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ISO in bytes: The voice of the Canadian community, a refined activation approach and your testing journey

ISO in bytes: The voice of the Canadian community, a refined activation approach and your testing journey

Standards,
5 October 2021 | 12 min read

Welcome to the 6th edition of ISO 20022 in bytes. In this edition, with just thirteen months until the go-live of CBPR+ and the Transaction Manager (TM), we’ll hear from Payments Canada about their journey as an RTGS to adopt HVPS+, the ISO 20022 market practices for payment market infrastructures. The CBPR+ programme is moving ahead at full steam, with the in-flow translation service set to become available for testing this November, and a refined transition period for next year’s move from FIN to MX.

The voice of the customer

The voice of the Canadian community: SWIFT platform connectivity and more

Transformation of Canada’s payments system is well underway. There is a strong momentum for the adoption of the ISO 20022 standard to enable data-rich payments and to support financial institutions in meeting the SWIFT ISO 20022 global requirements by November 2022.

Hear more from Mike Hoganson, Director, Lynx.

The payment ecosystem in Canada is rapidly changing. New technologies, consumer demands and increased international competition are driving payments modernisation.

In collaboration with financial institutions and other stakeholders, Payments Canada is leading Canada’s payment modernisation journey – including the introduction of Lynx, a new high-value payments system, and the Real-Time Rail, a real-time payments system – to deliver the future of payments for Canada and help strengthen the country’s competitive position. Lynx was recently launched on 30 August, 2021 after over two and a half years of planning, testing and implementing using the existing MT messages.

Payments underpinned by ISO 20022

Fundamental to our new and improved payment systems are modern rules and standards, including the introduction of the ISO 20022 global messaging standard.

Recently, Payments Canada published updated ISO 20022 message specifications for Lynx, Canada’s new high-value payment system. End-to-end support for ISO 20022 will be released in the system’s second phase – scheduled for late 2022.

The updated specifications allow Lynx participants to prepare their existing applications to leverage the value of the ISO 20022 messaging standard. This includes access to enhanced remittance data, support for global interoperability and improved transparency. Vendors who support Canada’s payments ecosystem can use the published messages to update their applications and develop new services for Lynx participants and the wider ecosystem.

Connectivity to SWIFT

For Lynx, SWIFT is a key player, providing the secure network over which Lynx participants exchange payment instructions and monitor the network for payment processing. SWIFT is also responsible for the operation of the copy service and overall management and maintenance of the MT messages that are processed through Lynx.

The ISO 20022 messages for Lynx also support Canadian financial institutions preparing to meet SWIFT’s ISO 20022 migration date for cross-border payments, expected to roll out at the end of 2022. Payments Canada and SWIFT have been working closely together to prepare and facilitate coexistence and migration to ISO 20022 for the Canadian community.

A vision for the future

The ISO 20022 standard is a pivotal part of Payments Canada’s work to transform Canada’s payments ecosystem. The modernisation of payment systems will bring faster, safer and more data-rich solutions to businesses and consumers to enhance their payment experience and support greater efficiencies in payments processing.

Together with partners in the country’s payment ecosystem, Payments Canada is excited to support the adoption of ISO 20022 by Canadian financial institutions, vendors and businesses.

Read more

The refined activation approach for ISO 20022 and TM

We continuously consult with the community to help us prioritise and plan. Based on this consultation, we actively manage and update risks, especially as SWIFT users firm up their ISO 20022 and TM adoption plans. The latest community surveys indicate that over 50% of cross-border payments will switch to ISO 20022 in November 2022. With our revised projections now indicating much higher volumes than originally foreseen, this revised activation plan seeks to prudently manage deployment risk on behalf of the SWIFT community. There has also been debate in the community around migrating FIN/MT-originated transactions to TM (which was not part of the defined TM scope), with a broad range of views on the topic. To address both points, we have refined the activation approach for ISO 20022 and TM as follows:

  • We will maintain the current TM activation date in November 2022, and deploy the in-flow translation service to ease interoperability, earlier than currently planned in August 2022. As previously announced, the successful testing of the service was completed in June. It provides translation from ISO 20022 to dual-format (MX with embedded translated MT). 
  • From November 2022 onwards, we will build-up ISO 20022 payments incrementally in TM over a period of six months, using a clear and agreed set of criteria, prioritising those payments with rich data (an additional three months’ contingency is foreseen if at any point these criteria are not met).
  • We will keep FIN/MT-originated transactions on FIN and focus on migrating banks to ISO 20022 in line with the industry’s clearly defined objective to move to the new standard. We will, however, monitor developments and re-evaluate the opportunity of moving MT payments to TM in the second part of 2023, based on the progress of ISO 20022 migration and community feedback at that time.

This refined approach ensures that ISO 20022 migration of cross-border payments can proceed as planned, starting in November 2022 and coinciding with the go-live of T2 and EURO1 in the Eurozone. At the same time, it also ensures that the community can seamlessly migrate their payments traffic to TM.

Testing Journey

Test Sparring Partner

The CBPR+ Test Sparing Partner (TSP) is now freely and universally available for any customer who has subscribed to the FINPlus Pilot Future service. If you are looking for capabilities to customise the test data, to run elaborated test cases or simply want to have additional support with the application, we encourage you to sign up for the Premium Access. To learn more, reach out to your account manager.

TSP is now also fully aligned with CBPR+ v2.0. New payment and cash management message types are continually being added to the service, with pacs.008, pacs.009, pacs.002, pacs.004, camt.052, camt.053 and camt.054 available or soon to be available. We are also pleased to announce that we have expanded currencies supported by the TSP to a total of 13. We are working hard to bring you more functional features to support your testing requirements. Watch this space for more updates. 

To learn more about the TSP check out the useful resources we have available, including an adoption briefing, introductory module on SWIFTSmart and a user guide on our Knowledge Centre.

In-flow Translation Service

As above, the in-flow translation service will provide an ISO 20022 to MT translation capability in order to maintain interoperability during the transition from MT to ISO 20022. ‘In-flow translation’ means that translation takes place during message processing by SWIFT. Customers will receive a multi-format message: The translated MT is embedded in the original MX, delivered over SWIFT’s FINplus messaging service. The approach aims to facilitate integration in cases where not all of a receiving customer’s applications support the ISO 20022 format yet. Messages in scope can be found in our connectivity guidance document.

The in-flow translation service will form part of FINplus and be available for testing from November 2021. At that point it will automatically be enabled for existing FINplus participants, along with new participants who subscribe to FINplus after November. You should make sure you upgrade your messaging interface to ensure receipt of these multi-format messages over FINplus,

If you would like to learn more about the in-flow translation service, please explore the relevant adoption briefing and read our report on the successful customer pilot, available in the ISO 20022 document centre on SWIFT.com.

Read more

MI Community Pack

With RTGSs of major reserve currencies adopting ISO 2022/HVPS+ many market infrastructures are also looking at CBPR+ timelines to uplift their domestic capabilities, including through the adoption of ISO 20022. This is to ensure rich cross-border data can be passed domestically by intermediary agents into the domestic RTGS.

The best market practices developed for large payment market infrastructures are now packaged in an off-the-shelf solution, to drastically accelerate the adoption of ISO 20022 for the domestic community at a lower cost. This solution has numerous benefits, ranging from SwiftNet service provisioning to harmonised HVPS+ based market practices, and value-added features out of the box. It enables:

  • Network and edge message validation against HVPS+ market practice
  • Interface packages for messages creation, routing and search capabilities
  • Copy services
  • Free content distribution and consumption by your participants through MyStandards
  • Free functional testing for you and your participants through the Readiness Portal
  • A big-bang or coexistence migration approach  
  • A translation library to shield participants wishing to migrate at own their pace

We’re giving customers peace of mind by:

  • Leveraging best practices while catering for SWIFTNet specifics, including gpi requirements
  • Maintaining message specifications in sync with CBPR+, removing the pain of tracking, adjusting global changes to domestic market practices
  • Simplifying provisioning for faster delivery of standards artefacts

MIs can start planning their ISO 20022 community adoption journey now and test this off-the-shelf solution in Q2 2022. For further details, speak to your account manager.

Vendor Update

With more than 80 vendors confirming their commitment to the adoption and support of CBPR+, SWIFT continues to work with the vendor community to provide the foundation for native back-office readiness for ISO 20022.

SWIFT has engaged with service bureaux to communicate that the SIP T&Cs are now updated and will be effective as of Jan 2022. Service bureaux using a SWIFT interface can upgrade to the latest version (SWIFT Alliance Access v7.6 / Alliance Messaging Hub v4.2) by December 2021. Webinars are in place for Q4 2021 (October) to run through the compliance requirements.

Interface testing is currently underway and open to all interface providers.

Inform Copy: SWIFTNetInform and FINInform

As part of a frictionless ISO 20022 migration journey, on 15 October 2021 SWIFT will be introducing the SWIFTNetInform service, which will trigger automatic copies of InterAct store-and-forward traffic based on configurable criteria.

SWIFT is introducing 'Inform Copy' as a new term that refers to the FINInform and SWIFTNetInform services offered on FIN and InterAct messaging services respectively. These services assist users with tasks that include message monitoring and reporting, optional authorisation, or outsourcing services.

SWIFTNetInform makes copies of InterAct store-and-forward messages, for example, on FINplus, while FINInform copies MT messages on FIN.

SWIFT will create two new Inform Copy documents (Service Description and Operations Guide), which will centralise all the common and different information for SWIFTNetInform and FINInform.

The new Inform Copy documents will be effective for the SWIFNetInform service and the operation details as soon as they are published on SWIFT.com. The expected publication date is 15 October 2021, in the Knowledge Centre on swift.com.

The existing FINInform documents and the new Inform Copy documents will coexist for three months. After this period, the FINInform Service Description and related Operations Guide will be replaced by the respective Inform Copy documents. The exact decommissioning date will be published in a Knowledge Base article on the Knowledge Centre on swift.com in Q4 2021.

New Collateral  

We continue to support your work by updating and expanding the resources we offer on ISO 20022 adoption.

Report on Customer Pilot for In-Flow Translation service

In our last edition, we announced the successful completion of the pilot exercise for the in-flow translation service. To learn more, read the full report.

Read more

Adoption briefings

We have six adoption briefings that are available on SWIFTSmart, aiding understanding of requirements and how SWIFT can help. Extra adoption briefings will be published during Q4 2021.

Explore our adoption briefings today

CBPR+ modules

Over the summer, we added two SWIFTSmart modules to our extensive CBPR+ curriculum on SWIFTSmart. These include:

  • End-of-Day Account Reporting (camt.053)
  • Debit / Credit Notification (camt.054)

We’ll be adding the Notification to Receive (camt.057) and Account Reporting Request (camt.060) modules soon, so stay tuned.

Debit and Credit Notifications

End-of-day account reporting

Need further support on the implementation of ISO 20022? SWIFT Standards Consulting services can help.

Learn more

SWIFT issues guiding principles for screening ISO 20022

SWIFT, in collaboration with the banking community, is undertaking a programme of initiatives to ensure the compliance ecosystem can fully benefit from the adoption of ISO 20022. This includes designing and implementing screening guidelines and data quality principles for ISO 20022 through industry collaboration.

Representatives from 14 global and regional banks took part in a series of workshops, assessing the message structure with the purpose of defining:

  • Which ISO 20022 elements should or should not be screened
  • How to best match these elements against sanctions lists
  • Which data quality principles should be observed to support effective and efficient screening

Based on these workshops and a careful analysis, we’re proud to publish the first set of guiding principles for screening ISO 20022 messages, fully endorsed by the Payments Market Practice Group (PMPG).

Download our screening guidelines

Way forward and call for action

With the move to ISO 20022 for payments and reporting gathering pace, the time for you to start planning your ISO 20022 adoption journey is now. Keep in mind that the entire community will be required to be able to receive multi-format ISO20022 CBPR+ messages from November 2022. This is a mandatory requirement, but rest assured that we will help you on your readiness journey through the testing tools described earlier in this edition. So, ensure your messaging interface is ready and start engaging with your correspondents to test ISO20022 flows. We look forward to working with you to ensure this transformation for the industry is a success! Explore our SWIFT Platform page on the Knowledge Centre to get started as soon as possible.

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