January 09, 2026
Best Practices, Future Potential, and Regulatory Developments
The financial industry is in the midst of a transformation with the global shift to ISO 20022, the XML-based messaging standard that is set to reshape how payments and reporting are exchanged. For Switzerland, a country with a strong focus on exports and cross-border payments, this evolution represents both a challenge and an opportunity.
We recently spoke with industry expert Martin Walder, Head of Payment Standards at SIX Interbank Clearing, based in Switzerland. SIX plays an active role in several committees dedicated to the standardization of national and international payment traffic. During our conversation, Walder outlined how the industry is handling the migration, the benefits and complexities of ISO 20022, and what banks, corporates, and market participants should prepare for in the years ahead.
Why ISO 20022 Matters
ISO 20022, built on the XML-based structure for financial messages, has become the universal language of payments. It is valued for its reliability and flexibility, with XML having been successfully used for decades and offering extensibility for future requirements as well as a reliable syntax. At its core, ISO 20022 provides a global common data dictionary, ensuring standardized structures across payment processes and enabling consistency worldwide. Equally important is its robust global governance, with regulators and market infrastructures increasingly aligned on a single reporting framework (Walder, 2025).
As part of ongoing standardization, ISO 20022 is moving toward the use of structured address information, where elements such as name, city/town, and country code are the minimum requirements. According to Walder, this change is driven by regulatory needs, particularly in areas such as anti-money laundering and sanctions screening, as it enables more precise data matching, reduces false positives, and supports faster compliance checks (Walder, 2025).
ISO 20022 applies across the entire payments chain, from corporates to banks and onward to many global market infrastructures. It ensures structured and standardized data from the initiation of a credit transfer through to final settlement at the creditor’s financial institution. For corporates, this end-to-end processing delivers greater transparency and visibility into what they receive and how they receive it. In the MT940 format, various codes were used to help software quickly identify transaction types, enabling process steering and supporting automation. With ISO 20022, the standardized bank transaction codes and account service reference number are included in camt.052/53/54 messages (the ISO 20022 version of a bank statement) and provides a unique reference assigned by the account-servicing institution. Since it provides a unique identifier for each booking, the data becomes more structured and consistent, supporting reconciliation, helping to detect duplicate payments, and ensuring more accurate transaction tracking (Leone, 2025).
Together, these strengths not only reinforce existing processes but also enable new capabilities such as end-to-end validation, richer data exchange, and improved compliance within the reference in the XML code. Switzerland is particularly well-positioned for this transition: structured references have been in use since 1974, and today two-thirds of all payments already incorporate them (Walder, 2025). This 50-year legacy provides the Swiss market with a strong foundation for adopting ISO 20022 and leveraging its full potential.
Global Drivers of Change
The migration is not happening in isolation. Several exogenous drivers are accelerating adoption within Swift and ISO 20022:
- ISO (International Organization for Standardization) – Setting global standards.
- HVPS+ – Defining best practices for global payments and market infrastructures.
- EPC (European Payments Council) – Shaping Europe’s regulated payment schemes.
- CGI (Common Global Implementation) – Driving corporate-to-bank implementation worldwide through a single common structure and guidelines for implementing ISO 20022.
With Switzerland trending toward a high volume of exports and cross-border payments, aligning with these frameworks is important for the local scheme (Walder, 2025).
Key Benefits for Corporates and Banks
- Greater transparency within statements – With account service references and structured data, corporates gain more precise transaction insights from reporting (Walder, 2025).
- Richer data for compliance – Structured addresses are becoming mandatory, reducing false positives and supporting faster screening (Walder, 2025).
- Structured remittance information – Already supported in ISO 20022 and being phased in for cross-border payments under Swift CBPR+ rules. From the end of coexistence in November 2025, and with stricter validations from 2026 onward, corporates seeking consistent reconciliation will increasingly need to provide structured data. For other connectivity channels such as EBICS or host-to-host, banks may apply different requirements in their own implementation guidelines, so corporates must adapt based on the specific channel used (Leone, 2025).
- Coverage of legacy and future needs – ISO 20022 includes all data elements required from legacy MT messages, ensuring continuity with existing processes, while also introducing richer and structured data to support new requirements and innovations. After the coexistence period, MT messages will be retired for cross-border payments, making ISO 20022 not just a migration but a long-term standard (Leone, 2025).
Challenges in Migration
The migration to ISO 20022 presents several challenges. Banks must ensure system readiness to process new elements, rules, and validations, while also managing version changes, such as the transition from unstructured addresses in payment orders, supported in Switzerland until November 2026, to newer structured address formats (Walder, 2025). In addition, global differences in data requirements, such as regional variations in address structures, create the need for hybrid solutions to maintain interoperability. To succeed, market participants require solutions that can absorb these complexities while preserving stability in their internal processes (Walder, 2025).
Looking Ahead: 2027 and Beyond
By 2027, ISO 20022 is expected to see broader adoption of structured data and new elements, along with more harmonized implementation guidelines across regions, as well as end-to-end availability. At the same time, more frequent updates to message versions will increase complexity but also open opportunities for innovation and richer data overall.
Various stakeholders are engaged in the governance of ISO 20022 and its design, addressing issues and finding solutions for a global standard. For corporates and banks alike, preparation means not just upgrading systems but also aligning with the right partners who can absorb regulatory complexity, ensure ISO 20022 compliance, and maintain operational stability going forward. Regulatory demands will continue to evolve, driving the addition of new data elements within payments and message versions.
“For the future, you need a solution that can digest the new possibilities, handle market diversities, and still safeguard the stability of your internal processes,” says Walder (2025).
Conclusion
The ISO 20022 migration represents a fundamental shift in financial messaging. For Switzerland, it reinforces the country’s role as a hub for robust, compliant, and internationally aligned payment processing. While challenges remain, ranging from implementing structured data to managing evolving versions, the long-term benefits are clear: richer information, stronger compliance, and more efficient payments.
The key to success lies in collaboration between corporates and banks, and between national markets and global infrastructures. By preparing today, market participants can ensure they are not only compliant but also ready to leverage the full potential and benefits of ISO 20022 going forward.
Q&A with Martin Walder
Question: Some clients are already using pain.001 version 3 with structured addresses. What advantage would they gain by moving to pain.001 version 9 in regard to structured addresses?
Answer: With regard to addresses, there are no differences between the two versions. Both support the structured and hybrid addresses. The real benefit comes in later versions of ISO 20022. The current structured address format is largely Euro-American in design and does not always work well for regions such as Asia. The latest version of pain (now releasing pain.001 version 25) introduces more elements, making it easier to support global requirements. While the current version is still acceptable, companies need to be prepared to adopt new possibilities as standards evolve. The key question is whether your internal backend systems, or your partners, can handle these changes if regulations change in the future. Preparing early helps avoid disruption and ensures long-term compliance with global standards.
Question: Why is a structured address so important?
Answer: Correct and complete addresses are required by regulations for anti-money laundering (AML) and sanctions screening. By separating fields such as name, city/town, and country code, banks gain more accurate data to determine whether a payment needs further investigation, reducing false positives. This improves compliance checks for both banks and payees. Structured data also supports Validation of Payee (VoP) checks, making it easier to map and verify information. In markets like Switzerland, additional checks are performed and using structured addresses makes mapping much easier. With the rise of instant payments, structured addresses are critical, as they enable faster and more reliable end-to-end screening within very short processing times.
Question: We are currently using pain.001 version 2, pain.001 version 3, and camt.052/53/54 version 2. When is the right time for corporates to adopt a new version?
Answer: Timing depends largely on the banks. In Switzerland, pain.001 version 3 will be supported until November 2026, after which newer versions will take precedence, though some banks may still accept older formats for a limited period. For camt.052/53/54 version 2, the use of older messaging formats results in information being lost. It is therefore best to move to the camt.08 standard, which is what we are now using here in Switzerland, and newer systems are built on this version. In 2027, the central market and Swift will move to a newer version, and another step will be defined. The best approach for corporates is to consult with their banks to confirm which versions are supported now and plan their migration in the future accordingly.
Walder, M. & Leone, P. (2025). XML Formats in Treasury: Best Practices, Future Potential & Regulatory Developments [Webinar]. Fides Treasury Services Ltd.
