15 Jul 2019

Meet The ISO 20022 Standard

Whether you’re involved in payments processing or not, you may have some questions about the change to the new ISO 20022 standard and how it might impact your organisation.  Here’s our high-level overview:

What is ISO 20022?

ISO 20022 in an international standard prepared by the International Standards Organization. It is a description of a common platform for the development of messages, but in common usage it refers to the new message formats that have been developed using the platform. Payment clearers and central banks are migrating payment messages to the new format on a phased basis over the next 3 years. When the phased migration is complete MT format messages will no longer be used for payment processing.

Where will ISO 20022 messages be used?

ISO 20022 messages are intended to be used in five business areas:

  • Payments
  • Securities
  • Trade Services
  • Cards
  • Foreign exchange

Dates to migrate payment processing to the new format have been communicated by country clearing organisations. However the other four business areas timelines have not been announced yet.

According to ISO20022.org, the first focus of ISO 20022 is on international (cross-border) financial communication between financial institutions, their clients and the domestic or international ‘market infrastructures ’.

What is ISO 20022 replacing?

ISO 20022 messages replace message types developed under an older standard, ISO 15022.  These older message types are used by the SWIFT electronic payments network. These have been ubiquitous for 40 years. The new ISO 20022 message types are known as SWIFT MX messages.

What Are the Advantages of ISO 20022?

The Bank of England cites the following advantages of ISO 20022 messages over the older ISO 15022 messages:

  • Flexibility – adapts to changes more easily
  • Harmonisation – over 70 countries have adopted
  • Compliance and regulation – richer data aids transparency of transactions
  • Resilience – interoperability allows rerouting
  • Enriched data – better and more complete reference information
  • Competition and innovation – fuelled by flexibility
  • Straight-through processing – better data leads to less intervention
  • Analytics – improved decision making based on better data

Who is affected?

The older ISO 15022 messages that are being replaced by ISO 20022 are used by SWIFT members including banks, money brokers and security broker dealers, clearing systems, corporates, non-bank financial institutions and others.

There are also service provider outside of SWIFT who have adopted MT-like messages for the services they provide.  They are likely to feel pressure to support ISO 20022 style messages, in which case their customers may also have to make the switch.

When is this happening?

The switch to ISO 20022 is already underway.  Some settlement systems and clearing houses in South American countries began supporting the new messages as early as 2007. Some of the most important financial services providers in Europe and the United States will make the change in 2021 and 2022.

How does this affect your organisation?

If you are sending or receiving SWIFT MT messages then you will have to adapt your workflows to the new style of messaging.  These changes are likely to impact not only the payments process, but in the future will also impact reconciliations, confirmations, cash management, liquidity management and other business functions.

What are your choices?

Because support for the older style of messages is likely to wane quickly, doing nothing is probably not a viable strategy.  You may be able to outsource transformations between the older messages and the new ISO 20022 messages, but this is likely to be acceptable only as an interim measure.  Most organisations will find that they need to adapt their systems to the new messaging standard.

The technical bit: What do you have to change?

The most obvious difference between the old messages and the new messages is their respective formats.   Both styles of message are text based, but the old messages use a notation that is peculiar to SWIFT while ISO 20022 uses the more popular XML notation.

Here is an example MT message fragment:

20 : Transaction Reference Number

IBFT (mandatory) + Bank’s Own Reference (i.e: UBPH01060001)

21 : Related Reference


32A : Value Date, Currency Code, Amt

Date : 06 January 2014


Amount : 100,000,000.00

58A : Beneficiary Institution – FI BIC




And here is an example MX (ISO 20022) message fragment:






<Nm>ABC Corporation</Nm>


<StrtNm>Times Square</StrtNm>


<PstCd>NY 10036</PstCd>

What needs to change?

ISO 20022 messages offer the opportunity to improve the information content of your messages in two ways.  First, they can hold more information. By exploiting this capability your organisation can provide greater transparency around the transactions to which it is a party, an improvement which will be beneficial to your compliance efforts.  Second, the information can be structured more predictably.  This will make automatic processing and straight-through processing more reliable.

How far should you go?

The systems changes you will want to make to be able to send and receive ISO 20022 messages depends on your payment systems strategy and your broader integration strategy.

  • If you are looking for a minimalist approach you may want to replace or supplement your MT message writers and readers with ISO 20022 equivalents without making any other changes.
  • On the other hand, if its time to update your payment systems strategy or to refresh your integration platform then you may want use the ISO 20022 changes as a catalyst for a broader change program.

The right answer for your firm may be either of these extremes or it may lie somewhere in between.

How can Integrella and PDB help?

By working together, Integrella and PDB Consulting are able to offer a full range of business and technology services to help you identify and execute an ISO 20022 strategy that meets the needs of your business.  Clients can look to us for any or all of:

  • Business impact assessment
  • Business change planning
  • Systems change planning
  • Systems change execution

If you need a hand or even if you just want to explore your options, please get in touch.