ISO® 20022 FAQs

ISO 20022 is an international standard for electronic data interchange between financial institutions. It provides a common platform for the development of messages using XML syntax, facilitating efficient and accurate communication in financial services.

ISO 20022 standardizes financial messaging, leading to better interoperability, efficiency, and data quality. This helps reduce errors, lower costs, and enhance the overall speed of transactions.

• Richer Data: The ISO 20022 format contains structured fields for longer names and specific address components, reducing data loss risk and enhancing regulatory screening.
• Domestic and Cross-Border Interoperability: A common format for domestic and global transactions using a single standard reduces costs and improves accuracy and straight-through processing.
• Improved Processes and New Services: Moving to a global format can reduce market practice inconsistencies, advance remittance information capabilities, and support value-added services like payment tracking.
• Maintaining Competitiveness: Lack of ISO 20022 adoption could degrade the US dollar’s global leadership, encouraging migration of US dollar clearing offshore.

ISO 20022 is used by a wide range of financial institutions including banks, payment service providers, securities firms, and market infrastructures. It is being adopted worldwide for various types of financial transactions.

The timeline for implementing ISO 20022 varies depending on the region and payment system. Many major payment systems have already begun the transition, with global deadlines generally falling between 2022 and 2025. The deadline for banks to migrate in the US, EU, and UK is November 2025.

• Notable U.S. milestones include:
• CHIPS, the clearing and settlement system from the Clearing House, migrated to ISO 20022 in April 2024.
• Fedwire, from the Federal Reserve Bank, will migrate to ISO 20022 on March 10, 2025.
• International adoption is also underway with the following countries and payments systems:
• Swift, owned by G10 central banks, ECB and the National Bank of Belgium, began migrating customer and interbank payments to ISO 20022 in 2023; currently, Swift is running both MT and ISO 20022 messaging formats and plans to end this coexistence period in November 2025.
• The UK’s CHAPS system migrated in June 2023.
• PMIs including EURO1 and T2 in Europe, South Africa’s SAMOS system, and MEPS+ in Singapore, have already completed their migration.
• Australia (RITS), Canada (Lynx), and New Zealand (ESAS) all began their migration in March 2023.
• Hong Kong’s CHATS system migrated in April 2024.
• Singapore’s SCRIPS system is expected to be complete in Q2 2024.

ISO 20022 enables richer, more structured data in payment messages, improving the accuracy and efficiency of payment processing. This leads to faster settlement times, better reconciliation, and enhanced fraud detection and prevention.

The benefits your institution will notice include improved data richness, enhanced compliance with regulatory requirements, greater interoperability across global markets, reduced operational risk, and the ability to support new business opportunities through innovative payment products and services.

• To comply with ISO 20022, your institution will need to update or replace legacy systems to support the new messaging format, train staff on the new standards, and coordinate with other financial institutions and service providers. This includes modifying existing processes to accommodate the richer data fields and structured formats of ISO 20022 messages.
• Some steps you can take to ease the transition are conducting a thorough assessment of current systems and processes, investing in the necessary technology upgrades, providing comprehensive training for staff, and establishing a project management team to oversee the transition. Collaboration with other financial institutions and service providers is also essential to ensure seamless integration.

More information and technical details can be found on the ISO 20022 website and on the Federal Reserve’s Fedwire® Funds Service ISO® 20022 Implementation Center.

Modernizing the Fedwire Funds Service’s message format through the adoption of ISO 20022 is a sound investment in the future, meeting increasing customer demands for richer data, facilitating compliance with evolving regulatory requirements, improving interoperability with other payment systems globally, and enhancing customer services.

The Federal Reserve Banks will implement ISO 20022 messages for all domestic and cross-border funds transfers, as well as all other inputs and outputs from the Fedwire Funds Service. Enhancements based on customer feedback include new fields for additional persons or entities, purpose codes for funds transfers, and structured address components. The existing proprietary FAIM format will be replaced with ISO 20022 messages.

No, the Federal Reserve Banks are implementing ISO 20022 messages only for the Fedwire Funds Service and the FedNow® Service. The Fedwire Securities Service and the FedACH Service will not adopt ISO 20022 messages.

Yes, as of June 21, 2024, PCBB was certified by the Federal Reserve Bank as being ISO 20022 compliant. This means PCBB was certified roughly 9 months in advance of the Fed’s deadline and one-day cut-over date of March 10, 2025.

Early adoption means we can ensure a seamless transition, minimize disruption, and provide our customers with enhanced services sooner. It also enables us to thoroughly test and optimize our systems, ensuring the highest level of service and reliability for our customers.

PCBB customers will benefit from greater data accuracy, faster transaction processing, and enhanced interoperability with other financial institutions. The richer data format of ISO 20022 supports more detailed payment information, reducing errors and improving regulatory compliance. The standardized and structured messaging format reduces the need for manual intervention, leading to faster and more efficient transaction processing. This results in quicker settlement times, better liquidity management, and a more streamlined overall banking experience for our customers.

Yes, ISO 20022 supports more detailed and structured data, improving the accuracy and transparency of payment information. This reduces the risk of fraud and enhances our ability to detect and prevent suspicious activities, ensuring a higher level of security for our customers.

ISO 20022 affects all aspects of cash management, including domestic wires, settlement, and liquidity services. The standardized messaging format improves data quality and consistency, reducing errors and enhancing straight-through processing. This leads to faster settlements and better liquidity management. It provides a standardized format for settlement messages, enabling more accurate and timely processing of transactions. This improves liquidity management by providing clearer insights into cash positions and enhancing the ability to manage funds across different currencies and jurisdictions.

Customers can expect enhanced services such as extended remittance information, better payment tracking, and prioritization capabilities. The richer data fields enable more detailed reporting and administrative functions, supporting better financial management and decision-making.

More information and technical details can be found on the ISO 20022 website and on the Federal Reserve’s Fedwire® Funds Service ISO® 20022 Implementation Center. In addition, PCBB has various resources available.