ISO 20022 Migration for Corporates

The benefits of ISO 20022 migration are obvious: greater transparency, increased reliability, lower costs, and a higher degree of automation for all market participants involved. However, there is still a long and, in some places, rocky, road ahead before this goal can be achieved.

When viewing the initiative from a global perspective, it immediately becomes clear that the various payment systems all have different approaches and timetables for how and when to carry out the migration. For example, Europe’s largest clearing systems for large amounts, TARGET2 and EURO1, are implementing their migration with a “big bang” in November 2022. Although SWIFT is also launching its migration at the end of 2022, it is planning a transitional period lasting until 2025. Several other systems have yet to even designate a timeframe for the migration.

Implementation will be accompanied by technical and procedural challenges — especially for globally active corporations — and will also involve corresponding difficulties with coordination. Given these factors combined with the migration not being mandatory, most participants are dragging their feet.

However, it would be ill-advised for companies to assume that they are safe just because there is no obligation. Sooner or later, these standards will also become the new standard for the client-bank relationship through a variety of ways. This fact is extremely clear in the case of Germany, for example, where the ISO 20022 migration is also being made mandatory for companies through amendments to the data transfer agreement (“DFÜ-Abkommen”).

A comprehensive end-to-end implementation by all participants is ultimately essential if all stakeholders are to benefit from the upcoming migration. This also means that companies need to act to address not only their processes and the format migration itself, but also the accompanying changes in regard to the structuring and generation of their data.

Some measures must be planned proactively. Even if the direct instructions and migration requirements for client-bank communication are downstream or delayed relative to the migration of interbank communications to ISO 20022, we nonetheless recommend that companies begin communicating with their banks early enough to understand their plans and the resulting corporate requirements.

The expenses and impact of migration should not be underestimated, which is why it is all the more important to have a professional partner that can provide you with optimal support for the corresponding analysis as well as implementation.

Fides offers extensive capabilities and possibilities to guide companies in making the necessary adjustments, and provides targeted support for client-side migration activities. Our expertise allows us to ease our clients’ workload by ensuring that the impact and the need for adjustments are made more transparent, and guarantee a high degree of flexibility by providing optimal support for new developments and offering individualized solutions:

• Format flexibility: Even if the bank has already carried out the change to the new account statement formats (e.g. CAMT), Fides can still handle older formats (e.g. MT94x) and maintain these differently for each bank or account, or harmonize them in all directions in accordance with client specifications. We can also facilitate the individualized conversion of all globally active payment transaction formats to a single target format. This pertains not only to the reporting side, but also to the payment-initiating formats.
• Structured information: We structure and format information in accordance with the requirements of the recipient bank. This allows our clients to continue to send unstructured information.
• Data allocation: In the event that the client is not (yet) able to process the expected fields in their formats to the bank, Fides can activate dynamic data mapping.
• Static data enrichment: In cases where certain statistical information cannot be supplied by the client, Fides can supplement or modify this information in accordance with fixed or dynamic rules.

Depending on the status of a company’s internal systems (ERP and/or TMS), adjustments or even a major release may be necessary. If you are a corporate treasurer looking for a holistic roadmap for migration, Fides can provide additional support by working with your organization and other third-party providers to plan and implement the adjustments optimally within your overall business context.

See the article on TMI at: https://treasury-management.com/articles/iso-20022-migration-for-corporates-start-planning-now/

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