ISO 20022
ISO 20022 is an international standard for exchanging electronic messages between financial institutions.
It is one of the many standards developed by the International Organization for Standardization (ISO).
It is expected to lower operating costs, improve risk mitigation and usher in a more inclusive financial system.
Benefits of ISO 20022
Enhanced customer satisfaction
Due to an upgraded service
Improved digital compliance
Digital compliance, due to richer and more structured information that simplifies fraud prevention
Increased efficiency and straight-through processing
(STP) rates due to a more standardised format and structure
Reduced costs
with the simplification of processes such as investigations, data analytics and reporting
Why ISO 20022 migration?
Establishing a worldwide standard for communication will eliminate many of the existing challenges that exist when exchanging messages that facilitate funds transfers, cross-border payments, clearing and settlement, securities transactions, reporting and all other types of financial activity.
Currently, financial institutions, market infrastructures and market participants use a variety of standards, which has resulted in inefficiencies, barriers to automation and challenges for global interconnectivity.
The recent adoption of ISO 20022 by major financial industry stakeholders such as central banks, financial institutions, market infrastructures and the Society for Worldwide Interbank Financial Telecommunication (Swift) is accelerated by the increasing importance of transparency for payments and money transfers.
What makes ISO 20022 different?
- It is richer, better defined and more granular than its predecessor Swift MT.
- It improves the quality and consistency of data across messages and financial processes as well as the automation of its processing.
- It will create interoperability between various settlement networks using far richer payment data that should result in higher levels of STP as well as more efficient compliance processes, which will allow banks and corporates to improve services to their customers and counterparties.
How this affects cross-border payments
Cross-border Payments and Reporting Plus (CBPR+) is a set of specifications for ISO
20022 financial messages over the Swift network. CBPR+ messages over Swift are also referred to as ‘MX’ messages as they differ in format from the traditional MT messages used over Swift. Swift will begin supporting CBPR+ messages on its network in March 2023. CBPR+ applies only to flows from one financial institution to another.
Swift MT messaging is a legacy non-XML proprietary message format, while MX messages are the XML-based replacement for MT messages. Both can coexist and will do so initially, with MT to phase out post a pre-determined time (November 2025).
ISO 20022 aims to evolve current MT formats for cross-border payments to ISO 20022 MX formats. To do so, Swift has put in place tools and documentation at the disposal of financial institutions such as guidelines for migration, message specifications and training to accompany financial institutions in their transition to ISO 20022.
Transaction Manager Platform ISO 20022
Transaction Manager is a platform developed by Swift to support the ISO 20022 migration and provide enhanced messaging capabilities for the Swift community.
The platform keeps a copy of a transaction’s data which can be updated by parties to the transaction using different protocols and formats. It will support the coexistence of MX and MT messages during Swift’s interoperability period of the ISO 20022 migration by preserving rich ISO 20022 transaction data even when an intermediary in a transaction can only send MT messages.
This will benefit financial institutions by:
- Providing them with ample time to ensure that they are MX ready,
- Lowering the implementation risks compared to a big-bang approach,
- Allowing banks to follow the agile approach and
- Facilitating testing.
-
Why ISO 20022 migration?
-
What makes ISO 20022 different?
-
How this affects cross-border payments
-
Transaction Manager Platform ISO 20022
Establishing a worldwide standard for communication will eliminate many of the existing challenges that exist when exchanging messages that facilitate funds transfers, cross-border payments, clearing and settlement, securities transactions, reporting and all other types of financial activity.
Currently, financial institutions, market infrastructures and market participants use a variety of standards, which has resulted in inefficiencies, barriers to automation and challenges for global interconnectivity.
The recent adoption of ISO 20022 by major financial industry stakeholders such as central banks, financial institutions, market infrastructures and the Society for Worldwide Interbank Financial Telecommunication (Swift) is accelerated by the increasing importance of transparency for payments and money transfers.
- It is richer, better defined and more granular than its predecessor Swift MT.
- It improves the quality and consistency of data across messages and financial processes as well as the automation of its processing.
- It will create interoperability between various settlement networks using far richer payment data that should result in higher levels of STP as well as more efficient compliance processes, which will allow banks and corporates to improve services to their customers and counterparties.
Cross-border Payments and Reporting Plus (CBPR+) is a set of specifications for ISO
20022 financial messages over the Swift network. CBPR+ messages over Swift are also referred to as ‘MX’ messages as they differ in format from the traditional MT messages used over Swift. Swift will begin supporting CBPR+ messages on its network in March 2023. CBPR+ applies only to flows from one financial institution to another.
Swift MT messaging is a legacy non-XML proprietary message format, while MX messages are the XML-based replacement for MT messages. Both can coexist and will do so initially, with MT to phase out post a pre-determined time (November 2025).
ISO 20022 aims to evolve current MT formats for cross-border payments to ISO 20022 MX formats. To do so, Swift has put in place tools and documentation at the disposal of financial institutions such as guidelines for migration, message specifications and training to accompany financial institutions in their transition to ISO 20022.
Transaction Manager is a platform developed by Swift to support the ISO 20022 migration and provide enhanced messaging capabilities for the Swift community.
The platform keeps a copy of a transaction’s data which can be updated by parties to the transaction using different protocols and formats. It will support the coexistence of MX and MT messages during Swift’s interoperability period of the ISO 20022 migration by preserving rich ISO 20022 transaction data even when an intermediary in a transaction can only send MT messages.
This will benefit financial institutions by:
- Providing them with ample time to ensure that they are MX ready,
- Lowering the implementation risks compared to a big-bang approach,
- Allowing banks to follow the agile approach and
- Facilitating testing.
The Standard Bank Approach
Swift and Standard Bank are constantly re-evaluating the risk elements of the overall changes to accommodate a risk-adverse approach. We have amended our implementation to support a controlled migration for sending ISO messages, while meeting the minimum requirements to receive ISO messages from correspondent banks.
During the coexistence period, CBPR+ Interact (MX) messages will utilise the traditional FIN X character sets to support translation. Several additional special characters will be permitted: all party (agents and non-agents) name and address elements, the related remittance information elements and the remittance information (structured and unstructured) elements.
All Swift users must ensure that they upgrade their interface so that they are able to receive MX messages.
We will have a period of co-existence where Standard Bank will receive, send and process MT, multiformat and ISO message types as detailed in the table below.
Multiformat and ISO Message types
| Type | MT Migration to ISO 20022 CBPR+ MT Message |
MT Migration to ISO 20022 CBPR+ Equivalent CBPR+ ISO 20022 Message |
Standard Bank's Approach |
|---|---|---|---|
| Payment Instructions | MT101 | pain.001 pain.002 in response to pain.001 |
Standard Bank does not send MT101 and will remain receiving the MT101 message post 20 March 2023. The transition to the CBPR+ ISO 20022 format will take place post 20 March 2023 upon conclusion of a bilateral agreement with the sending bank. The receipt of the CBPR+ ISO 20022 message is not enabled on RMA Portal. |
| Payments and Settlements | MT103 MT202 MT202 COV MT210 |
pacs.008 pacs.009 pacs.009 cov pacs.004 pacs.002 (reject only) camt.057 |
Standard Bank will be able to receive both the CBPR+ ISO 20022 messages and the MT messages from 20 March 2023. Standard will continue to send the MT messages from 20 March 2023, and will migrate to sending the CBPR+ ISO 20022 equivalents through a phased migration, post 20 March 2023. |
| Stop and Recall | MT192 MT292 MT196 MT296 |
camt.056 camt.029 (in response to camt.056) |
Standard Bank will be able to receive both the CBPR+ ISO 20022 messages and the MT messages from 20 March 2023. Standard will continue to send the MT messages from 20 March 2023, and will migrate to sending the CBPR+ ISO 20022 equivalents through a phased migration, post 20 March 2023. |
| Statements and notifications | MT900 MT910 MT920 MT935 MT940 MT942 MT950 |
camt.052 camt.053 camt.054 camt.060 |
Standard Bank will only send and receive the MT message format as of 20 March 2023. The transition to the CBPR+ ISO 20022 format will take place post 20 March 2023 upon conclusion of a bilateral agreement with the sending bank. The receipt of the CBPR+ ISO 20022 message is not enabled on the RMA Portal. |
| Cross Border Debits | MT204 | pacs.010 | Standard Bank will only send and receive the MT message format as of 20 March 2023. Standard Bank will migrate to sending the CBPR+ ISO 20022 equivalents upon conclusion of a bilateral agreement with the sending bank. The receipt of the CBPR+ ISO 20022 message will not be enabled on the RMA Portal. |
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