For decades, the formats supporting high-value and cross-border payments have been fractured. Lack of interoperability due to different standards and formats have resulted in significant delays and inefficiencies in processing payments.
Now, the world is moving towards one common global standard for financial messaging, called ISO 20022. Global adoption of this standard is accelerating with a number of high-value payment market infrastructures already live on ISO 20022 and more planned to go live by 2023.
For banks, the implementation of the new standard represents a global mandate with near-term deadlines. In Asia, mainland China and India are already live with ISO 20022, with Hong Kong SAR on track to transition soon. Major central clearing houses and SWIFT are planning to switch starting in 2022 with the US, Canada, UK, and eurozone moving ahead with plans to transition to ISO 20022 over the next four years, comprising over 87% of global high-value clearings. By November 2025, the current SWIFT MT messages used in cross-border payments and reporting will be decommissioned.
ISO 20022 is not simply a format switch, it encompasses organization wide impacts, and not all banks and financial institutions are the same, however, with different organizations requiring different approaches based on their internal environments and strategic priorities. Our view of the competitive marketplace suggests that all banks should be using the shift to ISO 20022 to rethink the way payments are integrated into the wider business, infrastructure and growth strategy. Download our full report to understand what benefits and challenges ISO 20022 brings about and where KPMG can help you plan your transformation journey.