ISO 20022 Migration A ‘Huge Success’, But Many Firms Are Yet To Be Persuaded

September 28, 2023
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After the launch of ISO 20022 for cross-border payments and reporting (CBPR+) in March this year, payment market infrastructures are moving to the new standard — but firms are yet to see its potential.

After the launch of ISO 20022 for cross-border payments and reporting (CBPR+) in March this year, payment market infrastructures are moving to the new standard — but firms are yet to see its potential.

With six months of data to look back on, the early scores are in for the migration to ISO 20022, the new Swift messaging standard that allows for richer, structured payments data.

According to Swift data presented at Sibos 2023 and provided to Vixio, the adoption rate for ISO 20022 in cross-border payments currently stands at about 15 percent.

This figure denotes the percentage of cross-border payments where instructions have shifted from Swift FIN, a standard message type (MT), to ISO 20022.

Pat Antonacci, chief customer experience officer at Swift, said that so far the main drivers of adoption have been payment market infrastructures such as CHIPS in the US, CHAPS in the UK and T2 in the EU.

Overall, an average of 635,000 ISO 20022 messages have been sent and received each day over the past six months, covering more than 200 countries.


Antonacci added that adoption has been particularly impressive on the receiving side, with more than half of the world’s Bank Identifier Code 8 (BIC8) numbers receiving messages via ISO 20022.

On the sending side, however, only about 10 percent of BIC8s are initiating payments using the ISO 20022 standard.

In other words, though there is a steady stream of traffic using the ISO 20022 standard, most of that traffic is being translated into ISO 20022 after being received in an older MT format.

Brigitte Réthier, global head of institutional clients and transaction banking at Commerzbank, said that the 15 percent adoption rate is in line with her expectations at the six-month mark, and is already a “huge success”.

However, she added that to meet Swift’s target of full migration to ISO 20022 and the retirement of MT formats in 2025, adoption needs to go beyond payment market infrastructures.

Yvonne Yiu, regional co-head of global payment solutions at HSBC Hong Kong, said the “fundamental driver” of adoption will be banks and how quickly they can deploy payment initiation using ISO 200022.

“However, we all agree that this is not a small investment, because it entails front-to-back infrastructure changes and interface changes with our clients,” she said.

ISO 20022 a hard sell to clients

From her vantage point, Yiu said that convincing firms to migrate to ISO 20022 has been a struggle.

“Based on my interactions with some of the corporates, they actually have no clue as to why and how to plan for ISO 20022, and they question the value of it,” she said.

“They say: Why are we doing this? Is this a regulatory thing?”

Speaking at Sibos during a panel on ISO 20022, Antonacci pointed out that migration to ISO 20022 is not a “mandate” from regulators, but rather an “ask” from the global payments “community”.

Yiu continued on the same theme, noting that migration to ISO 20022 is something that will “truly add value” for firms.

“It is down to us to articulate the benefits and the value to our clients, and help them along the journey to plan an orderly migration, as that is a big ask for them,” she said.

“The key benefit is that, ultimately, all cross-border payments will carry the same ISO 20022 messaging from end-to-end throughout the payment journey.”

Benefits of ISO 20022

Speaking from the perspective of a financial institution, Réthier said the three main benefits are efficiency, compliance and expansion of data-driven product offerings.

When a cross-border payment uses ISO 20022 from end-to-end, there will be no need for financial institutions to translate or truncate older message formats — a goal known as "straight-through processing" (STP).

This will also mean that no information is lost along the way, and the information contained in each payment message can be more easily queried, helping to increase transparency.

Similarly, this will benefit compliance teams during both investigations and routine transaction monitoring.

For example, with a maximum of 9,000 characters per message, ISO 20022 allows each transaction to carry a much wider range of information, including “rich data tags” such as ultimate debtor, ultimate creditor and payment purpose.

“If you think about how we did sanctions screening in the past, how many times did we see false positives?” said Réthier.

“So, I think that by adopting richer data we will be able to be much more efficient as we fulfil these requirements.”

Finally, Réthier said that gathering data in the richer format will enable financial institutions to expand what products they can offer to customers.

“Looking at all the data, you can start giving the customer more data-driven insights in terms of their payment flows, and I think that opens a very wide range of opportunities.”

Artie Ambrose, head of treasury and trade solutions operations at Citi, expanded on this point, noting that when combined with AI, ISO 20022 could open new opportunities for automation within firms.

“At the heart of empowering AI is structured data, so there are going to be second- and third-order benefits of ISO 20022,” he said. 

“This will be the business intelligence, the insights and then the automation the community can get as a result of leveraging that data.”

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