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Canada latest to delay ISO 20022 migration

Canada latest to delay ISO 20022 migration

Canada's high-value payment system's move to ISO 20022 will be delayed until March in order to keep in step with the recently postponed migration to the message standard by Swift and the Eurosystem.

Canada's Lynx was set to go live with its second release this month, introducing ISO 20022. However, while the technology needed to support the release will still be deployed as planned, it will not be activated until next March.

Payments Canada's decision to delay comes after consultation with Lynx users in order to align with Swift's ISO 20022 migration for cross-border payments and reporting (CBPR+) - which was itself recently put back from November to March.

Swift made its move in response to the ECB's decision to delay the launch of the Eurosystem's new real-time gross settlement system and central liquidity management model, T2 - which is based around the use of the new messaging standard - from November to March in order to give some member states more time for testing.

Last month, Payments Canada was forced to delay the launch of another if its flagship projects - the Real-Time Rail payments system - from the middle of next year to an as yet undetermined date.

Comments: (2)

Zhenya Winter
Zhenya Winter - Bottomline Technologies - London 03 November, 2022, 13:52Be the first to give this comment the thumbs up 0 likes

This was inevitable with FedNow postponing their deadline to 2025, SWIFT's extension of the CBPR+ deadline to March 2023, The European Central Bank  pushing the date for Target2 to April 2023, and it looks like the Bank of England will follow suit for the UK.

This is happening due to pressure from the banks who are worried about juggling this deadline within an already busy road-map and also concerns about how this extra data could lead to truncation. The beauty of ISO 20022 lies in the global standard providing interoperability and clearly this doesn’t work if some banks have it and some don’t. It doesn’t make sense for banks to all move at different speeds. I want to express that these deadlines only represent the start of the journey for ISO 20022 which is to have basic connectivity – so to be able to receive messages for SWIFT in the ISO messaging format - and as far as I am aware there is no suggestion that this will impact the deadline for the end of the SWIFT co-existence period of 2025.

However, the view at Sibos, and also held by Bottomline, is that the sooner you can fully leverage the advantages of ISO the better. That means looking to be ISO Native as soon as possible and not wait until 2025. There is the compromise of ‘Market Ready’ where banks can send and receive, but with the need for translation. Whereas, ISO Native is when ISO 20022 is integrated across your whole payments ecosystem with no need for translation.

We aren’t fully aware of all the use cases for ISO and we won’t find out until we have integrated ISO fully and started brainstorming and having a play around. The sooner you start exploring these new use cases the sooner you can gain competitive advantage over other banks. However, the wider benefits that we do know include: high-levels of transparency, better customer service, and of course, improved operational efficiency.

After all, ISO 20022 provides the standardisation needed for interoperability between traditional and new cross-border channels and the abundant availability of rich data and related (artificial) intelligence allows us to route payments intelligently and to choose the right channel for each transaction, whether it is to drive new coverage in markets or currencies, or to optimise the execution in existing markets. In my opinion, the impact that the richer data will have on fraud monitoring & compliance, cash-flow management and of course data and analytics, provides justification enough for the immediate transition to being ISO Native and having ISO front and centre of any bank’s roadmap.


Zhenya Winter
Zhenya Winter - Bottomline Technologies - London 03 November, 2022, 18:46Be the first to give this comment the thumbs up 0 likes

Clarification: the Fed postponed the new Fedwire Funds Service support of ISO20022 to March 2025 - the Fedwire Fund Service is not part of the FedNow initiative (at least not yet!)