Migration to the new ISO 20022 payment standard has been widely anticipated for several years. With expected benefits like rich data and improved operational efficiency, financial institutions around the globe have been making internal changes to support SWIFT’s new standard.
Although individual institutions have been able to exchange ISO 20022 messages on an opt-in bases since August, the full migration launch date of November 2022 has been delayed, following recent changes announced by the European Central Bank. In October, the ECB announced their decision to delay ISO 20022 migration of the Eurosystem until March 2023.
Following the announcement by the ECB, SWIFT followed suit, confirming the migration date will be moved from November to March, aligning with the ECB. Citing their reasons for the change, SWIFT said: “An overwhelming majority of our global community has requested that Swift align the start of the global ISO 20022 migration for cross-border payments and reporting (CBPR+) with the ECB’s updated timetable to ease implementation. In response, we have taken a decision to accommodate this request, and Swift will begin the ISO 20022/MT coexistence period for all users on 20 March 2023.”
At the same time, it is clear from our community feedback that there is strong momentum across the industry to implement and gain value from ISO 20022 rich data, so the revised start date of 20 March 2023 will be definitive. Financial institutions are therefore encouraged to continue preparation for the 20 March start date and consider all potential scenarios in their planning to ensure readiness for the start of ISO 20022 coexistence for CBPR+ from that date.”
Financial institutions that want to capitalise on the benefits of rich payment data can still choose to exchanges messages in the ISO 20022 format on an opt-in basis.
Preventing fraudulent activity with better quality data
ISO 20022 is becoming THE common global language used by financial institutions. It is a standard for exchanging electronic messages between financial organisations, it enables structured rich data to be sent and interpreted correctly by both parties.
The rich payment data in new ISO 20022 messaging standards helps to prevent, detect and respond to criminal activity in the financial system. Regulators like AUSTRAC (Australian Transaction Reports and Analysis Centre) and FMA (Financial Markets Authority) need to know if the AML/CTF reports submitted contain full and quality data and using a universal structure will help more data to be captured.
ISO 20022 allows for the expansion and addition of information fields that can help to facilitate payment tracking and verification and can help with the mitigation of fraud. The fact that the ISO 20022 fields are highly structured also means it also supports greater automation of AML/CFT monitoring and sanctions screening, which is great for fraud prevention.
At Identiti we know that this can be hard especially if you’re using legacy systems and manual processes.
ISO 20022 more than payment standards
The adoption of ISO 20022 will transform and future-proof payments send and receive data. Now provides an outstanding opportunity for all FI’s to review their internal systems too. Aligning internal systems will enable the best organisation to capitalise on the change to ISO 20022 and ensure that value can be fully provided to the regulators and used within the FI for future product development.
Want to future-proof your reporting processes with ISO 20022?
Identitii can help you to use SWIFT FIN or ISO 20022 file formats (MT or MX) via SFTP or low touch integration, to transform them into the formats for regulators. Learn more about our platforms here.