AFP 2024 Poll Results: The Value of ISO 20022 for Corporates

The transition to ISO 20022 is a hot topic for corporate treasury and finance professionals, and for good reason. As an open, global standard, ISO 20022 offers enhanced payment data, enabling streamlined treasury processes, risk mitigation, cost reduction, and the potential for worldwide innovation. At AFP 2024 in Nashville, Alessandra Peter, Senior Treasury Manager at Autoneum Management AG, Russell Hoffman, Director of Treasury at Unibail-Rodamco-Westfield, and Mark O’Toole, Head of Sales & Partnerships – Americas at Fides presented a session that highlighted the importance of ISO 20022 for corporates, and presented a detailed view of the opportunities and challenges ahead.

The Corporate Perspective on ISO 20022

During the session “The ISO 20022 Paradigm Shift,” the speakers conducted three polls of the 250-person audience to gauge the readiness, challenges, and priorities of corporate treasury and finance professionals regarding the transition to ISO 20022.

Poll #1: How Prepared Is Your Organization for the Transition to ISO 20022 Messaging Standards?

• Very prepared: 10%
• Somewhat prepared: 43%
• Not prepared, but planning to start soon: 35%
• Not aware of ISO 20022: 12%

These results show that while there is a growing awareness of ISO 20022, most organizations are still in the early to middle stages of preparation. A significant portion is aware of the changes but has yet to initiate the migration process.

Poll #2: Which Benefits of ISO 20022 Are Most Important to Your Organization?

• Improved payment processing efficiency: 37%
• Enhanced data quality and analytics: 30%
• Better regulatory compliance and reporting: 19%
• Increased interoperability with global financial networks: 13%
• Other: 1%

The majority of attendees prioritized the efficiency gains and data quality improvements that ISO 20022 can offer, demonstrating the importance of streamlined payments and actionable analytics in today’s treasury environment.

Poll #3: What Key Challenges Does Your Organization Face When Adopting ISO 20022 for Treasury Operations?

• Technical integration and system upgrades: 46%
• Staff training and expertise: 25%
• Compliance and regulatory requirements: 10%
• Cost of implementation: 16%
• Other: 3%

The top challenge for many organizations lies in the technical work required to prepare for migration. This highlights the need for proper planning, investment in technology, and access to specialized expertise.

Why ISO 20022 Matters for Corporates

The benefits of ISO 20022 are clear. For corporates, the move to this new format isn’t just about adopting a new standard — it’s about unlocking a wealth of opportunities to drive efficiency and transparency:

• Streamlined Payment Processing: Enhanced, structured data means payments are processed faster and more accurately, reducing manual intervention and errors.
• Better Cash Flow Transparency: With richer data available, treasury teams can gain a clearer picture of their cash flow, aiding decision-making and forecasting.
• Improved Analytics: The new format’s structured data allows for enhanced analytics, enabling better insights into payment patterns and business trends.
• Simplified Compliance: Regulatory reporting becomes easier with enriched and standardized data, making compliance with local and international regulations easier.

The Role of a Bank Connectivity Provider

Implementing ISO 20022 is not without its challenges. Integration with banks, TMS and ERP vendors, and other financial systems can be complex, particularly as each financial institution and provider will have its own support timeline and approach to adoption. This is where a bank connectivity provider like Fides can make a significant difference. Here’s how:

1. Simplified Migration: Connectivity providers have experience in dealing with multiple banks and systems, enabling a smoother and more coordinated transition to ISO 20022.
2. Reduced Costs: By offering standardized solutions, a connectivity provider can reduce the costs associated with bespoke integration projects.
3. Technical Expertise: These providers offer specialized knowledge in XML-based messaging formats and can handle the technical heavy lifting, freeing up internal resources.
4. Continued Support: You receive ongoing support post-migration, ensuring that any issues or updates are handled efficiently without the need for in-house technical staff.

4 Steps to Prepare for the Transition

To ensure a successful migration to ISO 20022, it’s important to think through all the details that will be involved. These four key considerations will help you prepare:

• Engage Early: Start conversations with your banks, third-party providers, and internal stakeholders to align on timelines and requirements.
• Audit Your Data: Assess the quality of your existing payment and reporting data to identify any potential gaps or inconsistencies.
• Create a Project Plan: Develop a detailed project timeline that includes testing phases, training for staff, and contingency planning.
• Leverage Expertise: Consider partnering with a bank connectivity provider that can guide you through the process, from initial planning to post-migration support.

Looking Forward

As our expert panelists at AFP 2024 concluded, the benefits of adopting ISO 20022 far outweigh the initial challenges. The enriched data and streamlined processes will not only enhance operational efficiency but also create new opportunities for innovation and growth. By partnering with a reliable bank connectivity provider, corporates can ensure a smoother transition and capitalize on the full potential of this new standard.

If your organization is still in the early stages of planning, now is the time to act. With the right strategy and partners, you can streamline operations and take advantage of all that ISO 20022 has to offer. To find out how Fides can help, contact us.

Fides is the world leader in multibank connectivity, payments and transaction communications. A market leader for more than a century, Fides is committed to the principles of Open Banking, making treasury and financial operations as efficient, transparent and secure as possible for all organizations.

Fides provides everything organizations need for efficient cash and liquidity management, all through a single platform — along with connectivity to more than 13,000 financial institutions through an unmatched range of methods and channels. Thousands of companies around the globe rely on Fides’ connectivity capabilities and comprehensive workflow, reporting, conversion, validation and security services, for their own businesses and for extending services to their clients.

Whether you access via the secure Fides ONEHub or take advantage of our seamless integration with third-party ERP, TMS and other backend systems, Fides is the only platform you need.