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What is ISO 20022?

As the payments industry grows and evolves, there’s a rising need for a global standard to enable unified and highly structured processes. 

It has ultimately led to a transition for banks and financial institutions worldwide. Instead of relying on the SWIFT messages exchanges network ISO 15022, the financial industry

has now begun adopting the new financial messaging standard – ISO 20022. 

With a message structure that guarantees richer data, an international standard, and additional benefits, implementing ISO 20022 becomes an international necessity.

In the following sections, we explore ISO 20022 in detail.

ISO 20022: Definition

Before we dive in-depth into the impact of ISO 20022 on the world of global and UK online payments, it’s essential to lay the foundations and explain what this messaging standard is. 

Introduced to the world in 2004, ISO 20022 is an international standard for exchanging electronic messages between businesses and financial institutions. It represents a global language or a unified standardisation approach to defining financial data and transforming this data into transactions. 

In short, ISO 20022 helps create a single language for all financial communications worldwide. 

This innovation establishes a common platform for exchanging payment messages and payment data through the following:

  • The use of a modelling methodology to collect financial data, transactions, and associated message flows in a syntax-free manner;
  • The creation of a central dictionary for financial communications between institutions; 
  • The use of a range of Extensible Markup Language (XML) and Abstract Syntax Notation (ASN 1) protocols; 
  • The reliance on multiple XML and ASN.1 design rules to turn message models into XML or ASN.1 schemas. 

While SWIFT plans to recede its current MT messages standard for payments in November 2025, popular jurisdictions and financial institutions are already implementing ISO 20022. 

Why is ISO 20022 important?

Standardisation is at the heart of ISO 20022 – the most crucial component of this transition. 

When you handle financial transactions, standards play a crucial role. Working with international messaging standards helps make the exchange of sensitive files consistent, secure, and efficient. It also creates seamless communication between customers and service providers and simplifies approaches. 

The global recognition of ISO 20022 paves the way for a single language for payment messages and data. It improves the quality of information and effectively impacts payments globally. 

It’s also essential to mention that ISO 20022 tackles some core challenges of existing standards and systems, such as inconsistencies, inability for customisation, and others. Businesses and IT specialists will rely on the same message structure for transactions by offering a business message syntax agreed upon all over the world. 

The flexible framework behind ISO 20022 enables it to cater to the changing needs and modern methods. Without a doubt, this creates various benefits associated with the worldwide implementation of ISO 20022. 

Enriched data

ISO 20022 gives access to consistent, rich, and structured data that can be utilised for all financial business transactions, regardless of their type or other peculiarities. 

It brings new and exciting opportunities for automation and interoperability, which are expected to result in higher efficiencies, modern approaches, and customer data. 

Although financial institutions already acquire significant amounts of payment information, in its existing form, it is not well-structured and presented. 

Enriched data will improve financial organisations’ ability to use crucial insights where necessary. It will also enhance customer experience and help deliver quality payments, as the provided services will be improved due to the providers’ capability to personalise and be more flexible. 

ISO 20022

More accurate compliance processes

ISO 20022 sets the scene for accurate compliance processes that benefit all market infrastructures as it provides less manual intervention and enables automation.

Based on modern XML technology, the new standard will tap into every market infrastructure and payment system, promoting efficient integration and reliable compliance processes. 

Via its structured data model, ISO 20022 offers a standardised approach to financial messaging, including detailed financial information and context in transactions. This format allows for precision in regard to compliance checks, where key elements can be quickly and easily identified, extracted, and analysed.

Improved fraud prevention measures

ISO 20022 demands a more granular approach to data collection. 

Combining this with the unified standards, protocols, and formats that financial institutions and involved parties will follow, creates a safer environment and streamlined processes regarding security.

ISO 20022 is expected to improve regulatory reporting, secure payment information, and enable informed strategic decisions behind business processes. 

In addition, it creates new opportunities for efficient sanctions, AML validations, and claims and investigations.

Improved analytics

ISO 20022’s structured essence enables advanced analytics and pattern recognition.

While this also impacts the quality of fraud detection, it builds transparency and offers additional context to financial institutions. 

Financial institutions can easily detect patterns, trends, and anomalies in transaction activity as they enable extra data components in financial messages (like transaction identifiers, transaction types, regulatory tags, and timestamps). 

Enhanced Straight Through Processing rates

Straight Through Processing (STP) rates represent the percentage of transactions directly sent through the system from start to finish with zero manual input. 

Through the development of messages via a single language internationally and the creation of an identical processing format, ISO 20022 improves STP rates, minimising format maintenance costs. 

It is essential for the payment industry, as performance is often evaluated based on straight-through processing rates.

What is ISO 20022 compliant?

What is ISO 20022 compliant?

Financial institutions, organisations, or businesses compliant with ISO 20022 meet fully the standards described in the framework of the standardization. They also conform to the specifications and guidelines outlined by its protocols. 

Compliance with ISO 20022 consists of several components:

  • Message format – Those compliant with ISO 20022 must adopt specific message formats, including structure, syntax, and data elements. 
  • Message transport – Additionally, compliance with ISO 20022 requires the use of specific protocols and communication channels that have been standardised for all. For example, it may demand to employ protocols like SWIFT for connectivity and message transport. 
  • Data attributes – According to ISO 20022, all financial messages must contain identical attributes to achieve interoperability. Some fields include transaction identifiers, participant details, and payment instructions. 
  • Legal requirements – To be ISO 20022 compliant, institutions and organisations may also need to upgrade their systems and processes to align them with regulatory expectations for security, privacy, and transparency. 
  • Interoperability – Lastly, ISO 20022 compliance means that institutions and organisations can send, receive, and process ISO 20022 messages through their built infrastructures.

Do you need ISO 20022?

If you operate in a business area related to payments, securities, trade services, cards, or foreign exchange, you need to implement ISO 20022. 

The SWIFT community is actively supported and encouraged to adopt ISO 20022 ahead of November 2025, when the coexistence between the new and old standards will end. 

The new standard will apply to Automated Clearing House (ACH), high-value, and cross-border payments. 

Failing to address the upcoming changes may negatively impact your business. For example, the transition to instant payments in the payment industry could affect banks that fail to implement ISO 20022. In this case, current product offerings may lack the ability to operate alongside new methods and approaches in the industry. 

In addition, ISO 20022 is directly linked to the processing of substantial data volumes, exceeding those of traditional formats. Financial systems must consider this and ensure their ability to respond to this regarding real-time payments, compliance checks, fraud prevention processes, and daily liquidity management. 

When you consider the adoption of ISO 20022, familiarise yourself with new data requirements, implementation best practices, and any other regulations that must be met. 

What is the roadmap for ISO 20022 for UK payments?

As a country with a payment industry well-known for its commitment to standards, the UK is to move towards the adoption of ISO 20022. 

For many payments business ventures, there are New Payments Architecture requirements under which the implementation of ISO 20022 is mandatory as a payment messaging standard. 

The Bank of England has begun its journey to renew its Real Time Gross Settlement (RTGS) system and CHAPS payments. Throughout the procedure, the Bank will adopt the ISO 20022 global payments messaging standard to guarantee information interoperability throughout the UK’s main interbank payment systems. 

More than 70 countries have successfully implemented ISO 20022 into payment systems, enabling the standard to unify formats from different payment methods that were originally impossible to work in harmony.


The adoption of ISO 20022 has already begun and is yet to unfold its full potential. As more and more institutions tune their systems and infrastructures according to ISO 20022 standards, the more interoperable, transparent, and high-quality global payments will be. 

While staying up to date with new technologies and regulatory changes is often a challenge, the shift towards ISO 20022 offers promising advantages. 

Frequently Asked Questions

ISO 20022 is a global standard for financial messaging that enables electronic data interchange between financial institutions and businesses. It offers a common language and syntax for exchanging financial information, including payments, securities, and trade finance transactions.

To adopt ISO 20022, you must evaluate your organisation’s existing messaging formats, systems, and processes. Create a detailed adoption plan that includes objectives, timelines, resource requirements, and milestones.

Some of the core challenges to implementing ISO 20022 include managing additional data, where validation occurs across several communication channel chain steps on the sending and receiving sides. A single missing colon creates risks for a multi-million transfer, such as failure to receive authorisation or experiencing significant delays.

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