March 17, 2021

The Four Types of ISO 20022 Adopters

In the midst of the critical project phase, where we ready our high-value payment processing for the ISO 20022 age, I am often surprised at the different approaches being taken by market participants – from the enthusiasts to those still in the dark. That is why I have taken the opportunity to take a step back and reflect on these different positions and the rationales that underpin them.

We all know that the migration to ISO 20022 – which will see major market infrastructures adopt the new standard and change their business practices accordingly – is one of the most ambitious ever projects in the high-value payments space. And, unlike previous projects, the ISO 20022 migration is set to occur in multiple markets in parallel. When dealing with a global initiative of this scale, it is inevitable that there is a mix of opinion in the market – from critique and scepticism to a lot of support and enthusiasm to shape the future of high-value payments.

This is, of course, an oversimplification (a fun take, rather than a serious taxonomy), but I see four different types of ISO 20022 adopters:


1. The Enthusiast

This group is the driving force behind making the ISO 20022 migration such a visible topic within the industry. They recognise the potential of having a harmonised industry messaging standard across the end-to-end payment value chain and the opportunities this affords. They will be quick to remind you, for example, that the standard will deliver the information needed for reconciliation and liquidity management in a much more structured and automated way. And they’ll follow up by highlighting how rich, structured information in an ISO 20022 message will also enable fast, smooth and efficient payment processing – unlocking automated data analytics for improved risk mitigation, as well as enabling the development of value added services for corporate clients.

Sometimes, practical issues and implementation efforts are side-lined by these characters, as they are inspired by the long-term vision, rather than by any given short-term business case. Without them, we risk limiting our thinking and our efforts to just the next few years, without ever fully challenging the status quo.

2. The Pragmatist

These characters try to nail down the immediate problem we want to solve with the ISO 20022 adoption. They remind us of our duty to ensure payment data integrity and the crucial role we have to play in the fight against financial crime. They also highlight the importance of structured data, which makes fully automated processes in cross-border payments possible without having to compromise on controls. With this in mind, they (rightly) argue that the business case for the community – one centered on the long-term cost-efficiency of payments – is particularly strong.

3. The Skeptic

This group is made up of people who tend to conclude that the amount of change, resources and investment required to migrate to ISO 20022 outstrips the anticipated benefits. This often manifests in critiques of the ISO 20022 standard itself, of the ambitious project timelines, or of the strict rules on data quality or on any other aspect of the initiative.

Often, the skeptic will have pragmatic alternatives in mind as to how individual issues for businesses can be solved. From this, we can often learn how to overcome immediate migration issues, such as in scenarios where the strategic implementation is taking too long.

From my experience, however, these proposals do not really address the fundamental problems that ISO 20022 aims to solve in the long term. As a result, this particular character often serves as the ambassador of the status quo.

4. The Ignorant

Scarily, this is still a pretty large group. They are assuming that others will solve the implementation requirements for them. And with this, they force the entire industry into a “legacy interoperability challenge”. All manner of translation and conversion tools are being considered in order to avoid renewing the core payment systems and to work around the symptoms of operating with an aged data format and outdated technology.

Also here we can still learn something from this group. This particular adoption character provides us with input for fall-back scenarios and “what/if” planning, which, to some extent, is helping to de-risk the initiative.


Now, I am personally convinced of the ability of strong, diverse teams to solve complex problems. And I think the same holds true for this extremely complex renewal of real-time gross settlement (RTGS) systems and cross-border payments worldwide. The different adopter characters can learn from each other if they’re prepared listen to the different points of view. By doing so, the initiative can prove successful in a way that neither denies the future vision of frictionless payments nor demands the impossible from the industry in the near term.

Let me close with my personal view on the topic, though you can probably already tell which category I fall into. I am convinced that we are moving in the right direction with ISO 20022 – implementing a global industry standard for payment messages across the interbank space, the respective market infrastructures, as well as the data flows from and to payment service users. This move promises to resolve the known breaks in data flows and allows for structured data for the benefit of the service users directly (allowing for ultimate parties, reliable end-to-end references and remittance information) as well as indirectly (increased speed of execution because of full straight-through processing in financial crime controls), to name a few of most visible benefit.

Moreover, the adoption of ISO 20022 provides an opportunity to update and revitalise the industry’s incumbent technology, renewing the world’s major RTGS systems, installing SWIFT’s new Transaction Manager in the interbank space and upgrading bank’s internal processing systems. On this latter point, the four different characters have an important role to play – it is they who will determine whether a bank uses ISO 20022 to renew its systems or simply finds ways to work around it. An interesting topic, but one for a future blog. Stay tuned.


  by Daniel Schwefer,
  ISO 20022 Programme Lead Back