Article 30/11/18

ISO 20022 cross-border payment migration delay and what does this mean for you?


Swift has announced that the proposed start of the ISO 20022 migration for cross-border payments is to be delayed to the end of 2022 (original start date was November 2021) with a shortened coexistence period meaning the original end date of 2025 is still in operation.

What does this mean?

It means banks/FI’s/software vendors have a year’s grace to implement their systems ready for the MT and MX co-exitance go-live BUT the final switch-off date remains the same and so this co-existence phase will be shortened by a year which is November 2025.

Why have they done this?

Following feedback from the community, Swift has moved the date of the initial phase back a year to 2022 but interestingly they quote “the end of 2022” and not a specific month/date which may allow them some grace to announce an official date of the turn-on.

What other ISO 20022 migration initiatives are affected? TARGET2, EURO1?

At the moment this is unclear, my thoughts are that these other initiatives already were using this migration plan as a benchmark for their own projects and the following quote from the Swift ISO 20022 programme timeline seems to support this also.

In line with that vision, SWIFT is fully committed to improving transaction data quality through ISO 20022 and will continue to accelerate industry support to adopt ISO 20022 for market infrastructure initiatives, including TARGET2 migration/ESMIG, EURO1 and Bank of England RTGS renewal.

What factors contributed to the delay?

This decision is solely based on the feedback of the community Swift as the original date crept closer.

Why has the feedback been to delay the start of migration?

From my viewpoint the migration of these payment messages was always going to be a huge project, when the announcement of this planned migration was announced in 2018 the feeling in the industry was that not all participants of the Swift gateway would be able to have their solutions in place by this time.

The amount of financial institutions on the Swift network coupled with the size of these participants varies drastically. My thoughts were that the large players in the market would be able to plan and implement solutions in time but for the smaller players, it may be more difficult to plan and afford either pre-built solutions or develop something in-house.

This decision allows all participants time to implement and test their solutions before the end of 2022 BUT there is now a shorter space of the co-existence period (i.e. the ability to send both MT and MX messages across the gateway) by one year.

What do I do?

My advice on this announcement is the same no matter if you are a big, small, medium FI, bank, vendor, payment service, developer, business analyst, tester….basically if you have a stake in this migration and you are designing/implementing a solution then:

Continue planning as normal and take this as a chance to better implement and test your solutions rather than postpone and wait.

I’ll detail the enormity of the challenge of migrating your environment to be ISO 20022 compliant in another post but my advice is to take this one year grace period to continue to design and implement your solutions ready for 2022.

You can never be too early (I would expect most people to already be in the design phase at the very least) and no matter where you are on the ISO 20022 migration journey my advice is to keep going and the good news is that in our industry there is always help at hand when it comes to advice and guidance on the best way of achieving this.