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Now is the time for The task is no simple venture, but the benefits of doing
so are huge and will pave the way for revolutionized
FIs to seize the ISO cross-border payment methods—from reducing resource
burden to a simplified and faster payment process.

20022 moment The countdown has begun,
save the date for compliance

All banks are on the countdown clock to make sure
their message interface at least supports the receipt
of ISO 20022-compliant messages (www.swift.com/
iso20022readiness). The migration of SWIFT and a range of
real-time gross settlement (RTGS) systems will broadly
take place over three years from November 2022 to
November 2025.

SWIFT won’t completely retire existing message formats
(MT and MX) or the FIN number system until 2025, but
the new ISO 20022-based CBPR+ system became an option
for early adopters in August and is generally available in
November.
Banks have their work cut out to
stay relevant in the fintech space

By Sumeet Puri Fintech startups have the advantage of being much
Solace younger and founded in the digital age. Their systems are
often created in the cloud and have a modern architecture
vent-driven architecture can drive business that gives them the agility to adapt to market trends and
opportunities for financial institutions (FIs) way regulation, the flexibility to innovate, and the opportunity
beyond just another ISO standard adoption. In to maximize the customer experience—especially across
E effect, SWIFT has become the official standard digital touchpoints.
for international payments, and it’s set to transform how
banks and financial services organizations process cross- In contrast, the legacy nature of older banking institution
border payments. IT systems means they generally encounter difficulties at
the best of times when trying to adapt, particularly in terms
Mandatory adoption of ISO 20022 standard comes into of scalability, flexibility, reliability and complexity. Banks
force this month, with the aim of solving traditional still have numerous manual touch points when handling
industry pinch points of delays, high costs and a lack of payments data, such as trying to reconcile missing data or
standardization. This article explores how FIs can use incorrect data.
event-driven architecture to not only reach ISO regulatory
requirements, but to unlock new business opportunities Multiple steps happen in each and every payment that can
for the future. further complicate and stretch legacy architecture. First,
there is the question of funding—without this we’re going
An average of 42 million payments and securities nowhere.
transactions were processed per day in 2021, via SWIFT’s
FIN (financial information) message service. Widely used Does the institution have the money? Is the money there
by a substantial network of banks to share money transfer in the savings account? When you’re funding from a
instructions, SWIFT messages orchestrate the transfer credit card account, can the funding occur within the
of nearly $5 trillion worldwide each day—it’s no wonder credit limits? Then, currency validation happens, further
SWIFT has become the world’s leading provider of secure complicated when tax considerations are raised. Finally,
financial messaging services and primary method of we’re through to clearing and settlement—where the
international funds transfers. exchange actually happens.
Seize the moment – but don’t
As a result, the mandatory November 2022 adoption of the run before you can walk
ISO 20022 standard by SWIFT will have a profound effect
on financial institutions across the globe. Each and every A recent EY report, How to unlock the power of enhanced data
FI will need to rethink how it sends payment instruction post ISO 20022, (https://go.ey.com/3Ehhlh5) zeroes in on the
messages, while juggling a competitive market in various technology change required to meet ISO 20022 standards:
stages of adoption. “Setting up the right technology and infrastructure to
benefit from this will be a key measure of success, as it

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