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SWIFT follows the European Central Bank’s (ECB) decision earlier this month to postpone ISO 20022 migration of the Eurosystem by four months.
In light of the ECB’s announcement, SWIFT has committed to further analyse and validate impacts on the timeline for its cross-border payments and reporting plus (CBPR+), which specify and define how ISO 20022 should be used for cross-border payments and cash reporting on the SWIFT network, with a view to maintaining operational and business continuity across the global financial system.
“An overwhelming majority of our global community has requested that SWIFT align the start of the global ISO 20022 migration for CBPR+ with the ECB’s updated timetable to ease implementation,” a SWIFT statement read.
“In response, we have taken a decision to accommodate this request and SWIFT will begin the ISO 20022/MT coexistence period for all users on March 20, 2023.”
However, the financial messaging services insisted that it is clear from community feedback that despite the delay, there is strong momentum across the industry to implement and gain value from ISO 20022 rich data.
It also cautioned that the revised start date of March 20, 2023 will be definitive.
“Financial institutions are therefore encouraged to continue preparation for the March 20 start date and consider all potential scenarios in their planning to ensure readiness for the start of ISO 20022 coexistence for CBPR+ from that date.”
Original story: T2: Judgement Day (Extended) (October 10, 2022)
The European Central Bank (ECB) has announced that it is no longer going ahead with a planned launch of T2, its new real-time gross settlement system next month, citing technical and geopolitical issues.
The ECB’s governing council has decided to reschedule the launch of the new real-time gross settlement (RTGS) system and its central liquidity management model, T2.
The go-live has now been postponed by four months, from November 21 to March 2023.
This also effectively delays the ISO 20022 migration within the Eurosystem by four months.
The decision, following an assessment by the ECB’s market infrastructure board, was driven by the need to allow users more time to complete their testing in a stable environment.
Meanwhile, it also took into account what it says is the “importance and systemic nature of T2”, especially in view of the current geopolitical conditions and volatile financial markets.
Despite the delay, the ECB says that most users were prepared for the switch, but some were yet to complete their testing.
In addition, market participants also encountered delays due to the temporary unavailability of the test environment and initial software deficiencies.
Commenting on the news, a spokesperson for SWIFT told VIXIO that it has worked extensively with its global community to prepare for the start of the ISO 20022 migration for cross-border payments, and since August, all required capabilities have been deployed and institutions have been able to exchange ISO 20022 messages on an opt-in basis.
“Additionally, given our strong commitment to operational excellence, we have engaged with our community on a wide range of ‘what ifs’ ahead of the migration to consider the potential client implications of various scenarios,” said the spokesperson.
“In light of the ECB’s announcement, we will leverage this planning, validate with our global community, and, within one week, either re-confirm or revise the planned start date of the cross-border ISO 20022 migration.”
EBA Clearing has also updated its migration timeline, confirming that Q2 2023 will be dedicated to live migration tests, while March 20 will be the live date of the new ISO 20022-based system.
The ECB's Eurosystem has said that it will provide all the necessary support to market participants during their final preparations, urging those that have not completed their testing successfully to front-load their testing efforts in the additional period provided.
Once completed, the consolidated platform brings together the RTGS system and the securities settlement platform run by the Eurosystem, in a bid for further harmonisation of European financial markets.
Meanwhile, it also unifies the technical and functional aspects of the TARGET2 and TARGET2-Securities platforms and introduces new common and optimised features.
The new RTGS will replace TARGET2 and is intended to optimise liquidity management across all TARGET Services.
Four central banks — Deutsche Bundesbank, Banca d’Italia, Banque de France and Banco de España — act as service providers for TARGET Services, and are mandated with delivering the software and providing the test environment for the T2-T2S consolidation project.
The ECB is not alone in slowing down on real-time payments plans. Earlier this week, and despite industry backlash, Canada made the decision to delay the launch of the forthcoming retail Real-Time Rail (RTR) payment system, with Payments Canada also pushing to open up the new payment system to non-banks.
Although the RTR system launch was delayed, the agency has made significant steps to comply with other objectives of Canada’s wide-ranging plans to overhaul its payment systems.
As part of that effort, Canada will introduce the ISO 20022 financial messaging standard to its high value Lynx system in less than two months.
