risk miss the broader opportunities for innovation and operational efficiency.
Unlocking the potential of ISO 20022 beyond compliance
Nadish Lad, global head of product and strategic business at Volante Technologies, observes that some banks have tapped into this data to create predictive analytics tools while others are leveraging the enhanced visibility provided by ISO 20022 to improve risk-management practices, offering real-time fraud detection and proactive mitigation strategies.
Banks’ master data systems contain party data in an unstructured database, which makes it difficult for banks to provide structured and granular party data in payment messages.
The richer format will help in many areas without necessarily being a new service, agrees Bottomline’s Viard. “This format will allow more automation (ISO is an end-to-end machine readable format), fewer exceptions due to more structured data, easier exception management due to more focused data, greater transparency and more speed,” he says. “Major players in the payments space have already started to leverage the richer ISO format in areas such as sanctions screening, remittance information, fraud protection and compliance.”
ACI Worldwide has seen some institutions offering different fee structures based on the purpose of the payment and increased use of structured remittance. “We have also seen expanded use of party information in select use cases for account-to-account payments,” adds Adam Needel, senior principal product manager.
Banks would ideally be immediately using and benefiting from the richer and more granular data associated with ISO 20022, but this can be difficult to achieve in practice. White at CBA notes that in Iceland, for example, all banks use a national record registry system for importing the address of their customers, but since this registry pre-dates ISO 20022, it does not include all the structured address fields that Swift recommends the banking community use.
“In other cases, banks’ master data systems contain party data in an unstructured database, which makes it difficult for banks to provide structured and granular party data in payment messages,” he adds. “Interestingly, Swift has addressed this to a certain extent by introducing a semi-structured (hybrid) address option from November 2025, which is a more pragmatic solution than the original plan to mandate the use of a fully structured address option.”
In many cases, account-to-account payment systems have been in place for some time and making large-scale changes can cause problems due to lack of domain knowledge where staff have left or even retired since the last major change.
The critical role of training
Effective training and awareness programmes for ISO 20022 should focus on building technical expertise, demonstrating practical applications and fostering adaptability, suggests Lad at Volante Technologies.
Bank employees will be exposed to significantly more data in a payment, so they need to know what that data means
“Bank employees will be exposed to significantly more data in a payment, so they need to know what that data means,” he says. “Practical examples of ISO 20022’s benefits, such as enhanced customer experiences and streamlined workflows, have to be integrated into training to help employees understand its value. Change management is equally important, equipping teams with strategies to adapt to new workflows and integrate the standard into existing systems without disruption.”
According to Viard, training programmes must be shared not only within IT and messaging teams but across payments, web portal, mobile app, operations, compliance reporting, audit and nostro reconciliation functions. AccessPay’s Kapoor recommends avoiding technical jargon and helping employees understand that ISO 20022 implementation is an evolving journey that will continue for at least three to four years.
Beyond the data standards and their operational impact, organisations should also focus on enabling their technology groups to understand how best to support the necessary DevOps processes. DevOps is a methodology that combines software development and information-technology operations to improve and speed up the software development lifecycle.
“This includes maintaining the capability to continuously update their environments and improving data management practices, but also how they manage and create better access to the data for both external transparency and improved internal analytics,” says Fennell at Temenos.
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