The Federal Reserve has announced it will not implement Phase 1 of the Fedwire Funds Services migration to ISO 20022 during 2020 or 2021. It confirms that it does not have any other message format changes planned through 2021.
In September 2019, the Federal Reserve (the Fed) announced its plans to delay and reassess a phased implementation strategy in favour of a single-day implementation - known as a ‘big-bang’ approach also being taken in Europe.
The Fed notes the discussions around this change “have considered cross-border interoperability issues that may occur if the Federal Reserve Banks and other high-value payment system operators have not implemented the ISO 20022 messaging standard by the time SWIFT enables its participants to start sending data-rich ISO-20022 messages over its global network.”
The Fed adds that discussions have also addressed the impact of SWIFT’s decision to delay its migration to the new messaging standard by 12 months to November 2022, with the ECB having to step in and enforce measures to mitigate the delay’s impact.
SWIFT’s delay has caused widespread unease across the European banking landscape, with multiple institutions and associations calling on the ECB to push back various projects and programmes (such as T2-T2S consolidation) due to the timeline and strategic disruptions caused by SWIFT’s decision.
The Federal Reserve says: “given the coronavirus (Covid-19), it is unlikely that we will announce a final decision on the ISO 20022 migration strategy before the end of this year.”
The Fed adds that it remains committed to supporting the ISO 20022 standard and anticipates providing an update regarding the overall migration plan for the Fedwire Funds Service later in 2020.