SWIFT’s In-flow Translation service plays a central role in helping financial institutions adopt ISO 20022 for cross-border payments at their own pace. Learn more about Rabobank’s experience.
Rabobank has been a cooperative bank with a mission since its founding. Instead of shareholders, the bank has over two million members, making it one of the biggest cooperatives in the Netherlands. Rabobank serves more than 6.7 million retail and 800,000 business customers in the Netherlands with a comprehensive range of financial products and services. It also has sizeable international banking operations. Present in 40 countries and serving approximately 10 million customers worldwide, they focus on international business and rural activities in general and the food and agriculture sector in particular.
Starting in November 2022, SWIFT will enable ISO 20022 messages for cross-border payments and cash reporting (CBPR). This will be via go-live on the associated CBPR+ usage guidelines. As of this time, there will be a three-year coexistence period for MT and ISO 20022 (MX) message types. This allows early adopters to benefit from ISO 20022’s richer, structured data, and other banks to adopt at their own pace. During the coexistence period, the In-flow Translation service will facilitate interoperability between users of MX and MT.
Like many banks, Rabobank has a number of back-office systems that it won’t move to ISO 20022 from the start of the adoption period. This is because those systems will either be decommissioned in the short or mid-term, or they will eventually migrate but not as from day one. During the coexistence period, Rabobank needs to ensure that these back-office systems can continue to transact as normal with counterparties who decide to send them ISO 20022 messages.
Why Rabobank has embraced In-flow Translation
The In-flow Translation service translates ISO 20022 messages into the existing MT format for banks that are not ready to process ISO 20022 messages immediately – and it ensures both message formats are delivered so customers always have the complete data.
“When SWIFT approached us to join the In-flow Translation pilot, in April 2021, the main reason we wanted to join and start testing was to get experience with ISO 20022 messaging on Alliance Access, specifically using FINplus for CBPR+,” says Paul de Blok, Business Analyst at Rabobank. “It was a way for us to start testing and gain the experiences that we’ll need before November 2022.”
“We decided it would benefit us to be on board with ISO 20022 In-flow Translation as quickly as possible,” adds Rob Louwerse, IT Lead and Road Manager for the ISO migration at Rabobank. “It allowed us to put a translation solution in place for our CBPR+ messages. We could then focus on our other ISO 20022 migration projects, especially on the ISO migration of TARGET2. Furthermore, with something like this, it's also nice to test with other counterparties and SWIFT. Plus, we wanted to have a bit of fun as well!”
“When we began, we didn't have any CBPR+ testing set up with ISO 20022. We didn't have the FINplus service either, which is needed to use In-flow Translation. Once we did though, getting started with In-flow Translation was quite straightforward,” says de Blok. “We subscribed to the FINplus pilot future service for In-flow Translation, and we simply started sending messages to ourselves.”
“The other banks were also very helpful,” de Blok continues. “If you wanted to retest parts of the testing, for example – that was really easily done. It was also easy to set up, which was completely different to our prior experience with other translation tools.”
In January 2022, SWIFT made it easier for financial institutions to start testing the In-flow Translation service by automatically subscribing all eligible BICs.
Since concluding their testing, Rabobank has moved from in-house, on-premise translation, to In-flow Translation for CBPR+, reducing the complexity of their translation processes and saving time and resources.
The In-flow Translation service provides all the information Rabobank needs in a single message, including the original information on how it was translated, with warnings when there’s truncation.
“One of the main benefits of In-flow Translation, from our point of view, is that instead of ending up with two distinct messages after translation, you get a single, multi-format message with all the information in there,” says Louwerse. “This allows us to do all our routing based on ISO 20022. As a result, we already have all the routing set up in a future-proof way. Only at the end of the flow do we determine whether a particular back-office system needs the ISO part or the MT part of this multi-format message. That really helps as it allows us to have a back-office system to move to native ISO 20022 messaging with very minor changes.”
Countdown to November 2022
Even if you’re not adopting ISO 20022 from November 2022, financial institutions need to take actions before this date to be ready. These include completing the key mandatory action of upgrading your messaging interfaces before reviewing your configuration and testing In-flow Translation, including the receipt of multi-format MX messages. All eligible BICs have been provisioned to the FINplus pilot environment, and we advise our community to upgrade and configure their interface and start testing.
“My advice to other banks would be to start In-flow Translation testing as soon as possible – don’t delay,” adds de Blok. “November 2022 is just around the corner. And don’t forget to set up your routing directly based on ISO; that will save you a lot of work in the future.”