For quite a long time, cross-border payments and transactions followed multiple formats and standards. This fragmentation led to interoperability issues, resulting in delays and inefficiencies in digital payment processing. As a result, payment standardization became a global priority for global financial institutions. Taking this step forward, the financial industry has launched a common global standard for payment messaging known as the ISO 20022. Since March 2023, more than 11,000 global financial companies have adopted this standard. For banks, it has become mandatory to adopt this new standard, with its deadline set for November 2025.

ISO 20022: Key to Payment Modernization

According to SWIFT:

“ISO 20022 is an open global standard for financial information that provides consistent, rich and structured data to be used for every kind of financial business transaction.”  

By the end of November 2025, the existing SWIFT MT messages involved in payments will become a thing of the past. Country wise, China and India have already transitioned to ISO 2022. Meanwhile, countries such as the UK, US, and Canada will finish their ISO 20022 transition in the next 4 years.

Reasons Behind ISO 20022 Adoption:

Structured data, better data

Facilitates the exchange of more granular, holistic, and well-structured data during payment messages.

More scope of quality data

Enables a better banking experience through seamless customer services and transparency in remittance information.

Improved analytics

Enhances operational efficiency through advanced analytics, frictionless compliance processes, robust fraud prevention tools, and less reliance on manual dependencies.

End-to-end automation

By supporting different business domains and processes, ISO 20022 enhances straight-through processing and supports the creation of innovative financial services and products

Leveraging Modern Technologies

Leverages next-gen mainstream XML technologies to support seamless integrations.

SWIFT: Facilitator of ISO 20022 Adoption

SWIFT, one of the global payment messaging platforms, is playing an integral role in the migration and adoption of ISO 20022 for cross-border payments. For integrating ISO 20022, the industry has introduced two kinds of  implementation guidelines:    

  • The High Value Payments Plus (HVPS+) group offers a common approach for migration
  • The Cross-Border Payments and Reporting (CBPR+) group considers the needs and considerations for cross border payments.  

SWIFT extends its support to these communities through establishing the ISO 20022 program in cross-border payments and reporting.

Here are the steps that SWIFT is taking to enable faster and better migration.

Defining the Coexistence Period

The first step of the process is called the co-existence period that supports financial institutions to adopt the new standard in different financial markets.

During this process, the banks could leverage their existing SWIFT MT standards.

Implementing the Transaction Manager

Speeding up the migration journey of ISO 20022, transaction manager activates facilitates the exchange of quick friction-less cross-border payments. Banks still get the leeway to continue their payment transactions in their existing messaging formats (MT or ISO 20022), ensuring tremendous flexibility and control. Transaction manager also ensures end-to-end protection and compliance of business data with the latest financial laws and regulations.

Leveraging Rich Data

ISO 20022 encourages the use of structured data to improve automation and interoperability; enabling SWIFT to drive world-wide ISO 20022 adoption and help leading reserve currencies comply with the standard’s latest format for cross-border transactions.

What Does ISO 20022 Mean for the Banks

For global banks, adopting the ISO 20022 standard means  revamping their existing legacy systems that will help them leverage structured and enriched data to capture new opportunities and  customer insights. Their transition to this new standard can help them offer competitive and innovative financial services to their customers and meet the complex compliance requirements in the global markets.  

Mid-tier banks may not be directly impacted by the latest ISO standards. Though they must follow these international payment standards, they are likely to prioritize minimum compliance to keep their costs low. However, they would be more willing to partner with FinTech's and third-party service providers to bypass the costs that usually come with legacy system modernization and transformation.  

As local or regional banks are not directly involved in international payments, they may be marginally affected by the updated ISO standards. Their focus would be on managing short-term costs. However, they would adopt a wait-and-see approach on launching new services once they are fully convinced of the impact of the standard.

Considerations for Migration: What Should Banks Prepare for?

Choose an approach

There are two kinds of approaches organizations should consider while migrating to ISO 20022 mainly the big bang and the phased approach. The big bang approach refers to migrating systems and applications all at once. However, phased approach refers to assigning different go-live dates for different phases of the project. Compared to the big bang approach, the phased approach comes with less operational risks and help minimize issues related to straight-through processing. Depending on the size, scale, and level of complexity, businesses should select a suitable approach that fits their requirements.

Evaluate payments infrastructure

Migrating to ISO 20022 is an uphill task for major banks, given its impact on their core systems and downstream operations. As ISO 20022 supports enriched data sets, banks must deal with the implications of mapping complexities and large data volumes. They should develop a roadmap and a project management structure to assess potential stakeholders, third parties, and downstream workflows. While making this roadmap, consider the challenges associated with legacy payment standards, capabilities to manage large data sets, and interoperability with their infrastructure network.  

Alignment with internal applications

For integrating ISO 20022 payment systems with applications, banks should include other additional systems such as TMS and ERPs involved in the payment process. This can be achieved by partnering with third-party and system vendors, mapping legacy systems based on the new standard, enabling communication across workflows, and initiating iterative testing methods.

Implementing program governance and support

Given the expansive use of payment messaging and their varied implementation timelines across different markets, banks must initiate a comprehensive program governance from the beginning of the migration journey. Coordinators of this program need to host workshops with the designated teams to assess the application landscape and strategize requirement planning. They should evaluate their payment architecture to ensure that the program goes live on time and the changes are well-documented.

Improving Straight-through processing (STP)

At present, banks have to cater to multiple touchpoints when it comes to managing payments data. With the enriched data of ISO 20022, the banks can automate the processing of payment data by establishing a clearly defined messaging structure easily interpretable by other payment systems. To further enhance the straight-through processing, banks need to continuously test the performance of their payments technology and architecture.

Revamping Source Systems

Banks must ensure that their source systems adapt to ISO 20022. This includes channels such as mobile banking, net banking, payment initiation APIs, file-based initiation, and mobile wallets that need to be compliant with the new messaging standard.

Managing Data

While migrating to ISO 20022, banks need to also migrate their existing data models to this new standard, including shifting from the legacy format of payment messaging to ISO 20022’s brand new XML/MX format. This will help banks build new data analytics models to harness big data efficiently and develop highly personalized offers and services for their customers.

What Changes ISO 20022 Bring to the Banking Environment

Major global banking leaders and CFOs are sitting on the edge of their seats, awaiting the impact that ISO 20022 is about to bring to the banking landscape. Once implemented, here is how it can transform banking operations and processes:

  • Drives seamless integration of emerging technologies such as AI, ML, and cloud, in-compliant with the new data laws and cross-border payment regulations. To meet the rising demands of the new economy, ISO 20022 has the potential to create a thriving 100% STP ecosystem; minimizing costs, enhancing operational efficiency, and improving speed of transactions, especially in marketplaces and ecommerce domains.
  • Cross-border payments are heavily dependent on unstructured data. According to SWIFT, almost 10% of global FI payments rely on manual intervention for processing internal payments. This changes with ISO 20022 adoption as it supports quality structured and enriched data for faster automation, reconciliation, processing, and accurate risk assessment and reporting. Particularly, in areas of transaction screening and monitoring where unstructured data hinders efficiency, ISO 20022 can support integration of new security means, minimizing the delays in payment executions.
  • Global corporate sectors usually function on POBO, COBO, and ‘on-behalf-of' payment structures. Automating reconciliation can offer complete visibility into cash flows, improve exceptional handling, and streamline business flows like POBO, ROBO; ensuring that corporates can enable effective “just in time” payment processes and real-time treasury management.  
  • Implementation of Regtech can provide advanced payment intelligence, enhancing least cost routing, agent monitoring, and fraudulent activity monitoring. This will help organizations detect loopholes in the AML process and false positives.  

Challenges that can Serve as Roadblocks in ISO 20022 Adoption

Budgetary constraints, availability of multiple formats, presence of local PMI ISO migration policies, and delayed implementation timelines- these are some key issues that have thrown major banks into a quagmire. Maintaining an on-prem system and implementing new services requires revamping of the existing systems and operations to process ISO compatible data. Costing the business leaders an arm and a leg, these financial constraints get further exacerbated when banks address different payment specifications of multiple markets during the co-existence phase. Since these specifications also require different interpretations for different markets, banks face issues of reduced interoperability and inefficiencies. Transitioning to the new standard also opens the door to the complexities in data management, processing, analytics, reporting, and storage.

Finastra Global Payplus: A Blueprint for Payment System Transformation

To maximize the full potential of ISO 20022, organizations need a forward-looking, strategic approach to adopt this new standard and offer cutting-edge banking experiences. Finastra Global PAYplus – An ISO 20022 native global payments hub, has been designed to enable financial institutions to transform their end-to-end payment systems while ensuring compliance with ISO 20022 regulations.  

With the support of modern APIs and a microservice-enabled ISO 20022 data model, the solution uses both structured as well non-structured data to assess customer behavior and capture unique insights, improve customer experiences, cross-selling and upselling opportunities.

Compatible both on-prem or cloud, its modular architecture design and configurations enable automated upgrades and extension of payment workflows, resulting in rapid time to market and clearing scheme changes- imperatives needed for quicker implementation of ISO 20022.  

Summing Up Features of Finastra Global PAY plus

A unified solution 

Consolidates payment operations into a single, modular, cloud-native, intelligent payment hub.

Actionable insights 

Intuitive dashboards and reporting features for capturing insights and assessing service performance.

Designed for agility 

Low/No-code, configurable rules help adding new functionalities and changing workflows based on industry and customer requirements.

Liquity and Risk Management Module 

Offers tools to address new intraday liquidity monitoring and measurements standards to meet regulatory changes.

Supports All Payments 

Automates processing of RTGS, SWIFT and immediate payments with 100% STP. Compatible with any channel for payment processing and management.


Compliance as a Service helps banks to comply with varied instant payment infrastructures like FedNow service in the US and TIPS in Europe.


The Cloud Impact: Where Does Cloud4C Weigh in ISO 20022 Migration

Deploying Finastra Global PAYplus on cloud can offer organizations access to a host of fintech solutions starting from AML, fraud management to compliance scanning, payment initiation, to ERP integration, and alternate cross-border payment methods like Visa Direct. Quite recently, Cloud4C, one of the leading cloud managed services providers in collaboration with Finastra, spearheaded the payments executive roundtable 𝐈𝐒𝐎 20022 𝐑𝐞𝐚𝐝𝐢𝐧𝐞𝐬𝐬: 𝐀 𝐒𝐭𝐞𝐩𝐩𝐢𝐧𝐠 𝐒𝐭𝐨𝐧𝐞 𝐅𝐨𝐫 𝐏𝐚𝐲𝐦𝐞𝐧𝐭 𝐌𝐨𝐝𝐞𝐫𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧.” 

Industry leaders from SWIFT, Finastra, and Cloud4C discussed the role that ISO20022 plays in modernizing financial processes and services. From talking about the latest ISO 20022 adoption trends to enhancing compliance and operational efficiency; we also focused on cloud’s role in maximizing growth opportunities and driving data-driven decisions in payments.  

As an application-focused managed cloud services provider, we have served more than 100 banks including 5 of Global Top 20 Banks. Managing their digital transformation journey end-to-end, we have empowered BFSI firms reimagine their core business operations to leverage new-age tech and deliver seamless digital banking experiences. Our three core banking transformation solutions: Bank-in-a-box, Insurance-in-a-box, and Finacle on Hybrid Cloud have helped banks successfully host their payment infra on a fully compliant highly available cloud with DR-backed security frameworks and end-to-end cloud managed services.  

If you want to know more about how we can help you in the implementation of Finastra Global PAYplus or make your organizations ISO20022 ready, get in touch with us and we will show you the path.

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Team Cloud4C
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Team Cloud4C

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