ISO 20022, a single standard approach to facilitate communication interoperability between financial institutions, their market infrastructures, as well as their end-users, has issued a deadline for both corporate bodies and financial institutions to get their systems ISO 20022-ready by November 2025.
A survey conducted by Seeburger and Celent polled 211 banks and corporates globally to gauge where they currently stand in the process.
All payments must migrate from SWIFT MT to ISO 20022 as it is poised to enhance the quality of payments data, from end-to-end, thereby improving efficiency, compliance, and the overall customer experience.
Given the many benefits of fully migrating into ISO 20022, the survey found that, out of the 11,000 global banks that are members of the SWIFT network, only 72% are projected to migrate to the new standard by the deadline. That accounts for 5,000 global banks that will not be ready. Missing this deadline could mean that existing products and services provided by banks could be rendered inoperable.
What’s more, only 8% of banks worldwide believe that the entire industry will be 100% prepared by the deadline. Conversely, 56% of North American banks believe they will make the deadline. The area which demonstrated the most promise was the Asia-Pacific region, where 73% of banks expect to be ready by November 2025.
Interestingly, those surveyed were fully aware that the migration to ISO 2002 would bring a host of benefits. Roughly 84% of respondents said they believed they would benefit, especially with AML and fraud prevention. And 33% said the additional data could be used to enhance corporate services.
However, before banks can take advantage of these benefits, the new messaging format must be fully implemented. It is also contingent upon how the bank has addressed the migration, and if the corporate can create and process this data. If processes are not fully carried out, these aforementioned benefits may never be realized.
Some corporates believed that their banks were not too keen on the migration itself. Some 15% of corporates with more than $15 billion in revenue also reported that they have received little information from their bank that a migration is taking place.
The Bottom Line
Although some corporates and financial institutions know the benefits of implementing ISO 20022, data shows that there is still a lack of knowledge. Or if there is knowledge, banks are not passing this vital information down to their corporate partners.
The study also highlighted that over $2 trillion has been spent by corporates and banks collectively to invest in new technology to adapt to the new system. However, this has been dubbed more of a “fragmented, bare-minimum approach.” It will be interesting to see how both corporates and banks will navigate the new migration and the subsequent results of their approach.