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Preparing for ISO 20022: Ensuring interoperability

Preparing for ISO 20022: Ensuring interoperability

12 July 2019

To help you prepare for the move to ISO20022, we are taking a number of initiatives to facilitate interoperability between MT and ISO 20022 messages during the coexistence period.

November 2021 will mark the beginning of the migration of payments and cash reporting from MT to ISO 20022. The migration to ISO 20022 will change the way banks and other users exchange cross-border payment instructions and reports. Its impact will reach all users in the SWIFT community, which is why, in our role as a facilitator of the migration, we are working to prepare the community for migration and to facilitate interoperability during the four-year coexistence period.

Now is the time to get ready

When the migration starts in November 2021, users of both MT and ISO 20022 message formats must be able to interoperate. This means that between now and then you need to ensure your interface is ready for the coexistence period, which will span for four years as from November 2021.

If you are using SWIFT supplied interfaces, such as Alliance access/Entry and AMH, the required software updates will be made available in 2020. We are also evolving our Lite2 solution to support users during the coexistence period.

For users of third-party interfaces, we recommend that you contact your vendor to learn more about their specific requirements and plans. We will share the requirements for the coexistence period with third-party vendors during the second half of 2019.

Ensuring interoperability

The switch from MT to ISO 20022 messages format will take place over 4 years. During this period, SWIFT will provide an optional translation capability to enable interoperability between ISO 20022 and MT users.

Senders will be able to send payments and cash reporting messages in either standard – ISO 20022 or MT – using the protocol native to the standard – FIN for MT or InterAct for ISO 20022.

Receivers will receive the message in its format of origin as signed by the receiver.

Translation will allow a message to be transformed from one format to the other, either before it is sent or after it is received.

The translation capability will be available in two forms, according to the complexity of the user’s needs.

Option 1 - Local or central API
Suitable for more sophisticated users with more complex internal orchestration needs;

Option 2 - In-flow translation
Targeting primarily smaller users, with an emphasis on ease of implementation for MT back-office users that receive ISO 20022.

Users of in-flow translation will receive the message in its original format and, for ISO 20022 messages, may also receive a translation into MT, which can be routed for processing by an MT back-office system.

Translation limitations for Intermediaries – The use of any translation service comes with inherent limitations. Intermediary banks, who are often legally required to relay in an outgoing payment message all the data contained in the received message, are strongly encouraged to adopt ISO 20022 natively in their back-office at the beginning of the coexistence period. ISO 20022 messages can contain richer data than MT and intermediary banks must be able to process these in their entirety when the migration start in November 2021.


ISO 20022 for payments - Webinar

Building in ISO 20022 readiness into SWIFT services and applications

In supporting the migration to ISO 20022, our goal is to reduce the impact of the change as much as possible for our community. This is why we are working to ensure our own services and applications are ISO 20022-ready as well.

Our Relationship Management Application (RMA/RMA+) will evolve to facilitate the creation of ISO 20022 RMA relationships equivalents to existing MT RMA relationships, before the beginning of the migration. In this way, when the migration starts, the business relationships you have originally agreed with other users on the SWIFTNet FIN service, which carries your MT traffic today, will be easily replicable in RMA relationships on the SWIFTNet InterAct service, which will carry the ISO 20022 messages.

What does this mean for you?

Before the migration starts, SWIFT will provide you with a file containing the new ISO 20022 RMA relationships and all you will need to do is to upload this file in your RMA application. The replication will be based on your existing MT RMA relationships, which means that now would be a good time to start reviewing your existing RMA relationships to ensure they are up-to-date before they are replicated in the new SWIFTNet InterAct service.

Setting a common set of market practice guidelines

The work of the Cross-Border Payments and Reporting Plus (CBPR+) market practice working group is ongoing to formulate the guidelines for the use of ISO 20022 for cross-border payments and cash reporting. The group aims to release the guidelines for relevant message types and reporting specifications by the end of 2019. The specifications developed by the CBPR+ group are aligned with the Payments Market Practice Group (PMPG) High Value Payment System Plus (HVPS+)[1] and with SLAs and market practice for SWIFT gpi, ensuring the consistency of data for payments that include one or more HVPS in their end-to-end processing.

The consistent use of ISO 20022 in the cross-border space will be essential for the community to fully reap the benefits of the standard. This is why all messages will be validated by the InterAct messaging service for cross-border payments. Messages that do not comply with the CBPR+ guidelines will be rejected.[2]

How to stay informed?

To ensure the entire SWIFT community is well prepared to enter the migration to ISO 20022, we will provide regular touchpoints about the migration during SWIFT events, such as Business forums, regional conferences, standards forum and Sibos. The latest updates about the migration are accessible on the ISO 20022 migration information hub and market practice published by the CBPR+ group will be accessible on MyStandards.

For further information, you can contact our programme team

[1] The PMPG High Value Payment System Plus (HVPS+) guidelines serve a common baseline for the ISO 20022 specifications of key high-value payments system operators, including the US Federal Reserve, The Clearing House, The Bank of England, EBA
[2} Note that this applies only to cross-border (or many-to-many) messages. Market infrastructure may implement their own specifications.