When the Sibos 2025 conference was kicked off in Frankfurt, it was impossible to miss the positive vibes expressed during early addresses and attendee sessions, despite all the changes and challenges now facing the ‘traditional’ financial services industry.
Indeed, those same Sibos luminaries and other banking industry leaders who extolled the potential opportunities for cost-savings, increased efficiency, and new value-added services for banks offered by AI, digital currency expansions, and an increasing number
of real-time and alternative payment and transaction rails and channels also expressed optimism surrounding an "old" but critically important priority of the Swift organisation and its members: ISO 20022 adoption.
ISO: the “old” idea that still offers compelling advantages to banks and corporate clients
Given the impending rollout of the long-discussed ISO 20022 standards [to replace the more than 50-year-old Swift MT character set and frameworks] and the looming November adoption deadlines established by Swift for its members, it shouldn’t have been a surprise
that it remained a key topic for discussion at Sibos. Even though people were eager to talk about more recent, and perhaps more ‘glamourous’ subjects like stablecoins, instant payments and regional interoperability - not to mention agentic AI use cases finally
being piloted and proven effective around the globe.
We found lots of passionate and pragmatic reasoning in sessions and individual interviews on why the new ‘rules of engagement’ for common, yet enhanced cross-border transactions and reporting would eventually prevail. Our first stop on this particular journey
led us to The Clearing House (TCH). This is the New York-based, bank-owned industry consortium and payments company that manages the huge USD-clearing mechanism CHIPS, its own offshoot of the ACH network [handling
around half of the country’s commercial transaction volumes], an image exchange facility, and instituted and runs the Real Time Payments (RTP) network, first of its kind in the USA. We visited
with TCH’s Michael Knorr, SVP, CHIPS product management and VP and communications head Greg MacSweeney at their Sibos booth.
Asked about ISO 20022 advantages and industry progress toward meeting the deadlines arriving soon for its adoption by banking institutions, Knorr, responsible for TCH’s wire payments, liquidity management, and cross-border payments was bullish on the new
standards capabilities and benefits offered for financial institutions and especially their corporate customers. Yet he and MacSweeney also noted that the TCH organisation was not in as strong a position to advocate for adoption of the new ISO rules as Swift
member banks themselves. That’s even given all the clearly defined advantages offered by the ISO’s new MX format and character set compared to the decades-old MT messaging rules. These include its universal consistency, better data management capabilities,
and the ability it provides for enhanced remittance details to travel with payment and trade transactions [and simplify] invoice and payment matching reconciliation processes for businesses from large to small. The last one could be a particularly impactful,
huge hassle-saving, cost-effective game-changer for many commercial organisations across the globe.
"Banks have to do more" to impress upon their clients how important (and mutually beneficial) ISO adoption will be for them and their correspondent bank partners and customers, Knorr said. As with real-time payments, now offered in the US by TCH’s RTP network
and recently as well by the Federal Reserve’s FedNow service, so much of the work associated with commercialising any new payment method or rail is knowing the features and advantages available, then explaining them and developing sensible, practical use cases.
Then talking about them internally and externally with users and potential users of the rail, answering questions so everyone involved understands the costs of participating, or not, Knorr explained.
Urgency to adopt is real: not worth implementing ISO on an island, says banker
One presentation from industry experts and innovation advocates at the conference,
The journey to rich data: What’s next for ISO 20022, featured experts/practitioners from Swift, ABN AMRO, Standard Chartered, KPMG, and Federal Reserve Financial Services. From their discussion, it is clear that they all agree with Swift’s sense of
urgency for financial institutions [and their corporate clients as well] to fully convert their systems to the new MX syntax and framework from legacy MT messaging standards.
As the title states, the advantages to banks and corporate clients in terms of enhanced data and remittance details and simplified, standardised language for all sorts of cash and trade-related transactions and reports are too important to turn back from
now. While it’s not likely that the forward momentum for ISO adoption will cease, there is no doubt that progress thus far has been disappointing, with just over 60% of all financial institutions reporting compliance ahead of the Swift-mandated switchover
to MX standards coming to all network participants less than two months from now.
ABN AMRO's Charles Bunnik, market infrastructures manager for the Netherlands-headquartered bank, noted that his institution was fully committed to the new ISO standards, but that they couldn’t - and hoped they wouldn’t have to - make that important journey
to greater capabilities and flexibility in transaction processing and reporting alone.
"We need to do more as an industry to really reap the benefits from ISO 20022, otherwise we invest a lot, and we will never, ever realise the benefits. This is, for me, a major concern, and this is why I'm asking you to step up your game and really adopt
it. This is really what we need to do. At ABN AMRO, we've taken an ISO native approach, which means that all of our systems are ISO. And if you use ISO, you get your data model right, and then you can start reaping the benefits. But if we're the only bank
doing it - luckily, we're not, because we're at 64% [adoption by Swift-affiliated institutions] then we're not going to reap the benefits. So, this is a call to action to actually, really adopt [the ISO standards.]"
Courtney Trimble, global head of payments, KPMG expressed some of the consternation, and weariness, as well as the hope for long-sought improvements in multiple arenas of commerce that many ISO advocates have been talking about and experiencing for a while
now. "There’s been a lot of energy and investment going into ISO 20022...there still is...and a lot of blood, sweat and tears [shed] by all the banks. So now it's really time to bring the benefits of ISO 20022 [to the industry.]"
Trimble referred to encouraging statistics on enhanced capabilities and volumes shared earlier in the session by Standard Chartered’s Joanne Fraser. The UK based bank, like ABN AMRO, is also now ISO-native in operation. "You know, [as Joanne talked about],
you have so much more rich data. You have 30 to 40% additional data traveling with the payment that not only allows for great opportunities, such as straight through processing and some of the other [efficiency benefits] for financial providers, but taking
that data to create new value added services for corporate clients, and revenue streams for the banks."
Key corporate benefits build on ISO’s data richness, new revenue opportunities for banks
In summing up the reasons to put ISO firmly in place across the FI and large corporate arenas, the panellists noted that AI is ideally suited to complement the advances brought with the new Swift messaging standards. Given all the positives ISO brings to
both banks and their clients, it would be a true shame to slow down on the process changes and explorations of new opportunities for efficiency, cost-savings, and new revenue opportunities for financial institutions now, she said.
“A lot of work has been performed with the banks to get to ISO 2022 conversion, but great benefits [are also available] for the corporate clients. Some of the overarching opportunities that we're seeing", Trimble explained are: "Faster reconciliation. Greater
straight-through-processing (STP). Structured and standardised data that really reduces the cost of operational repairs, operational cost, (increasing) cost efficiency. Harmonisation with cross border payments across the globe. Real time treasury (cash) positions."
The last one in particular is an especially compelling benefit available from ISO 20022 to corporate customers, Trimble concluded. "Treasury Departments are looking to gain instant, detailed insights into cash and liquidity, so that data quality (of ISO)
is better, which is helpful. And then the interoperability available with ISO data, and then also enhanced reporting as well. I think one of the keys for corporates is to understand the benefits of ISO," that await them once they embrace the new standards.