Cross-border payments via Swift’s ISO 20022 migration, originally set to roll out by November 2021, have now been set back a year and are expected to come by the end of 2022 instead, according to reports.
The move is the company’s answer to banks having trouble with decommissioning and preparing their infrastructure for the move.
ISO 20022 is set to make changes to the payment landscape as a whole, according to the company. The reason for the delay, according to Swift, is so that every firm, no matter the size, has the requisite time to make needed changes at whatever pace is comfortable for them. By moving the roll-out date, Swift said it hopes to avoid short-term investments, instead hoping to foster a more permanent community.
Bank officials, though, acknowledged the complexity of the transition, saying the move will require different steps for various types of business. Paula Roels, head of market infrastructure and industry initiatives at Deutsche Bank, said the short migration deadlines will necessitate some varied approaches.
For instance, she said some banks had been taking steps to whittle down the services they offer, intending to go through with ISO adoption and then, later on, attain the full benefit that comes with the new rules.
Larger firms may have an easier time of it, with more resources to plan ahead for the change. Smaller firms could be looking at challenges with migration mapping, changing legacy systems and intricacies of various banks and corporates. Banks have generally cited the risks, complexity and scale as the biggest potential hurdles.
However, the ultimate deadline for the complete stop of the old Swift MT system will be 2025.
Swift had a busy year in 2019, seeing over $77 trillion in cross-border payments with over 3,900 global payment initiative (gpi) members. Around 60 percent of payments were sent using gpi. Since it was introduced three years ago, gpi’s quick payment processing and ability to track payments have attracted customers.