Biju Suresh Babu
MD – Banking & Financial Services
Reading Time: 2 minutes
This November, the Payments world starts moving to rich MX messages
Biju Suresh Babu
World-over, traditional MT / FIN messages will begin migrating over to their equivalent (rich and structured) MX counterparts in November 2022, with SWIFTs co-existence period for CBPR+ coming to an end in November 2025.
While there are tremendous benefits from ISO 20022, including global standardisation and harmonization, the data language is complex. Adoption impacts both front-office systems and channels, as well as back-office ones, more-so for organisations where MT / FIN processing is almost baked-in to their cores.
Before embarking on the ISO 20022 migration journey, Financial Institutions should consider the adoption approach, the inherent challenges they could face in these projects and understand cost, resource and risk implications. It is also important for FIs to evaluate each approach based on the current state of their technology infrastructure, availability of resources and relevant skills, their market environment as well as relevant local and global timelines.
There are typically three broad approaches that FIs can consider for ISO 20022 adoption:
While middleware has conventionally been seen as a short-term tactical fix, commercial pressures along with the Covid-19 pandemic have resulted in many transformation projects getting staggered. In such a situation, a smart ISO 20022-specific middleware based approach is now being considered a pragmatic one not just for the short-term, but for medium-long term ISO 20022 adoption as well.
Considering we are half-way through March 2022 and deadlines are fast approaching, the biggest challenge for many FIs will be scarcity of resources and time. It is important to get started quickly and that sufficient emphasis is placed on providing time for rigorous end-to-end testing.