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ISO 20022 Messaging Standard: Are You Ready?

March 07, 2023
  • Investor Services
Industry specialists share what firms need to do to prepare for the adoption of a new messaging standard, as well as the downstream benefits and impacts.

Migrating to ISO 20022

March 2023 marks the start of industry migration to a new SWIFT messaging standard for cross border payments and reporting. BBH specialists Meg Salgado and Derek Coyle discuss their learnings from the migration to the ISO 20022 standard from an operations standpoint and share their key takeaways for financial institutions. 

In this Q&A interview, BBH’s European Custody Product Manager, Derek Coyle and Investment Operations Product Executive, Meg Salgado, provided their operational perspective on what migration to a versatile ISO 20022 messaging standard means and shared three key takeaways for intermediaries.

Key takeaways:

  • ISO 20022 creates a common language for sending and exchanging payment and securities transaction message data across the globe, enabling faster processing and improved reconciliation. It’s therefore a richer data set and firms should prepare for full MX message adoption
  • It’s a complex migration involving a large upgrade in the quantity of data available and will therefore have significant upstream and downstream impacts throughout users’ operating models
  • Providers will migrate at different times, which adds to the complexity of the migration. Collaboration with data integration engines should help seamlessly translate the old with the new for messaging formats.

As a custodian facilitating trade instruction and execution for clients using these common standards, how is BBH going about the migration?

Derek Coyle: BBH started developments for readiness with regards to ISO 20022 messaging in MX formats some years ago, as one of the first movers on migration, initially for requirements such as the Shareholders Rights Directive II and then continuing to incorporate further developments in recent years. This has included integrating more MX messaging in annual Swift releases and more recently in planning for conversion of cross-border payments and reporting in March 2023.

Over the past 18 months we’ve been running an internal project to upgrade our systems and tools to be ready for the requirements and ensure the ability to take in and send out MX format messages, as needed.

What benefits might counterparties see from BBH making these changes and what should they do to get ready?

Coyle: The introduction of ISO 20022 messaging should bring standardization in terms of message usage and the formats within. This should increase the efficiency of message distribution and decrease the chance of message failure or bounce-back, which usually need manual intervention to resolve. Use of the ISO 20022 standards will also ensure engaging more up-to-date technology solutions and capabilities which will then be easier to build on in future for further development needs.

While the initial period of MX message usage for cross-border payments starts from March 2023, it will continue during the co-existence period until November 2025. During this time, users of such messages should be preparing for full MX message adoption, both from a technology and procedure perspective and engaging with their counterparties for alignment in terms of readiness.

Can you provide practical examples of the changes BBH is making?

Coyle: The March 2023 implementation focuses specifically on messages under a group called CBPR+ (Cross-Border Payments and Reporting). From a practical point of view this includes messages which have historically been in the MT100, MT200 and MT900 series of messages.

I will provide an example of one of the commonly used message types subject to change in March this year:

  • MT103 messages are currently used to instruct a funds transfer, specifically for a cross-border or international wire transfer. As well as being used to instruct a transfer, the MT103 messages can be used both as a proof of payment and, where needed, as an advice message because they can show the route of payment between associated banks. The MT103 will be replaced by the MX format pacs.008 message. The pacs.008 message is much larger than a MT103 and has more structure which will now break out the message into sections, such as Group Header and Credit Transfer Transaction Information. The Group Header provides more identifying information while the Credit Transfer Transaction Information includes more detailed coding allowing for correct and timely settlement.

There are clients who have multiple custodian relationships and as ISO 20022 is such a large and flexible data set, there will be complexity with normalizing and managing the different permutations, before thinking about the value of a richer data set. What should firms be thinking about?

Meg Salgado: Yes, for those firms, migration is complex and involves managing the different standards across their provider network over time. Counterparties will be ready to turn on 20022 messaging at different points in the co-existence period, which means firms will need project management to deal with the changes across their provider network over time. And, they have to be prepared to manage messaging in both standards at any point in time. Since the two standards contain different levels of detail in the data, firms need to make changes to their systems to process the new richer data. So the challenge is two-fold – first the mechanics of managing the two messaging formats over a multi-year co-existence period across a network of providers and second preparing core systems to take advantage of the new richer data set.

What could firms do to ensure migration doesn’t distract from their core business and what’s the value of working with a third-party provider to preserve those resources? 

Salgado: The best thing firms can do to ensure a standards change like this one works to their advantage is to actively manage how they invest in the conversion. A service like Infomediary® can insulate clients from the noise of a complex, multi-year co-existence period by translating back to the 15022 standard, or another preferred format. This will allow the firm time to change their core systems to be ready to get the value from the new data set. As Derek noted, the richer data set is intended to decrease message failure and the need for manual intervention to resolve, but those gains will only be realized when the firm’s core systems are updated to make use of the new data. A third-party provider can help free up valuable resources to allow firms to focus on the updates needed to take full advantage of the new standard when it makes sense for their business.


In summary, flexibility, commonality, versatility, as well as collaborative partnerships that use flexible solutions customizable to the situation, will be key for ISO 20022 migration. Reach out to your BBH representative for more information on how you can prepare.

ISO 20022 Messaging Standard: Are you Ready?

BBH’s Janet Du Chenne talks to Juliette Kennel, Head of Standards at SWIFT, about what firms need to do to prepare for migration to SWIFT's ISO 20022 messaging standard, as well as the downstream benefits and impacts.

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