FAQ Swift ISO 20022

General questions about MT to MX Migration

What is ISO 20022 migration?

ISO 20022 migration refers to the process of transitioning financial institutions and payment systems to adopt the ISO 20022 messaging standard. ISO 20022 serves as a universal language for payment data, facilitating faster transaction processing and improved reconciliation. This standard has been widely used, particularly in SEPA transactions, and has gained further prominence with SWIFT's introduction of ISO 20022 for cross-border payments and reporting (SWIFT CBPR+).

The migration to ISO 20022 is a global initiative aimed at standardizing the exchange of high-value and cross-border payment messages across financial institutions. Major market infrastructures, such as Target in Europe, have already migrated to ISO 20022 or are in the process of doing so. The goal of ISO 20022 migration is to achieve harmonized standards and enhance interoperability in the global payments ecosystem.

What is the purpose of ISO 20022?

ISO 20022 serves as a standardized messaging format, acting as a common language for global payment data exchange. It enables instant payments and enhances the payment modernization processes by providing structured, data-rich messages that are easily exchanged between corporates and banking systems.

Why SWIFT is migration to ISO 20022?

SWIFT is migrating to ISO 20022 to modernize and standardize its messaging format for cross-border payments and reporting. This migration aims to enhance interoperability, improve data richness, and support real-time payment processing, aligning SWIFT's services with global industry standards and evolving customer needs.

Who will be impacted by this change?

This change will affect several groups. Firstly, it will directly impact all Financial Institutions (FIs) that currently use SWIFT MT messages for sending or receiving payments. Additionally, regulatory requirements imposed on FIs during this migration will ensure that the transition follows specific rules and standards, impacting how financial institutions operate and manage their messaging protocols. 

What is the difference between SWIFT and ISO 20022?

SWIFT and ISO 20022 serve distinct but interconnected roles within the financial industry. SWIFT, short for the Society for Worldwide Interbank Financial Telecommunication, operates as a messaging network and cooperative that enables banks and financial institutions worldwide to securely exchange a wide range of financial messages, including payment instructions, trade confirmations, and securities information. Its primary function is to provide a standardized platform and protocols for transmitting these messages, ensuring security, reliability, and authentication of financial transactions across borders.

On the other hand, ISO 20022 is a messaging standard that defines the structure, format, and content of financial messages exchanged between financial institutions and systems. Unlike SWIFT, which focuses on providing the network infrastructure for message transmission, ISO 20022 concentrates on standardizing the data elements, message types, and syntax of these messages. This standardization facilitates interoperability between different financial systems, enhances data richness within messages, and supports modern payment processes such as real-time payments and advanced data analytics.

Why move to ISO 20022?

Moving to ISO 20022 offers several advantages for banks and financial institutions. One key benefit is the reduction of false positives in risk checks, which translates to cost savings and more efficient resource allocation. 

What SWIFT MT messages are in scope for the ISO 20022 migration

	head.001.001.02	Business Application Header
MT102/103	pacs.008.001.08	FI To FI Customer Credit Transfer
MT200/201/202/203/205	pacs.009.001.08	Financial Institution Credit Transfer
MT204	pacs.010.001.03	Interbank Direct Debit
MT103/202 ret	pacs.004.001.09	Payment Return
	pacs.002.001.10	FI To FI Payment Status Report
MT941/942	camt.052.001.08	Bank To Customer Account Report
MT940/950	camt.053.001.08	Bank To Customer Statement
MT900/910	camt.054.001.08	Bank To Customer Debit Credit Notification
MT210	camt.057.001.06	Notification To Receive
MT920	camt.060.001.05	Account Reporting Request
MT192	camt.056.001.08	FI To FI Payment Cancellation Request
MT196	camt.029.001.09	Resolution Of Investigation
MT101 relay	pain.001.001.09	Interbank Payment Instruction

 

What is the difference between MX and MT format?

MT messages use a specific format (ISO 15022) and a special way of sending them called the FIN protocol. They have a code with three numbers that shows their type. In contrast, MX messages follow a different format (ISO 20022) and use the XML protocol, which is more flexible and can handle various types of data.

What should you keep in mind when translating MX-MT messages?

When translating MX-MT messages, it's important to remember a few key things. First, make sure the translation keeps the right structure for both MX (ISO 20022) and MT (ISO 15022) formats. This means keeping all the important parts of the message intact, like the type of message and its data.

Second, pay attention to how the messages are sent. MX messages use XML, while MT messages use a different method called FIN. So, when translating, you need to convert the data to match the right method for each message type.

Third, check that the translated messages keep all the data correct and complete. Mistakes or missing information can cause problems, so it's crucial to maintain the accuracy of the data.

Lastly, follow any rules or guidelines set by regulators or industry standards for MX and MT messages. This ensures that the translated messages meet all the necessary requirements for use in different systems and across different platforms.

What is CBPR+?

CBPR+ is SWIFT's program designed for adopting ISO 20022 standards specifically for cross-border payment and reporting messages within the correspondent banking sector. This initiative aims to transition from using the traditional MT messages to the more advanced ISO 20022 messages for cross-border payments. The implementation of ISO 20022 messages for SWIFT cross-border payments is scheduled to commence in March 2023, marking the beginning of a coexistence phase that will last until November 2025. During this coexistence phase, the older MT messages for cross-border payments and cash reporting will gradually be replaced by ISO 20022 messages, aligning the correspondent banking space with modern messaging standards and enhancing interoperability and efficiency in cross-border transactions.

What is the difference between CBPR+ and MX?

CBPR+ is SWIFT's program for adopting ISO 20022 standards in cross-border payments and reporting messages in correspondent banking. It focuses on transitioning from traditional MT messages to ISO 20022 messages. MX, on the other hand, refers to the actual ISO 20022 message format using XML, providing a modern and flexible structure for financial messaging.

How does TechZert help financial institutions and banks migrate to ISO 20022?

TechZert assists FIs and banks in migrating to ISO 20022 by providing consultation services, analyzing their payments infrastructure, enhancing processing capabilities, and ensuring a smooth transition with minimal disruptions.

What are the key elements of TechZert's ISO 20022 migration approach?

TechZert's approach includes assessing legacy infrastructure, setting clear migration timelines, addressing data-handling challenges, managing co-existence phases of multiple messaging standards, and ensuring compatibility during the transition.

How does TechZert ensure a successful ISO 20022 adoption for its clients?

TechZert validates and transforms legacy messaging into ISO 20022 format, upgrades messaging services without interrupting daily operations, and ensures on-time completion under SWIFT timelines, setting clients live with ISO 20022 standards.

What benefits do financial institutions and banks gain from TechZert's ISO 20022 migration services?

FIs and banks benefit from improved data handling, enhanced processing capabilities, reduced friction in payments, compliance with new market infrastructure requirements, and a streamlined migration process facilitated by TechZert's expertise.