Cross-Border Payments

The Challenges and Opportunities of ISO 20022

Vasco Rodrigues
Vasco Rodrigues

The worldwide payments industry never stands still. And in 2022 we’ll accelerate to a more coherent and frictionless global trade environment, as banks and financial institutions transition to ISO 20022.

ISO 20022 is a new benchmark standard that creates a single messaging model or ‘language’, for financial data exchange. By the end of this year, all businesses or institutions that send or receive payments-related SWIFT MT messages will begin a global transition to the ISO 20022 standard. Come the end of 2025 this will be the worldwide standard for payments.

More than 70 countries have already adopted the new method in their payment systems; over the next few years it is set to be the standard for high-value payment systems of all reserve currencies, supporting 80% of global volumes and 87% of the value of transactions worldwide.

There are many positive benefits from transitioning to ISO 20022. The move will help businesses to streamline operations, ensure and demonstrate greater traceability, reduce fraud and human error, and enhance cross-border trade. But businesses also face logistical and technical obstacles to make a success of the leap to the new standard.

ISO 20022 – A path to worldwide coherence ISO

20022 is an international standard developed by the ISO Technical Committee TC68 Financial Services and evolved from the previous standard ISO 15022.

The new standard is a single approach in methodology, process and repository to be used in all financial messaging including trade, cards, payments, securities and foreign exchange. It applies to domestic, cross-border, automated clearing house, real-time and high-value payments.

ISO 20022 is essentially about ensuring everyone in the transaction chain is singing from the same hymn-sheet when it comes to managing payment data around the world. A common language and model means better communication, richer, more accurate data, lower risks and better traceability. Interoperability will improve as ISO 20022 supports non-Latin alphabets and follows XML-based approaches. XML, a type of markup language and file format, is ideal for dealing with such complex processes.

Banks and financial institutions are migrating their payment systems from SWIFT messages to the more structured ISO 20022 messaging standard so organizations and developers will use the same message framework, form and meaning.

From November 2022, anyone can expect to have to start processing ISO-compliant information. By 2025 all financial bodies will have to be able to process ISO-compliant payment transactions. It’s also worth noting that SWIFT was part of the working group that developed the ISO 20022 proposals.

ISO 20022 – Why it matters

International financial payments systems often suffer from inefficiencies, costly delays and vulnerabilities to fraud and cybercrime as well as compliance pitfalls. Unifying the way these bodies ‘talk’ to each other, interpret, present and unlock information, and process payments reduces the risks of misunderstanding or losing data, while offering cost and time efficiencies in the transaction process.

A common language also lays the foundations for more resilient infrastructure, greater compliance and improved customer service.

The benefits can be particularly impactful in cross-border payments where costs can rocket because of the number of intermediaries and regulations involved in transferring money from one country to another. Variations in legal compliance and multiple security checks can also slow the flow.

Positive impacts of ISO 20022 include:

  • Better structured, more granular data available for every link in the payments process chain
  • Efficiencies from having a single standard that covers end-to-end business processes and enhanced straight-through processing
  • Greater transparency offering more remittance information at your fingertips…
  • … and an audit trail to demonstrate you are on top of your transactions Overall, the enabling of improved analytics means less manual intervention, offering greater accuracy, system resilience and fraud prevention… all of which should mean more time and money for improving customer service.

Adopting ISO 20022 is also a pathway to a more data-driven business through:

  • Increased efficiency – richer data means better decision-making
  • Client process wins – more accurate payment information offers better data integration, unlocking automation opportunities
  • Structured data – including better sanctions screening and anti-money laundering monitoring
  • Reduced friction and delays – a harmonized data structure with payment tracking transparency means less hold-ups

The integration challenge

This is a big change for businesses. Planning for migration sooner rather than later is key – it’s not just a case of downloading a new ‘version’ of a simple application. Here are some typical pain points for businesses looking to start their ISO 20022 journey.

  • Multiple message systems and formats that hinder homogenization
  • Legacy systems unsuitable for the demands of the new standard
  • Data or system anomalies that require resolving before upgrading
  • Assigning extra time for a testing phase before full roll-out
  • Inadequate resources to support and manage migration, and resolve any internal and external anomalies

Meeting the challenge

A large number of financial institutions have already transformed their systems to better connect with each other to comply with ISO 20022. If processes lag behind, businesses risk costly inefficiencies, payment delays and, ultimately, unhappy customers. And remember, digital challengers will be ISO 20022-compliant from the get-go.

Adapting to the new messaging standard may mean your organizations has to overhaul its processes and technology. It is not enough to do the minimum; financial institutions can only fully reap the benefits if they fully transition end-to-end and have processes that can handle the richer data sets that come with the new standard.

Companies should consider the following questions when addressing the challenges of ISO 20022 migration:


Can existing systems support the framework and processing power required for ISO 2022? What needs to change or be upgraded to ensure a robust operation?


Institutions will need to maximize their security systems given the more granular customer and transaction data unlocked.


How up-to-date are corresponding institutions in the transaction chain? How can you check and what impact could this have on your efficiency and compliance?


Do you have the knowledge and expertise to manage transition to the new standard and ensure all the implementation boxes have been ticked? How efficient is it to do this internally?


What internal changes are needed to bring everyone up to speed with the new requirements? Taking advantage of the opportunities presented by the new standard means ensuring your team has a thorough understanding of how to implement, manage, monitor and maintain the new payments process.

How can we help?

ISO 20022 offers significant opportunities for business growth and efficiencies with a more harmonized approach to global payments processes and enhanced capabilities that can unlock richer data outcomes for better planning, decision-making and resolution, and transparency.

Aurum can help support your migration in two main ways: providing reconciliation technology that seamlessly integrates with the demands of the new standard, and automatic reconciliation of your transactions, which complements the benefits of the new, high-performing system.

Automatic reconciliation gives businesses better end-to-end control of their data, minimizing risk, errors and delays. Our leading-edge technology allows your business to better oversee and manage complex and extensive transaction data – critical with the richer data possible with ISO 20022.

Let us show you how our technology can help support you on your journey to ISO 20022 compliance. Book a demo with us now.

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