ISO 20022 migration: A step-by-step guide

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ISO 20022 migration: A step-by-step guide

The financial sector is on the cusp of a significant transformation, with ISO 20022 poised to overhaul global financial messaging. 

This transition is not merely a technical update but a strategic shift that promises to enhance the efficiency, interoperability, and compliance of financial transactions worldwide. 

With the Swift mandate on the horizon, the move towards ISO 20022 will impact several financial messages, influencing the operational and client engagement frameworks of financial institutions. 

ISO 20022 is slated to become the predominant standard for international cross-border payments by 2025, changing how financial data is exchanged globally.

6 steps to ISO 20022


Step 1. Assessment

Assessing the impact: The migration to ISO 20022 will impact various functions of financial institutions and require adjustments in operational workflows and client services. The wide array of messages affected by this change underscores the significant operational implications of this move and the need for meticulous planning and execution to ensure the transition happens seamlessly.

Defining the Scope: Starting in March 2023, a diverse range of MT messages, including but not limited to business application headers and various credit transfers, have been systematically migrated to ISO 20022 formats. This transition, culminating in 2025, signals a move towards a more data-rich and efficient operational efficiency in cross-border payments.

Step 2. Pre-migration planning

Strategic planning: Crafting a strategic plan that aligns with an institution’s business objectives and regulatory mandates is crucial. This plan must encompass a detailed inventory of the messages and systems impacted, ensuring a seamless transition through the phased adaptations leading to full adoption in 2025.

Stakeholder engagement: Successful migration to ISO 20022 will require early and active engagement of all stakeholders, including IT departments, operational teams, compliance units, and external partners. This collaborative approach is vital for addressing the challenges inherent in such a comprehensive migration process.

Risk assessment and management: Conduct a thorough risk assessment to identify potential obstacles and strategise how to tackle them. Effective risk mitigation strategies will help ensure a smooth transition to ISO 20022.

Step 3. Detailed migration timeline

Preparation phase: This involves conducting gap analyses, allocating resources, and initiating training programs. Institutions must gear up, as the first wave of migrations started in March 2023, laying the groundwork for the subsequent phases leading to 2025.

Implementation phase: This phase includes system upgrades, rigorous testing, data mapping, and validation efforts. A phased approach is essential for managing the wide array of messages transitioning to ISO 20022, ensuring that each step is executed with precision and efficiency.

Go-live and post-implementation: Finishing the transition means you are live with a new standard, which means it’s time for ongoing support, monitoring, and optimisation. These steps are critical for addressing any challenges that arise post-migration.

Step 4. Key implementation steps

Technology upgrades and integration: Migrating to ISO 20022 requires technological upgrades and the integration of ISO 20022-compliant solutions. This process is crucial for accommodating the new messaging standard across all operational platforms.

Data quality and mapping: The integrity and consistency of financial data are paramount. A comprehensive mapping process is required to transition existing data formats to the ISO 20022 model, ensuring the high quality and standardisation of data.

Testing and validation: Rigorous testing protocols are essential to verify that systems and processes are fully compliant with ISO 20022 standards and are functioning as intended.

Step 5. Preparation tips for a smooth transition

Early preparation: An early start to the migration process can help manage unforeseen challenges.

Training and communication: Comprehensive training for staff and clear communication with clients about the impending changes can ensure organisational readiness.

Leveraging expertise: Engaging experts with prior experience with ISO 20022 migrations can provide invaluable insights and guidance throughout the process.

Step 6. Key considerations during the migration

Continuous monitoring and optimisation: The migration journey does not end with the implementation phase. Continuous monitoring and the willingness to make necessary adjustments are essential for maximising efficiency and ensuring compliance with the ISO 20022 standard.

Regulatory compliance: Institutions must remain aware of regional and global regulatory requirements that may affect the migration timeline or specific aspects of the transition.

Stakeholder communication: Maintaining open lines of communication with all stakeholders will help manage expectations and ensure a collaborative and seamless migration experience.

The transition to ISO 20022 is a monumental step towards harmonising global payment standards that requires early preparation, strategic planning, and unwavering support of all facets of a financial institution. 

As the industry moves towards this new standard, institutions are encouraged to embark on their migration journey without delay. 

The transition will enable them to reap the long-term benefits of enhanced data exchanges, innovative banking products, and superior operational efficiency.


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About the Author

Carter is a Research Associate at Trade Finance Global focusing on the impact of macroeconomic trends and emerging technologies on international trade.

He holds international business and science degrees from the European Business School in Germany as well as Brock University and Queen’s University in Canada where he served as the director of operations and finance for the student executive council and as an operations associate for the Queen’s University Alternative Asset Fund. Carter’s work has been featured in publications and articles supported by the SME Finance Forum, managed by the International Finance Corporation, World Trade Organization, and International Chamber of Commerce.

Carter is a graduate of the Trade Accelerator Program (TAP) through the Toronto Board of Trade and the head of international business development at the Canadian-based building supply exporting firm, The Great Egress Co. He is also a Certified International Trade Professional (CITP) and a member of the exam development panel for the Forum for International Trade Training (FITT) where he developed exam questions for the update of the CITP Professional Exam as part of FITT’s application for ISO 17024 Accreditation.

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