Migration to ISO 20022 is a behemoth of a change program that will touch nearly all aspects of your business. It’s critical to have engagement across all different lines of businesses within your organization early on, and to allocate sufficient resources to the task, getting buy-in across all levels of your business. Significant investment spend will be needed in order to enhance and upgrade existing systems.

As we move to these new standards and new processing systems, it's also crucial to stay closely engaged with key stakeholders and providers of resources and information, such as SWIFT. Progress is being made quickly, and to stay in front of this, we’re advising clients to ensure they are consistently engaged in the dialogue, and to have a good understanding of what is required of them. There are SWIFT national groups, for example, which we encourage clients to actively participate in, so they understand what is needed.

This is a big, multi-year move to standardization, and right now, we’re in the awkward migration period: a three-year period to 2025 where both ISO 200022 ‘MX’ messaging and the existing ‘MT’ language can coexist.

By 2025, ISO 20022 will be the common standard used in end-to-end payment data flows. But we’re witnessing a real degree of divergence in planning, oversight and governance across different market infrastructures when it comes to adopting the new standard. Some countries and institutions are more advanced in their planning than others. Those that fail to catch up in time could find themselves facing delays, confusion and hiked costs. For instance, if your business is still operating on pre-ISO 20022 ‘MT’ messages and a new client has already upgraded to ‘MX’ ISO 20022 messages, if you're not ready for it, you can't support your clients.

Make sure your business has a structured ISO 20022 program, and don’t be afraid to reach out to your business partners for help. At J.P. Morgan, we’re already highly active in supporting and guiding our clients in their migration planning. 

The migration is possibly the largest change program the payments industry has ever undertaken. As with any major change, testing will be critical to helping banks gain the assurances they need ahead of the industry taking this major step forwards. Tools are emerging to achieve this: SWIFT has launched the ‘Test Sparring Partner,’ which allows you to participate in an ISO 20022-based transaction, with the Sparring Partner acting as the other bank. So, you can ask the program to play through various scenarios like a serial payment, you can send messages to it, it can send a message to you, and you can play through all the scenarios and start to exercise not just the content of ISO 20022-based messages, but also the flows as well. J.P. Morgan is also planning to provide ISO 20022 testing to our clients. We may also ask about your Testing Sparring Partner experience and scores to help plan our testing.

This is going to be one of the biggest changes that many people can remember in their career, and there is going to be a degree of difficulty as we work through this migration period. Another factor to note is the disparity in process and different requirements from each of the different market infrastructures. We’re witnessing a huge range of approaches from regular reporting and monitoring, to very prescriptive migration paths.

With all these variables transparency and partnership is key to success. Collaboration between clients, partners, and peer banks, for example in agreeing appropriate implementation guidelines, is really important in order for this to be successful during the migration period and until the industry has have fully implemented ISO 20022. From your sales to product teams, your service teams and operations staff, it’s vital to make it clear to your people how critical the migration to ISO 20022 is. It’s also a great time to ask questions of your business and how it stands to benefit from the migration to super-rich payments data. Rather than seeing it as an inconvenience, ISO 20022 can represent a huge growth opportunity for your business. What are the benefits of having enriched data, and how can this data be leveraged? How can it improve your clients' experience? How does it help make better informed business decisions?