For all the promise that ISO 20022 holds – streamlined processes, richer data, automated reconciliations and, ultimately, lower operational costs – the journey to get there comes with a price tag.
In early 2023, Celent estimated that banks had already poured more than US$100 billion into preparations for the new messaging standard. Once corporate spend was factored in, the number ballooned to a staggering US$2 trillion. And that was just the beginning. With the November deadline looming, institutions continue to invest in ensuring requirements are fully met.
Euromoney examines the state of ISO 20022 readiness among major global banks: how far they’ve come; the decisions they’ve made; and what’s left to do as the industry closes in on full adoption.
JP Morgan Payments went live with the first phase of ISO 20022 in March 2023 to support clients during their own migrations, explains Colin Williams, head of clearing transformation, who says the bank currently accounts for about 30% of ISO 20022 cross-border payment message traffic sent over Swift. “Our systems were all enabled to natively process the new format messages, whilst also being able to handle any legacy MT messages that were still being sent across the network,” he says. “We also successfully migrated in support of each market infrastructure (central bank high-value clearing system) that has adopted ISO 20022 messages.”
As the industry approaches the end of the coexistence period for legacy systems, it is crucial for banks and corporates to collaborate closely
Citi has implemented a bridging solution with an ISO transformation layer on the existing payment product processors, which coordinates the migration across platforms, including Swift and payment market infrastructures. In parallel, the bank is transforming payment processing by adopting ISO native solutions with a calibrated approach to existing legacy payment product processors.
BNY created a dedicated ISO 20022 migration team to address issues around technology, operations readiness, testing, compliance, client communication and support. The bank took this opportunity to transform its core payment applications to support native ISO, reducing the risk of data truncation that would have resulted from translation. The transformation extended to other elements of the business including cash investigation systems, client databases and screening tools. Previously, the limited number of dedicated message types for certain transactions, lack of structure, absence of key payment actors, limited field space and lack of identification fields led to regular misuse of messages by the Swift community, resulting in rejects, repairs, longer processing times and complex sanction screening processes.
“With ISO 20022 and the introduction of Swift’s transaction manager and case manager platforms, the community can expect easier resolution of investigations and compliance with local regulations,” says Isabelle Bouille, director and principal product manager at BNY. “They will benefit from more structured and richer data, although these benefits will not be measurable for a few more years.” Current traffic analysis shows that ISO 20022 messages are used similarly to FIN MT messages, commonly referred to as the ‘like-for-like’ approach.
We have developed a new ISO 20022-native payments platform which will play a definitive role in how we support the new standard
Scotiabank has implemented significant changes to its infrastructure with ISO 20022 embedded, enabling global channels to integrate with its payments infrastructure using common services. The bank continues to work with Payments Canada and Swift for testing and readiness activities. “As the industry approaches the end of the coexistence period for legacy systems, it is crucial for banks and corporates to collaborate closely,” says Matthew Parker-Jones, senior vice-president and global head of product management, global transaction banking at Scotiabank. “We have partnered with other financial institutions on testing activities to ensure that the additional structured data we send with payments is not only accurate but also consumable by our partner financial institutions.”
Lloyds is another bank that used this opportunity as a broader modernisation opportunity. Efforts to support the migration to ISO 20022 have been underpinned by the bank’s existing digital transformation and investment in innovation, observes Rogier van Lammeren, managing director, head of trade and working capital products. “Through this, we have developed a new ISO 20022-native payments platform which will play a definitive role in how we support the new standard,” he says. “We are already in the process of transitioning our international payment flow across to this platform.”
BNP Paribas is currently focused on ensuring a smooth transition by November 2025 for MT103, MT202 and MT202Cov to their MX counterparts. Regarding corporate-to-bank messages, which are not directly part of the interbank migration to ISO, the bank will continue to accept MT101 messages after November. However, the bank continues to encourage its customers to migrate to pain.001 messages to comply with the upcoming structured address requirements.
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