ISO 20022
The end of SWIFT co-existence period is fast approaching. If your organization is struggling to get to grips with ISO 20022, speak to RedCompass Labs today.
What is ISO 20022?
ISO 20022 is a global standard for financial messaging, providing a common platform for the development of messages used in the financial industry. It aims to standardize the way financial institutions communicate by offering a unified methodology for message creation, regardless of the specific communication channel, including APIs.
With ISO 20022, banks will be readily able to integrate with one another’s APIs, seamlessly transfer data and facilitate currency exchanges in real-time. ISO 20022 is the messaging standard that will enable new financial methodologies such as Instant Payments, Open Banking and Account-to-Account payments.
ISO 20022 has been around since 2004, but many banks are only just beginning to migrate their communications framework. Banks have until November 2025 to ensure they are compliant with ISO 20022.
The ISO 20022 deadline is approaching
Despite extending the original deadline to November 2025, many banks are still struggling in their efforts to implement ISO 20022. At this point, SWIFT will transition from its legacy MT messaging to ISO 20022 for cross-border payments. Institutions that are not ready by November 2025 face inevitable disruptions.
18%
As of November 2023, less than one fifth of financial institutions had initiated in ISO 20022 – way below industry forecasts.
63%
And a 2023 study by Seeburger found that only 63% of banks feel prepared for the switch to ISO 20022, meaning over a third are unready.
43%
A Bottomline poll found that nearly half of banks find end-to-end processing chain readiness the greatest challenge of ISO 20022, while 41% said it was supporting additional data.
How will ISO 20022 benefit you?
Not only will ISO 20022 enable your bank to achieve new standards of interoperability, the headline benefits from global standardization to fraud protection, will scale in correlation to the number of financial institutions embedded within the framework. The more banks are able to communicate with each other in an interoperable space, the more benefits will start to be gleaned.
While uptake has so far been slow, the headline benefits should entice any financial institution to begin their migration sooner rather than later.
Global standardization
With banks able to exchange data instantly and seamlessly, ISO 20022 enables financial revolutions such as Instant Payments, Open Banking and Cross-border Payments.
Richer data
ISO 20022 messages carry more detailed payment information. This will help to streamline reconciliation, while also ensuring that data exchanges are more secure and compliant.
Fraud detection
ISO 20022 improves security and compliance by making it easier to detect fraudulent transactions, align with global regulatory frameworks, and resolve issues.
Future-proofing
Even as regulation and compliance changes, ISO 20022 can adapt seamlessly to make sure your bank delivers long-term strategic value.
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Why choose RedCompass Labs?
We’ve helped some of the biggest banks on the planet embrace the future of payments.
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How RedCompass Labs can help
Prepare for ISO 20022 with RedCompass Labs
If you’re struggling to get to grips with ISO 20022, RedCompass Labs is here to help. Speak to us to get started on your migration to ISO 20022 right away.