ECB takes action in Swift's ISO 20022 migration delay

Line drawing of the skyline of the city of Frankfurt against a blue background

Swift's decision to delay migration to  ISO 20022 keeps on stirring emotions. Based on today's  Finextra article: "ECB steps in over Swift’s ISO 20022 migration delay", Paul van der Valk wrote below summary:

In March 2020 SWIFT decided to postpone the ISO 20022 migration date for cross-border payments from November 2021 to end 2022. The ECB made ISO 20022 adoption mandatory and the adoption is linked to the new consolidated T2/T2S service and the related Eurosystem Single Market Infrastructure Gateway (ESMIG) which are due to go live in November 2021. So the delay of ISO 20022 migration leads to misalignment.  

This may impact European banks negatively as they have worked under the assumption that their capability to send existing MT messaging could be decommissioned after November 2021, however, as this assumption is now void European banks will have to review their plans on short notice.

The ECB suggests  that the following mitigating actions -among others-  should be undertaken and that SWIFT: 

  • is accountable for the creation of an updated market practice and message usage guidelines for ISO 20022 cross-border payments together with the European banking community by end June 2020;
  • offers free validation software for cross border payments traveling via European payments market infrastructures;
  • offers free translation software for cross border payments which have to be mapped from ISO 20022 to MT;
  • is accountable for the creation of an opt-in solution for ISO 20022 cross border payments, i.e. a dedicated Closed User Group (CUG) to exchange ISO 20022 messages for correspondent banking use cases
  • publish a blueprint no later than early May 2020

As the community testing phase for the T2-T2S Consolidation project is set to commence in March 2021, the ECB recognises that this looming deadline means it is “critical” that these measures are “communicated without delay to the community of TARGET2 users.”

Source

Finextra: https://www.finextra.com/newsarticle/35764/ecb-steps-in-over-swifts-iso-20022-migration-delay

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