The Bank for International Settlements (BIS) has opened a public consultation on proposals to harmonise the use of ISO 20022 messages in cross-border payments, which are presented in the consultative report.
ISO 20022 harmonisation requirements for enhancing cross-border payments
ISO 20022 is a global and open standard for exchanging financial information. It provides a common language that can be used in every kind of financial transaction, including cross-border payments. Moreover, ISO 20022 allows for richer formatting options and the ability to capture structured and unstructured data to be seamlessly shared via standardised messages.
At present, the fragmentation and mixed use of payment messaging standards and formats creates significant delays and inefficiencies in processing payments. To tackle interoperability issues, the world is moving towards one common global and open standard for payments messaging - ISO 20022.
The ISO 20022 migration is expected to play an important role in the interlinking of payment systems and, more generally, addressing data quality and quantity restrictions in cross-border payments.
CPMI’s proposed requirements for harmonised use of ISO 20022
A joint task force (JTF), comprising technical experts from the Bank for International Settlements' Committee on Payments and Market Infrastructures (CPMI) and the Payments Market Practice Group (PMPG), has developed a set of recommendations for a harmonised adoption and use of ISO 20022 with regard to cross border payments.
Because many jurisdictions are currently in the midst of implementing ISO 20022, the proposal have focused on the upcoming state after the end of the coexistence period between the Swift MT and the ISO 20022 messaging standards in 2025. The proposed introduction date of the requirements would align with SWIFT's decision to remove the ability to send cross-border MT payment messages over its network.
The CPMI is inviting comments on the consultative report by 10 May, 2023.
As the next steps, this report will be revised in response to the consultation and the final report will be delivered to the Indian G20 Presidency by end-2023.
Last year, the European Central Bank decided to postpone the ISO 20022 go-live by four months, from the 21st of November 2022 to the 20th of March 2023, to allow users more time to complete their testing in a stable environment. For sure, approaching deadlines and coexistence periods require banks to take a strategic approach in their migration strongly focusing on interoperability, data quality and integration of new technologies.
Read more at the latest BIS’s publication: https://www.bis.org/cpmi/publ/d215.htm
HOW WE CAN HELP
Whether you have already made a move or just getting ready for the ISO 20022 transition, our experts know how to make your ‘journey’ smooth and carefully planned.
We bring together a group of experts to help authorities develop their thorough roadmaps and key steps in implementing and modernizing national and cross-border financial data exchange systems in the context of the global shift towards ISO20022 for payments, securities and other business domains.
BR-AG team has developed a broad service portfolio, consisting of advisory services and workshops tailored to your specific needs, to comply with and unlock the promised beneficial opportunities under the new ISO 20022 standard.
Contact our team of experts to learn more about our professional services for ISO 20022: