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The global transition to ISO 20022, the new international standard for electronic data interchange between financial institutions, has entered its home stretch, following confirmation from the Society for Worldwide Interbank Financial Telecommunication (Swift), the European Central Bank (ECB) and the US Federal Reserve regarding full migration timelines for all high-value payment systems.
The move establishes ISO 20022 as the single, data-rich format for global payments and securities messages, replacing decades-old MT formats. Swift’s co-existence period between the MT (message type) and ISO 20022 messages will end in November 2025, after which non-compliant institutions will no longer be able to send or receive certain categories of message types. According to Swift, it connects 11,500 institutions across more than 200 countries with 53m+ FIN messages sent every day on average, so for firms engaging in cross-border payments, a risk of non-compliance with ISO 20022 will result in significant operational deficiencies.
For regulators and market infrastructures, this transition underpins a broader effort to enhance transparency, harmonise compliance standards and modernise cross-border transaction data. For financial institutions, it represents both a major technical overhaul and a strategic shift, which will affect compliance frameworks, operational resilience and competitive positioning across the global payments chain.
The bigger picture
ISO 20022 has been designed to establish the foundations for a global data language that will make payments faster, safer and more transparent.
By allowing payment messages to carry structured, granular information, including payer identity, invoice references and purpose codes, the standard supports stronger anti-money laundering (AML), counter-terrorist financing (AML/CTF) and sanctions-screening procedures.
The standard is now mandated or adopted by all major payment systems, including SWIFT CBPR+, TARGET Services in the eurozone, CHAPS UK and Fedwire Funds in the United States. Emerging markets are following suit. South Africa’s RTGS system, the South African Multiple Option Settlement (SAMOS) has completed its ISO 20022 migration, and in August 2025 Nigeria announced its decision to hold compliance validation exercises as well to ensure full migration by October 31, 2025. In May 2025, the Indian Bank’s Association also committed to ensuring full migration by the global deadline.
For Europe, the shift also aligns with the EU’s eIDAS 2.0 Regulation and Digital Finance Package, embedding ISO 20022 within the region’s wider agenda for secure, data-driven cross-border finance. For example, Ukraine’s National Bank has already announced that its payment systems will be ISO-compliant, marking a step toward regulatory convergence with the EU and greater interoperability for cross-border transactions in the region.
At the macro level, ISO 20022 represents global alignment. By harmonising data standards, it facilitates interoperability between national payment systems and reduces friction in cross-border transactions. This convergence supports financial integration across regions; for example, for non-EU markets pursuing EU alignment, such as Ukraine. At the micro level, the effects will be felt in the daily operations of banks, payment service providers (PSPs) and fintechs, as institutions will incur new compliance costs in relation to multi-factor authentication, system upgrades and data-quality controls, while also facing increased scrutiny from supervisors over message accuracy. Legal teams will need to revise contracts and service level agreements to account for new data-handling obligations.
For banks, PSPs and fintechs, ISO 20022 adoption offers clear operational and commercial benefits but also introduces new legal, compliance and technology risks. The enriched data standard will enable more accurate reconciliation, faster settlement and improved fraud detection, so firms can expect fewer exceptions and better processing. At the same time, regulators such as the Bank of England also view ISO 20022 as providing potential benefits such as improved efficiency, payment prioritisation and prevention of financial crime. Institutions that fail to migrate correctly risk breaching reporting obligations, mis-identifying counterparties or generating incomplete data for AML/CTF screening. Implementing ISO 20022 will not be optional and partial implementation may incur risks such as additional costs and processing failures.
Risks for firms that do not adopt ISO 20022 include:
- Legal and regulatory risks include potential fines, supervisory action or the loss of access to payment systems such as SWIFT CBPR+. In the EU, incomplete adoption could also expose firms to breaches under the Digital Operational Resilience Act (DORA). Although DORA does not necessarily mandate the adoption of ISO 20022, it does focus on risk management and operational resilience. A failure to migrate to the aforementioned standard could result in non-standard messages, which may lead to operational inefficiencies, payment disruptions and compliance issues, all of which would make financial entities susceptible to risks and non-compliant with DORA.
- Operational risks are equally material. Poor data mapping or validation can lead to rejected payments, onboarding delays, reconciliation errors and customer disputes. Running both MT and ISO 20022 systems also increases complexity and cost, so failure to decommission legacy processes could undermine resilience.
- Additional costs, as although Swift has indicated that a translation service will be available, it will come at a premium, and is intended only for minimal exceptions, not as a substitute for full compliance.
- Reputational risks stem from payment delays or compliance breaches that erode customers and counterparties’ trust, which is particularly acute for institutions active in correspondent banking or cross-border trade finance.
What firms should do now and what to plan for
Financial institutions should:
- If they have not done so already, complete impact assessments covering data, technology and compliance functions.
- Finalise message mapping, testing and validation for all payment types to ensure seamless interoperability with Swift and domestic RTGS systems.
- Train operations and compliance teams to interpret enriched ISO 20022 data for AML/CTF and sanctions monitoring.
- Engage with regulators and system operators to confirm readiness dates and testing environments.
Firms should be planning for:
- Full data-governance integration, ensuring ISO 20022 information feeds into analytics, audit and regulatory reporting tools.
- Process automation, leveraging richer data for real-time monitoring, liquidity management and customer insights.
- Commercial innovation, such as enhanced corporate treasury solutions or AI-driven fraud detection that depend on structured data.
- Alignment with future digital currency systems, as most central bank digital currencies (CBDCs) and instant payment rails are being designed around ISO 20022 syntax.
Why should you care?
Institutions that treat migration as a strategic opportunity and not just a compliance burden will be best placed to monetise their investment once the co-existence period ends. The transition demands close coordination between compliance, IT and operations departments and third-party connectivity. Firms that adopt ISO 20022 effectively can use its structured data to improve reconciliation services, enhance customer reporting and build predictive analytics tools. Payment transparency and traceability will also help build trust with counterparties, customers and regulators alike.
Conversely, slower adopters face loss of competitiveness. Once Swift and domestic operators fully enforce ISO 20022, non-compliant firms may experience exclusion from certain corridors or increased correspondent banking costs as partners demand richer data for compliance. They may also find themselves being left behind as ISO 20022 could enable interoperability between traditional payment systems and tokenised or blockchain-based rails, providing early movers with a bridge to future-state digital finance.
For large financial institutions, ISO 20022 compliance will be a prerequisite for continued participation in high-value payment systems. For smaller PSPs and fintechs, it is an opportunity to differentiate through data-driven products and faster processing.
Regulators will also rely on the standard’s structured data to enhance supervisory efficiency and strengthen cross-border cooperation. The Bank of England, for example, has announced its decision to expand mandatory ISO 20022 enhanced data requirements for CHAPS from November 2027.
Firms that are prepared for the migration, and have trained staff and aligned governance will minimise disruption and position themselves for the next phase of digital payments integration. Those that delay risk fines, system exclusion or lasting reputational damage.
Next steps
The global co-existence period for SWIFT MT and ISO 20022 messages ends on November 22, 2025.
From that date, financial institutions must demonstrate end-to-end readiness, including compliance with local central bank mandates and internal data quality testing.
In an environment where data is the new currency, ISO 20022 compliance will not just be about keeping pace, it will define who remains connected to the world’s financial network once the new language of payments becomes universal.
