A significant number of large banks say they won’t be ready to adopt ISO 20022 protocols in time for its arrival in 2025, and many of their customers aren’t prepared either. But Swift is attempting to address this issue. The global cooperative has announced a solution for payment initiation, developed in collaboration with dozens of banks and corporate entities, using the ISO 20022 format as part of a major effort to iron out inconsistencies in the use of the messaging standard.
ISO 20022 presents a single standard approach to facilitate communication interoperability between financial institutions, their market infrastructures, and their end users. The deadline for both corporate bodies and financial institutions to get their systems ready is November 2025, or 18 months from now.
“ISO 20022 is a meaningful initiative in the pursuit of a more robust and standardized messaging format for payments,” said Albert Bodine, Director of Commercial and Enterprise Payments at Javelin Strategy & Research. “The challenge is that it, by design, was made to be flexible so there are many variations of implementations globally. That’s not necessarily a bad thing and the benefits far outweigh the downsides. It does highlight however how important it is to partner with companies that are experts in ISO 20022.”
Swift Takes the Lead
Swift is working with 25 cash management banks and 20 corporates to develop a white-labeled transaction tracking service for ISO 20022 messages across the entire payment chain. The goal is tostandardize corporate payments complicated by competing standards and proprietary formats. Swift will also help member banks offer their customers ready-made ISO 20022 payment tracking services via API or messaging channel, providing complete transparency on a payment’s status as well as confirmation of its receipt.
Swift says that by standardizing the payment tracking data, financial institutions will be able to offer the same experience across their corporate customer base. Thierry Chilosi, Chief Strategy Officer at Swift, says that the new capabilities will be extended across its wider community later this year.
“Capturing rich data at source will enhance the entire ecosystem, driving us closer to our goals of instant and frictionless transactions,” Chilosi said in a prepared statement. “We’re delighted to be making it easy for our community to extend the benefits to their customers while simplifying and standardizing access to services, such as tracking, which are so important to efficient corporate treasury.”