Impact: MT replaced with like-for-like MX

In most cases the first impact will be on a financial institutions ability to receive incoming ISO 20022 / MX messages and process them, without causing disruption. While like-for-like MX messages have been on the CBPR+ network since March 20th 2023, an increasing number of Market Infrastructures are also adopting their own version of ISO 20022 as part of harmonization efforts.

However at the moment, the majority of incoming MX messages on the network, though structured are not full or rich. In many cases the fields in incoming MX messages still correspond to fields in MT systems and hence there is zero / minimal data loss on account of truncation. This will change as we get closer to November 2025, and an increasing number of banks start receiving full-format, rich ISO 20022 messages, causing truncation. This includes Financial Institutions using gateway level / embedded translation tools which do not support complex use-cases such as glue-back and MT 199 based automation the way FIA does.

Impact: Structured MX data

Though the outgoing MX deadline is November 2025, this stage is much more complex than March 2023 was. Approaches followed for both CBPR+ cross border and domestic Market Infrastructure networks will not work in the majority of cases as requirements are more around structured data. The majority of banks and FIs are under the impression that the only option available to them, to meet structured data requirements are through disruptive, time consuming, risky and expensive core system upgrades, or moving payment processing lock-stock and barrel to cloud based hubs. This is not the case, and FIA is able to offer a more elegant, non-disruptive approach, using ISO 20022 native data fabric.

Impact: Monetization

Beyond immediate priorities to meet incoming and outgoing MX requirements, it is important to take a step-back and look at the real value ISO 20022 will deliver to the industry through enhanced data / payments big data, which aside to harmonization, should be high on the priority list of bank innovation and customer retention departments. ISO 20022 data has the power to improve internal processes, smoothen inter-bank payments harmonization, and power better end customer propositions – in both the retail and corporate spaces. With the banking and payments world moving to APIs and ‘instant’, data-enriched payments will enable banks to innovate based on ISO 20022 data and position themselves considerably better than their peers. For this to work however the right modernisation architecture needs to be in place. Contact us to know more about how Fiorano can help.