How to meet the ISO 20022 deadline: A five-step strategy

To meet the November 2025 ISO 20022 deadline for cross-border payments and reporting (CBPR+), financial institutions should:

1. Conduct an impact assessment;
2. Develop a migration plan;
3. Leverage rich data elements;
4. Conduct industry testing; and
5. Adopt official definitions and prioritise readiness.

This article provides a breakdown of each step financial institutions (FIs) can take to comply with ISO 20022.

The impacts of ISO 20022

First, FIs must understand the context and the deadlines.

Until now, the deadline for ISO 20022 – a new standard for electronic data interchange between financial institutions – has been notoriously changeable. In March 2020, Swift delayed the original migration date for cross-border payments by 12 months (from November 2021 to the end of 2022), as banks struggled with decommissioning and preparing their existing infrastructure for the transition. A string of subsequent delays and postponements ensued.

Swift has asserted that the latest deadline for ISO 20022 CBPR+, however, will not be deferred. Institutions which do not migrate by November 2025 risk facing severe payment disruptions. Indeed, ISO 20022 will not be made backward compatible with MT – meaning untranslatable MT messages will be marked as NAK’ed (non-acknowledged).

For FIs, the impacts of this new messaging standard will vary. It is incumbent on business leaders to analyse the impacts; identify ways in which to respond efficiently; and consider where opportunities for growth and development can be seized.

The migration plan

While some FIs are well on their way to complying, many still have their work cut out. Swift’s December 2024 review revealed that only 32.9% of organisations had adopted the new messaging standard, despite a 6% increase in adoption that quarter.

When it comes to effecting migration, there are soft tasks – such as aligning teams and ensuring clear timelines, responsibilities, and milestones are agreed upon – as well as hard tasks, like upgrading legacy payment systems.

Whatever the strategy, six key steps must be taken:

1. Adopt official definitions;
2. Employ valid message instances;
3. Follow all structural constraints outlined in the rules and guidelines section of the Message Definition Report (MDR);
4. Use registered code values;
5. Source rich data elements; and
6. Be aware of the supplementary data field, which enables users to include information that is not encapsulated by other components, but is subject to strict rules.

For more detail on the technicalities, read Finextra’s article on how to comply with ISO 20022.

Leveraging rich data

Rich and structured data under ISO 20022 is crucial for facilitating instant, frictionless cross-border transactions – as well as improved reconciliation and automation. When receiving a message, banks must be able to ascertain: the identity of the sender and receiver, transaction purpose, creation date, priority level, as well as a reference.

To expedite the information-gathering process, ISO’s technical support group (TSG) created the Business Application Header (BAH), which forms part of the ISO 20022 message. The BAH precedes the main ISO 20022 message body – also known as the message payload – and is a mandatory element in CBPR+.

Industry testing

Swift’s end-of-year review showed that while many FIs around the world are already fully compliant with ISO 20022, the majority are not. Fortunately, institutions can learn from early adopters and proof-of-concept (POC) implementations that are emerging from ISO-ready market infrastructures and glean the ‘dos and don’ts’ for their own journeys.

As is the case with any technological migration, FIs should start with a testing period. Not only will this ensure the formatting information, data, and other related clearing systems are in order, it will provide the time needed to show clients how the changes may impact them.

To support the testing period, FIs have Swift’s MyStandards platform at their disposal – an online tool to validate message compliance using User Detailed Functional Specifications (UDFS).

Adopting official definitions

Swift recommends banks implement the official ISO 20022 message definitions found in the Catalogue of Messages. Since these definitions allow for a range of implementations, users are encouraged to consider their own unique needs.

Indeed, implementers are “welcome to participate in the relevant ISO 20022 Standards Evaluation Groups (SEG), which are in charge of evaluating and approving changes requested to existing message definitions and new versions,” says Swift. Such groups enable banks to ensure the requested changes are “justified and are worth the required implementation effort.”

Until the November 2025 deadline, FIs can maximise preparedness by participating in industry testing; ensuring processes and systems are primed to fulfil sanctions and anti-money laundering (AML) controls; designing solutions to make enriched data available for customers; and training staff in the new language.

Integrating ISO 20022

Taking action today via these five simple steps will ensure greater industry-wide ISO 20022 compliance ahead of the November 2025 deadline.

Highly standardised financial messaging is beneficial to the entire ecosystem – promising global interoperability and harmonisation; richer, more structured data; reduced manual interference with Straight-Through Processing (STP); improved fraud prevention; and even enhanced customer experiences, powered by deep analytics.