The SWIFT ISO migration’s initial deadline has been delayed by 12 months to November 2022. Why? Well, probably because the reality of the changes required has started to hit home. It’s a far cry from being a simple, somewhat superficial update. It is not like the usual annual standards update. It’s much more far-reaching.
It affects many areas of processing within the bank.
Consequently, banks are starting to recognize the enormity of the changes required and the implications for effort, timelines, and costs. Banks will need to update many different functions and processes within their current environments. This will require a significant investment in their existing systems, systems that may not be fit-for-purpose for the coming decade.
How digitally competent are these existing systems? Are they ready to underpin the agile, real-time, data-rich payments market of the 2020s? The key question that comes to mind – Is the SWIFT ISO migration forcing you to throw good money after bad?
Do you have to make significant changes to your existing, ageing, less than optimized legacy systems to enable support for the new SWIFT ISO data elements, the new processing rules, the new validations, enrichments, and reporting?
This migration affects more than just the core cross-border payments flow. It affects lots of different processing components within the bank, including:
- Transaction capture
- Payment generation
- Payment validations
- Payment enrichments
- Exception management
- Customer advices
- Customer statements
- Account postings
- Account management
- Sanctions and AML monitoring
- Account reconciliation
- API structures and processing
It is similar to the impact of the Year 2000 program (Y2K). However, unlike Y2K, which was immovable, the deadline has been delayed by one year from November 2021 to 2022.
This is good news for everyone as it gives us all more time to make the necessary system changes that will create the foundation for your digital payments future. This is because the SWIFT ISO change is just one of many payment services and infrastructures that are migrating to ISO 20022 standards to harmonize the cross border and domestic payments markets across the world.
Add the emergence of instant payment schemes, Open banking, SWIFT GPI, increased volumes and instrument complexity, and the necessity of changing a bank’s entire ecosystem is almost compulsory.
Will your current systems be able to handle the change effectively? Will they leave you with an agile, scalable, open platform that is capable of enabling your business to compete in the 2020s?
It’s not just core payments processes that are affected; it is also core banking and cash management processes.
Is it time for an even more radical change?
At Temenos, we have invested in options. Options which enable any bank to address both their payments and core banking challenges created by the SWIFT ISO revolution. Unlike the dedicated payment system vendors, we can solve the limitations in your core systems as well as your payments processes. This holistic approach leverages the same technology platform, providing an open, agile, digital payments and core alternative to address your needs.
The good news is that due to the delay of the SWIFT ISO deadline, there is now time to get away from the cul-de-sac of limited, legacy platforms. But the time window for change is not going to last, so reach out soon to see how we can help and get your entire organization ready for 20022 in 2022.