Swift group to set guidelines for ISO 20022 migrations
Payments messaging standards provider Swift has established a new group to help it promote and assure smooth migration of the cross-border ISO 20022 standard.
The Cross-Border Payments and Reporting Plus group features various international payments experts who will create global guidelines for a common rollout and implementation of ISO 20022 for cross-border payments.
Swift has long viewed ISO 20022, with its ability to add relevant information to the transaction message, as a key part of its Global Payments Innovation initiative that essentially seeks to have banks operate with common communication and payment network rules and methods.
“Our mission is to standardize business and operational interaction as much as possible, rendering a seamless service that banks can offer competitively to their clients," Harry Newman, head of banking at Swift, said in a Thursday press release. "The benefits of the common rulebook within Swift GPI show how successful this approach is, and the work that this group is doing to create a common implementation of ISO 20022 continues the transformation of cross-border payments.”
In light of multiple planned migrations to ISO 20022 by high-value and instant payments infrastructures in the coming years, Swift agreed to create a common end-to-end implementation. Swift says the migrations will deliver increased efficiencies, support end-to-end straight-through processing, facilitate improved regulatory compliance, enhance the party identification process and enable new business opportunities.
The group's guidelines will be a key element in what Swift hopes to be a successful migration of cross-border payments traffic to ISO 20022 beginning in November 2021. A standardized global approach also will lower the implementation cost for the industry as a whole, Swift said.
The start of cross-border migration in 2021 is aligned with adoption of ISO 20022 by high-value payments systems in the Eurozone, which will be followed by operators in the U.S. and U.K. A four-year coexistence period will allow all members of the Swift community to make the switch by the end of 2025. Swift will provide a service to translate between ISO 20022 and the current MT messaging standard to assist the community with the transition.
Swift will also provide testing environments for institutions to ensure implementation conforms to the working group’s guidelines.
“As the migration to ISO 20022 is a community-driven initiative, the work of this group is critical to success with a project of this magnitude," Paula Roels, head of market infrastructures and industry initiatives at Deutsche Bank, said in the release.
"From the consideration of pain-points in the market through to challenging market practice to ensure interoperability, the group plays a vital role in identifying any potential drawbacks to timely migration as well as establishing global usage guidelines catering for all market stakeholders and the future needs of our clients,” Roels added.
The participants in the working group include senior payments experts representing Australia, Austria, Canada, China, France, Germany, Hong Kong, Italy, Japan, Luxembourg, Netherlands, Russia, South Africa, Spain, Switzerland, the Nordics, the U.K and the U.S as well as the International Securities Services Association.