Fed delays ISO 20022 implementation plan
The Federal Reserve Banks put the brakes on their planned migration of the ISO 20022 messaging standard, delaying a three-phased migration established in 2017 that targeted November 2020 as the start of that process.
Citing a request from the Payments Market Practice Group to reconsider the strategy in favor of a same-day implementation to fully enhanced ISO 20022 messages, the Federal Reserve said it will provide an update regarding implementation plans to its Fedwire service once its assessment is complete.
In a Monday press release, the Fed acknowledged that financial messaging operator Swift had announced late last year that it would enable its participants to start sending data-rich ISO 20022 messages over its global network starting in November of 2021. After that Swift announcement, the Fed stated, global financial institutions indicated that a phased-in implementation would increase risk and duration of cross-border interoperability issues.
Inclusion of ISO 20022 messaging, which essentially allows far more information about a payment to be included in the routing of a transaction, has been a key talking point in faster payments discussions between the Federal Reserve and its various tasks forces and system providers for the past five years.
If funds-transfer systems in local jurisdictions are not yet enabled for fully enhanced ISO 20022 messages by Swift's target date, "there is a risk they may have to truncate data in certain messages," the Fed stated. Because of that risk, global financial institutions have asked the Federal Reserve Banks and other high-value system operators around the world to adopt a common approach to implementing the fully enhanced messaging, including complementary target implementation dates, the Fed added.
The Federal Reserve Banks say their assessment will include discussions with Fedwire funds service participants and The Clearing House, operators of the CHIPS fund-transfer system, in order to ensure an agreed-upon, revised implementation approach.