Based on a recent industry request to revisit the ISO 20022 migration strategy, the Federal Reserve Banks today announced a pause in their previously announced plans for a three-phased migration to the ISO 20022 messaging standard for the Fedwire Funds Service.
As a result, Phase 1 will not be implemented in November 2020. The Federal Reserve Banks will provide an update regarding their implementation plans once the assessment is complete.
The Federal Reserve Banks recently received a formal request from the Payments Market Practice Group (Off-site) to reconsider the phased ISO 20022 migration strategy in favor of a same-day implementation to fully enhanced ISO 20022 messages. After financial messaging network operator SWIFT announced late last year that it would enable its participants to start sending data-rich ISO 20022 messages over its global network starting in November 2021, global financial institutions indicated that a phased implementation approach increases the risk and duration of cross-border interoperability issues. If funds-transfer systems in local jurisdictions are not yet enabled for fully enhanced ISO 20022 messages by SWIFT’s target date, there is a risk they may have to truncate data in certain messages. Consequently, global financial institutions have asked the Federal Reserve Banks and other high-value payment system operators around the world to adopt a common approach to implementing fully enhanced ISO 20022 messages, including complementary target implementation dates.
The Federal Reserve Banks’ assessment will include discussions with Fedwire Funds Service participants and The Clearing House Payments Company L.L.C., operator of the CHIPS® funds-transfer system, to help ensure an appropriately harmonized implementation approach for U.S. high-value payments. Based on those discussions and other aspects of the assessment, the Federal Reserve Banks will announce revised implementation plans.