Swift brings together payments industry leaders to drive the transition of cross-border transactions to the ISO 20022 messaging standard
ISO 20022 is set to become the de facto messaging standard for the payments industry.
The decision to migrate to the standard, taken by the Swift community in September 2018, was prompted by the move to adopt ISO 20022 as the new norm for high-value payments by some of the world’s biggest payment market infrastructures. The demand and readiness to migrate cross-border payments and reporting flows to the same standard was confirmed in a large-scale community consultation.
The shift to ISO 20022 and a harmonised end-to-end approach to implementation will:
- deliver increased efficiencies;
- support end-to-end STP;
- facilitate improved regulatory compliance;
- enhance the party identification process; and
- enable new business opportunities.
Drawing up the ISO 20022 implementation roadmap
To set out the foundations for the rollout and implementation of ISO 20022, we will be leading a community-wide collaboration with the newly created Cross-Border Payments and Reporting Plus (CBPR+) group.
The working group, formed of international payments experts*, will join forces to formulate global Market Practice and Implementation Guidelines and lay the cornerstone for a successful migration of cross-border payments traffic to ISO 20022, set to begin in November 2021.
The development of a standardised global approach will also help lower the implementation cost for the industry as a whole.
According to Paula Roels, Head of Market Infrastructures and Industry Initiatives at Deutsche Bank: “As the migration to ISO 20022 is a community-driven initiative the work of the CBPR+ is critical to success with a project of this magnitude. From the consideration of pain points in the market through to challenging market practice to ensure interoperability, the group plays a vital role in identifying any potential drawbacks to timely migration as well as establishing global usage guidelines catering for all market stakeholders and the future needs of our clients.”
What’s next?
- The migration of cross-border payments to the ISO 20022 will start in November 2021 and will coincide with the adoption of the standard by high-value payments systems in the Eurozone and operators in the US and UK.
- A four-year co-existence period will allow all members of the Swift community to make the switch and ensure readiness by the end of 2025.
- To assist the community in this transition, Swift will provide a service to translate between ISO 20022 and the MT messaging standard.
- We will also provide banks with testing environments to ensure implementation conforms to the guideline set out by CBPR+ and to test the translation facility.
Continued community engagement
The migration to ISO 20022 is a community-driven initiative and industry-wide engagement will be key to its success. That’s why we will regularly invite the community to review and comment on the CBPR+ guidelines as they mature, and we will publish the guidelines on the MyStandards platform, allowing easy access to all interested parties.
Harry Newman, Head of Banking at Swift, said of the initiative: “Our mission is to standardise business and operational interactions as much as possible, rendering a seamless service that banks can offer competitively to their clients.
The benefits of the common rulebook within Swift GPI show how successful this approach is, and the work that the CBPR+ group is doing to create a common implementation of ISO 20022 continues the transformation of cross-border payments.
*The participants are senior payments and securities experts representing Australia, Austria, Canada, China, France, Germany, Hong Kong, Italy, Japan, Luxembourg, Netherlands, Russia, South Africa, Spain, Switzerland, the Nordics, the United Kingdom and the United States.
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