From Legacy to Leading Edge: Banks Struggle with ISO 20022 Transition

The benefits of standardized data formats and exchanges in financial services are myriad.

Banks are moving toward the ISO 20022 financial messaging standard, tied to Swift, which noted that the open standard can be used for all types of financial transactions, including cross-border fund flows.

The messaging formats support the inexorable global movement toward real-time payment, with 68% of businesses telling PYMNTS that they plan to adopt instant payments in the next two years via the RTP® Network or FedNow® Service. Certain verticals are outpacing that overall percentage in terms of intent: 81% of companies in consumer and retails plan to harness instant payments, followed by 75% in hospitality and leisure, and 70% in healthcare.

But the banks’ shift has some challenges in place, as legacy messaging formats still must be transitioned and translated into ISO 20022, and batch processes that have been around for decades must be moved to real-time status.

A few deadlines are nearing in the upcoming year: In March, Federal Reserve banks in the United States will have to implement the standard for the Fedwire Funds Service. By November, financial institutions (FIs) will have to be ISO 20022-compliant as they look to send and receive payments internationally. But recent stats by Deutsche Bank state that only about 27% of banks are fully compliant with, and have adopted, the standard.

End of the Coexistence

As PYMNTS reported last week, more than 1 million ISO 20022-formatted messages are already being sent over the Swift network every day. These messages are being sent to 220 countries and territories around the world, Swift said in a Wednesday (Dec. 11) news release.

November 2025 will mark the end of what’s known as the “coexistence” period between MT messaging, which can be termed legacy messaging, and ISO 20022. In documentation available on sites such as the Faster Payments Council, the newer messaging formats are noted to have unique data fields, as well as a growing number of data points that can be transmitted between FIs.

PYMNTS has noted in past coverage that the implementation deadlines had been delayed. But for the banks that are eyeing the span of about 11 months to get ready for the end of the aforementioned co-existence, enlisting the aid of outside providers to ensure compliance is part of a forward-thinking strategy.

In one example, Finastra said in May that it completed testing and certification through the Federal Reserve for ISO 20022, becoming one of the first vendors in the industry to complete the process for multiple solutions. It had certified Payments To Go, Global PAYplus, PAYplus USA and PAYplus Connect, offering multiple solutions for FIs to meet the standards for FedWire.

As PYMNTS reported last month, Volante Technologies has expanded the capabilities of its Volante Payments Platform by adding Volante Intelligence, which enables FIs to address the challenges posed ISO 20022. The company said in May that it achieved Fedwire Funds Service certification for the ISO 20022 messaging capabilities of its wire payment processing solutions. Meanwhile, payment solutions firm Finzly said in October that its platform enables FIs’ ISO 20022 readiness for Swift and Fedwire, with the option to send messages in custom formats or ISO 20022, along with operational readiness testing.

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