Moons analogises that yes, while it may be possible to put Netflix onto an old black and white TV, it would cost an extortionate amount of time and money to do so - not that you’d be able to enjoy the high-resolution (data-heavy) images of a recent blockbuster anyway.

“When you look at ISO 20022 and its potential, having the additional data and possibility for embedding services, it’s clear that it is a more profound shift than an evolution from for example, the black and white TV to colour TV.”

Sara Castelhano, EMEA head of payments and solutions, JP Morgan, agrees that “ISO 20022 has become such a phenomenon because it enables more information to travel in a transaction, which can aid financial instructions and corporates to really benefit from focusing on payment data to enable value added services.”

This idyllic goal, however, is only as good as the sum of its parts.

“It’s really important that the end-to-end chain is passing the information smoothly because if one party in the chain truncates information it impacts the whole life of that transaction,” Castelhano adds.

Echoing the concern of fragmentation, Petia Niederlander, head of retail & corporate operations, ERSTE Group Bank AG, comments that the enrichment of data is fundamental to compliance concerns because without the right kind of structured data it is a “garbage in, garbage out” type of situation.

“While the need for strong, structured data is well understood, we are concerned about the significant difference in readiness between tier one banks and their smaller counterparts. You might see smaller banks approach ISO migration through translation services by technology vendors because they don’t necessarily have the means to undertake the process independently.”

“I’m afraid that these two different approaches may lead to fragmentation because smaller players relying on translation services may not address processing or data quality changes until after the go-live date. If bigger players plan to be live on the architecture from day one (or soon thereafter), when the two approaches meet in the interconnected ecosystem, we may be faced with a lot of fragmentation and data breaks.”

Painting a vivid image of another core challenge presented by ISO 20022 migration, Daragh Kirby, head of sales and marketing, Intercope, explains: "You can't drive an 18-wheel articulated lorry down a small country road. Banks need to know how to capture and harvest the information that ISO 20022 brings, and whether the necessary plumbing is correctly in place.”

Kirby furthers that the banks which took a strategic view around SEPA in 2008, by investing in things like generic services and payments hubs were able to (try and) build a generic view of payments which removed a siloed approach.

“These banks are definitely in a better position today than those which took a tactical or compliance-based approach.”

He warns however, that danger remains even for these prepared FIs because the schemes are currently doing different things. CHAPS, TARGET, CBPR+, Kirby notes that while some of these are going like-for-like, other are choosing to go “fully enriched” from day one. While buzzwords like coexistence or truncation management plague these conversations, he insists that they are very real, very important considerations for banks to address.

Pressing on this topic, Moderator Teresa Connors, managing director, Payment Matters, questioned whether it is indeed possible to widen the metaphorical road when there is still traffic in the form of existing payments relying on these systems in parallel?

“You simply need to put services and software in place that allows you to do both MT and MX. You really have to have something clever in place. There is a danger with like-for-like mapping that banks may kick the can down the road by allowing someone else to provide the transformation at the network layer.”

Kirby concludes that banks must keep an eye on effective preparation for enriched data and the avoidance of siloes. To find themselves with siloed data would just mean banks will end up with what they had previously - only burdened with a larger data footprint.

Finextra’s The Future of Payments report explores how new business models, new operating models and new forms of collaboration are the catalyst for the 2020 payments ecosystem. Click here to download.