Blog article
See all stories »

20022 after 2020

SWIFT payments and related messages are changing to ISO 20022 standard in the coming three years and these changes will be market mandatory over the medium term.

At this point the key action item is to approve seed funding to develop detailed Impact Assessment(s) and Implementation Plans during 2020. 

Context – what’s changing, why, and when:

Message standards and transport are fundamentally changing in the medium term, primarily driven by rebuild of Payments Market Infrastructures in the US, UK, EU and elsewhere. Securities, FX, and Trade Finance are less of a priority at this point.

SWIFT are currently proposing a regional implementation approach.

The key business change revolves around end to end traceability of beneficiary which should reduce the friction in cross-border payments, and the need for intervention and repairs:  increasing efficiency and visibility. Dealing with errors and tracing payments becomes easier, and there are also positive implications for KYC, AML and sanctions screening.

However a new and richer message language needs to be learned, both functionally and technically; not only for payments, but also for statements and reconciliations.

These changes are business-critical, significant in scale, and market wide.


Three visible strategies as a response:-

  • Market leader/prime mover, reengineer processes, extend Products and Services such as Instant Payments, Real Time Liquidity View, and intraday reconciliation
  • Mid-range response, keeping pace with market and competitor changes (likely to result in loss of market share)
  • De minimis delayed response, assuming either market wide slippage and/or vendor driven translation and migration solutions become ubiquitous and ongoing.

Running BAU in the interim is a non-trivial task and managing change control for existing payments servicing has to be executed in parallel unless the de minimis path is taken.

ISO20022 is XML based, and most organisations will have little difficulty in managing the technical migration to XML, since almost all recently developed package and bespoke applications are XML-friendly. There will however be legacy applications that can’t handle XML - and inevitably translation or transformation strategies will need to be developed.

Interestingly, SWIFT are planning to offer a centralised subscription based translation service starting in November 2021 – however this potentially helpful in-line offering will likely require significant per-firm configuration and testing effort at the firm level, and will not solve the issues around message truncation for 20022 data overflows. A centralised tool will not insulate Banks from needing to invest and resource to manage to change to 20022.


Various risks will arise as a function of ISO20022 migration and these will include:-

  • Reputational – market leader/follower and client response
  • Operational – process, data and reconciliation changes which is poorly handled will lead to real world operational cost and risk uptick
  • Liquidity : opportunity to reduce liquidity buffers and associated regulatory capital could be harvested, or missed
  • Vendor – need to manage multiple vendors in the delivery chain and ensure the priority and visibility or User Group voice needed

The regional approach proposed by SWIFT, aligned to Market Infrastructure players, will have variable impacts and risks since few if any firms are unlikely to have globally consistent internal infrastructure and application architectures. Prima facie, AsiaPac and home markets will be the particular focus here.

If the migration to 20022 is not well managed, firms will attract negative attention from Regulators and Clients, whilst watching margins decline. Not an attractive scenario. 

Next Steps

At this point, post SIBOS 2019, that seed funding for initial planning needs to be approved for 2020 such that initial strategy is socialised and agreed, meaning that Build/Implementation Plans are ready to go by end 2020. An initial Impact Assessment and team mobilisation are key actions for 2019 into 2020.



Comments: (0)

Simon Bennet

Simon Bennet

Partner & Co-Founder

Domain Matters

Member since

12 Mar 2019



Blog posts


More from Simon

This post is from a series of posts in the group:

Payments strategies 2015-2020-2030

Payments systems visions, strategies, trends, pilots, forecasting, and planning for the short-, medium-, and far-term.

See all

Now hiring