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ISO 20022 Migration:
Richer Data, Faster
Payments Automation
Financial institutions are adopting the ISO 20022 standard, entering an era of common messaging language and smoother, more rapid data integration. Is your organization ready?
Talk to our expertsWhy migrating to ISO 20022 just makes sense
More structured and enriched data in ISO 20022 messages will ensure a better and faster end-to-end management of payments, thanks to upfront checks, lower friction throughout the process, and more effective reconciliation afterwards.
ISO 20022 has a number of structured fields such as “Address” which hold information in a specific way according to certain rules. This enables a bank system to improve and accelerate validation by looking for that information specifically in that field. ISO 20022 also holds more information on intermediaries in a structured way, enabling a bank to understand the full lifecycle of that payment and where it has been processed thus far.
Multiple legacy systems within a bank’s infrastructure are likely using multiple legacy formats, particularly when those systems cross borders, leading to high risk and cost. The migration to ISO 20022 is an opportunity to standardize the internal format and reduce the risk and cost overhead.
Bank sanctions screening systems scan every field in a message format to identify the country information and validate against sanction rules. That information can be sourced from the “Country” field reducing the amount of processing needed by the sanctions system and accelerating processing time (think of the famous Scuba diving example).
The standardisation and increased structure of ISO 20022 allows for organisations to better leverage the use of information in a message. Examples include learning about your customers behaviour profile to adapt your product offering per customer.
Existing bank systems are programmed to accept the limited amount of information available in current message formats. ISO 20022 supports much greater information. In order to minimise the change needed to systems it is tempting to truncate the ISO 20022 message fields. This could result in the loss of important information.
Revamping the messaging component of your payments engine isn’t easy. But it could be!
ISO 20022 introduces 750 new business components, and more than 1900 new message definitions. Understanding the rich, structured data and the business rules is of utmost importance when preparing to migrate to ISO 20022.
National regulators have set different deadlines for ISO 20022 adoption, meaning that banks operating across borders need to carefully plan their migration strategy with a detailed implementation plan.
Banks should consider the risks associated with a change as transformational as ISO 20022, and create associated mitigation strategies.From a regulatory compliance perspective, managing and storing new, additional transaction information while retaining old data also poses challenges. The change to this new format means a variety of downstream impacts; for example, complexities in reporting, additional costs of analytics and data storage.
As a long-serving partner for Swift integration and an expert in payment industry innovation, IntellectEU is uniquely positioned to assist with your ISO 20022 migration initiative.
Identify all the parties you’re sending / receiving messages to / from and understand when they are planning to migrate to ISO 20022
Which systems will be impacted by the migration? How will existing flows, applications and operations need to be changed in order to accommodate the migration to ISO 20022?
Based on the above two, define the roadmap towards implementing ISO 20022 and the plan regarding support of legacy formats
Take inventory of the possible risks associated with this transformational change, and create associated mitigation strategies