The global trend toward capitalizing on richer payments data and enabling for value-added overlay services on real-time rails aligns with another major global shift just around the corner: November 2021 will mark the beginning of the move to ISO 20022.
ISO 20022 messages add improvements through structured data that allows payment providers to exchange information seamlessly between systems—providing a consistent customer experience across markets.
The transition (from November 2021) will run until November 2025. There’s a lot to do between now and the deadline – and pressure will begin to mount this year. Participants need to procure and sign a contract with a Network Service Provider, finalize internal development plans, adapt their IT and internal processes, complete connectivity and user testing, finalize their configuration and then complete migration activities on production environments.
Planning for the migration should be on top of the agenda for financial institutions in Europe and beyond, but it is fair to say that many banks have underestimated the enormity of the task ahead. Migrating as soon as possible will deliver early benefits for payment providers and their customers, including end-to-end visibility on payment flows, easier reconciliation and transmission of more data to the final customer.
Additionally, universal confirmations will become mandatory for all financial institutions using SWIFT.
Since it was launched in 2016, SWIFT gpi has without doubt transformed the cross-border payments experience. Over 500 banks have joined the service and gpi customer payments are now being made in nearly 150 currencies, across more than 1,300 country corridors.
SWIFT gpi has quickly become the new norm for cross-border payments and enables financial institutions to provide fast, transparent, certain and trackable cross-border payments to their customers. By the end of 2020, SWIFT will extend the benefits of tracking and confirming payments to every financial institution. As part of this, every single payment (MT 103 on FIN) will require a confirmation that funds have been credited to the end beneficiary account within two business days.
Financial institutions on SWIFT that are not gpi-enabled will be able to confirm their incoming payments manually using a new Basic Tracker, as well as through a range of other automated solutions. SWIFT gpi member banks will continue to be able to access the full gpi Tracker to confirm payments, as well as benefit from the full search and tracking features of gpi, along with the suite of value-added services. Many customers are demanding the transparency that Universal Confirmations offer and are determined to take action as soon as possible. Additionally, SWIFT provides access to the testing robot for all its pilot members as a free resource – so it makes sense to take advantage of this.
