The European Central Bank (ECB) has issued a response to the cross-bank payment network Swift over its plans to delay the implementation of ISO 20022.
The new ISO, which will alter the way that messages are transmitted between institutions making cross-border payments and increase the amount of data, was supposed to take place in November 2021. During its March 2020 meeting the Swift Board and Executive endorsed a decision to shift their ISO 20022 migration date for cross-border payments from November 2021 to end 2022. The unexpected decision was met with surprise from institutions across the European market which now face another hurdle in the monumental transition to the new data-rich financial messaging language.
Swift’s CEO Javier Pérez-Tasso, the ECB’s director general of market infrastructure and payments, Ulrich Bindseil, said:
In your e-mail on 03 April 2020, you confirm being fully aware that your decision would have consequences for participants in Target2 and that it was thoroughly and widely discussed within the SWIFT community. In this context whilst we would have preferred deeper consultation before the decision, we also appreciate the engagement with Swift after the Swift board took its decision in March
It was originally reported that European banks have worked under that assumption that their capability to send existing MT messaging would be decommissioned after November 2021, however, as this assumption is now void European banks will have to review their plans on short notice.
According to a report by Finextra – In response to the publication, Stephen Lindsay, head of standards, Swift, says: “The blueprint we have published further details the scope of each measure and sets out a timeline for delivery. The usage guidelines will be available at the end of June, pilot validation and translation software in September, and a test FINplus ISO 20022 messaging service for payments by the end of November.
“We will continue to work closely with the ECB, EBA Clearing and the Eurozone banking community to ensure coexistence remains as smooth as possible for euro high-value payment system participants.”
Ulrich Bindseil, director general of market infrastructure and payments, ECB comments: “The ECB appreciates the timely publication of SWIFT’s draft blueprint on ISO 20022 high-value payments with a cross border leg.
“The blueprint shall allow Eurozone market participants to reassess their plans for those payments in the interim period between November 2021 and November 2022. It covers further details on Swift’s mitigating measures as well as proposed timelines for testing and implementation to facilitate the Eurozone market participant assessment.”
“While SWIFT’s delay by one year will provide a brief respite to some banks, especially in light of the Covid-19 situation, it also increases the overall project complexity to others, such as the Eurozone banks.”https://t.co/wYyDO5C5FA
— Michael (@val5linx) May 20, 2020