Guide to ISO 20022 migration, Part 2
As the migration to ISO 20022 – the new global standard for payments messaging – progresses the benefits are clear: uplifted customer experience, more streamlined compliance procedures, and the ability to deliver new services. Yet with rapid change comes the challenge of keeping abreast of the latest developments and understanding the key points for consideration
It is for this reason that we produced “Guide to ISO 20022 migration Part 1” in May 2019. Just four months on, we are following up with the publication of Part 2 in our series of ISO 20022 guides. Although the process of migration has made further significant progress even in such a brief period of time, it should be noted that the initiative will take several more years to fully complete.
During 2019, the industry has risen to the challenge. The usage guidelines recently released include Cross-Border Payments and Reporting Plus (CBPR+) for cross-border payments and updated User Detail Functional Specifications (UDFS) for the Eurosystem.
Further updates are expected imminently, with CBPR+ guidelines for a number of core Cash Management (camt) SWIFT messages scheduled for release in November, and an update incorporating approved change requests to the UDFS guidelines expected by the end of the year. This puts the onus on market participants to begin to understand, and speak, the various guideline “dialects”.
In parallel, SWIFT has begun developing tools to facilitate the transition: a translation sandbox to translate FIN messages into the ISO 20022 format before they are sent and a translation service for incoming MX messages, with three implementation models to be considered by those receiving payments.
A wide impact
Like its predecessor, Part 2 of the Guide stresses that banks shouldn’t consider the migration to ISO 20022 as just “another IT project”; just as corporates must not make the mistake of writing it off as just “another bank project”.
While ISO 20022 primarily affects bank’s payment chains and operational workflows, the impact for large corporates and multinationals will be significant, especially for those with in-house bank or payment factory set-ups.
Whether a global bank implementing seismic changes, or a small corporate taking the necessary steps, market participants need to stay updated and begin to head in the right direction. “Guide to ISO 20022 migration: Part 2” is here to offer that guidance.