As the November 2025 deadline for completing the ISO 20022 migration looms ever closer, banks and financial institutions globally face a myriad of challenges. As of November 2024, 28% of global cross-border payments on the Swift network have transitioned to ISO 20022 messaging. This momentum is set to increase, particularly with payment service providers (PSPs) under the European Payments Council’s SEPA Instant Payments mandate preparing to embrace the new standard fully.
A Wake-Up Call for Financial Institutions
Despite the compelling case for migration, many financial institutions underestimate the complexities and scale of the ISO 20022 project. Recent polls indicate that while 18% of organisations in EMEA and North America are already able to send in ISO 20022 and 21% in APAC, a staggering 10% (EMEA and NA) and 7.5% (APAC) have already indicated that they will not be ready for the November 2025 end of the co-existence period. This lack of preparedness is particularly alarming as it can lead to increased operational friction and costs, especially within correspondent banking networks that rely on seamless transactions.
However, there is good news, too. Swift has engaged with the top 175 banks, which represent 80% of volume, and confirmed that they will be ready for November 2025. Additionally, Swift’s analytics based on forecast data collected from the top 175 banks indicate we should see 40% of traffic being sent as ISO 20022 by the end of 2024.
ISO 20022 is not merely an IT upgrade; it signifies a fundamental shift that necessitates a comprehensive, organisation-wide approach. Every department—from IT and compliance to customer service—must understand the operational changes brought about by this transition. Without company-wide education and engagement, there is a significant risk that the project will falter before it gains momentum.
Preparing for the Transition
At the recent Sibos conference, industry leaders emphasised the necessity of robust contingency planning.
Francois Maigre from Swift noted that the success of the migration relies on cohesive community collaboration. Swift has highlighted the risks posed by isolated adoption rates among participating banks; should some institutions lag, disruptions could ripple throughout the entire ecosystem, frustrating ongoing transactions and potentially leading to increased costs.
Mark Avery from HSBC underscored the proactive measures his institution has taken by ensuring their systems were ISO-capable from the outset. By embracing the migration early, HSBC has integrated fully enhanced data sets into its operations. This integration not only minimises compliance burdens but also radically improves operational efficiency. The structured data provided by ISO 20022 can significantly reduce false positives in compliance checks, leading to faster processing times and an improved overall user experience.
Embracing the Strategic Benefits
ISO 20022 migration offers financial institutions an unparalleled opportunity for operational growth. The structured nature of the messaging format enhances transaction management, enabling better visibility across payment channels. Institutions that embrace ISO 20022 can tap into advanced real-time payment systems, mitigate operational risks, and significantly elevate customer experiences.
Bottomline’s Frederic Viard echoed these sentiments, stressing the importance of allowing adequate time for rigorous testing and thorough preparation. By investing in technology and partnerships that facilitate the transition, banks can position themselves for current and future payment system enhancements.
Among the discussions at Sibos, emphasis was placed on the need for technical readiness. Julie Bolan from Swift articulated that while migration rates currently hover around 27%, institutions must prioritise payment instruction messages to meet operational continuity and interoperability demands.
Key Benefits of ISO 20022
- Enhanced Data Capability: The messaging standard supports a richer data format, allowing for more comprehensive information in payment messages. This improvement enhances transaction accuracy and aids compliance with evolving regulatory standards.
- Operational Efficiency: ISO 20022 enables end-to-end transaction tracking, reducing manual interventions and lowering operational costs. With improved monitoring and management capabilities, financial institutions can achieve greater transparency in their payment processes.
- Improved Customer Experience: As customer demands evolve, banks must uphold a high standard of seamless and transparent payment experiences. ISO 20022 enhances payment visibility and tracking, leading to higher customer satisfaction.
Challenges Ahead
While transitioning to ISO 20022 carries remarkable potential, banks might face substantial challenges. The comprehensive nature of the migration requires extensive testing and system preparedness. Mark Avery highlighted the need for a cultural shift alongside operational improvements to maximise the benefits of the new data structures.
In light of these challenges, financial institutions are urged to tackle the migration challenges proactively. With less than 12 months remaining until the full rollout, time is of the essence.
Steps to Ensure Successful Migration
- Develop a Comprehensive Plan: Financial institutions need to design a clear project roadmap to ensure readiness well ahead of the deadline.
- Engage with Technology Partners: Collaborating with technology providers is crucial. Financial institutions must ensure their systems meet ISO 20022 standards to bridge potential gaps.
- Educate Staff and Customers: Information sharing is key to a successful transition. Conducting training sessions and providing resources about ISO 20022's benefits will be vital.
- Focus on Payments: Institutions should identify and prioritise critical payment messages that must migrate by November 2025, placing special emphasis on payment instruction messages, which are vital for operational continuity.
The Road Ahead
As the November 2025 deadline approaches, it is increasingly evident that the transition to ISO 20022 transcends a mere technical upgrade; it represents a significant transformation in the financial services landscape. The advantages of enhanced data capabilities, improved operational efficiencies, and elevated customer experiences make a compelling case for swift migration and proactive participation in the adoption process.
Julie’s closing remarks strongly resonate within the industry: “We are all in this together, and we need to collaborate to reach the November 2025 deadline.” With commitment from industry leaders and proactive steps taken by various institutions, the time is ripe for every bank and financial institution to act decisively in achieving full compliance and reaping the benefits of ISO 20022.
The shift to ISO 20022 is not merely a compliance requirement; it is an opportunity for banks to innovate, refine their operations, and foster greater interoperability. As the financial landscape moves toward increased efficiency and customer-centric solutions, the message is clear: financial institutions must embark on their migration journey now, engage with their technology partners, and ensure they are well-prepared for the future.
By embracing ISO 20022 as a strategic catalyst for transformation rather than only a compliance project, financial institutions can unlock significant benefits. Therefore, as the industry collectively tackles the challenges associated with this transition, forward-thinking banks and financial institutions will meet impending deadlines and be positioned to thrive in an evolving financial ecosystem.
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