Accenture report that the global adoption of ISO 20022 is the most far-reaching and widely underestimated development in payments today.
It’s not shocking that the transition hasn’t attracted the attention it merits. ISO 20022 is complicated and can seem downright mysterious even to payments specialists. The new standard has also been a long time coming. Some financial institutions began their migrations over a decade ago.
But the impact of ISO 20022 is rapidly approaching a tipping point. SWIFT has announced a global phased migration to ISO 20022 over the next three years. At the same time, key high-value payments system operators have announced their migration plans. Combined, these developments mean that for every financial institution, an ISO 20022 migration is now a question of “when” rather than “if.”
By 2025 it will be the de facto standard for high-value payments systems of all reserve currencies, and will support 80 percent of transaction volumes and 87 percent of transaction value worldwide. In Europe, SWIFT and the European Central Bank have both announced go-live dates of late 2021 for the standard.
This means that, according to Accenture, banks are now facing firm compliance deadlines for ISO 20022. Any migration plan must balance meeting these deadlines with building towards a future-proof state. The complexity of ISO 20022 and the interdependencies of adopting a new industry standard make this easier said than done.
More: Accenture’s report on the six key challenges that must be overcome.