Overcoming the challenges of ISO 20022 Implementation: A strategic guide for banks

In a recent webinar, Swift announced to members that, in the event they had not yet initiated an ISO 20022 programme, then the time to do so is now. It is clear that there is still some uncertainty within the industry about the overall readiness of banks and financial institutions generally to meet the November 2025 deadline for the switch from MT to MX messaging.

Part of the challenge faced by financial institutions is the sheer scale of transformation. It is recognised that payment systems of all types are constantly undergoing change and that significant proportions of bank budgets are spent simply keeping the lights on (McKinsey). The traditional profile though, sees many small and medium sized changes being applied on a constant basis, rather than the systemic level of change associated with the adoption of ISO 20022.

Swift suggests that the end of coexistence has vast implications. They cite that applications, people, processes, and infrastructure are all impacted. Whilst this is undoubtedly true, adoption of ISO 20022 also impacts product management, business development, customer success, and fraud among others.

There is no one-size-fits-all strategy for financial institutions facing the challenge, but there is a clear theme around which a strategy can be built.

This breadth of impacted areas of a bank clarifies the cornerstone of a successful strategy – engage the stakeholders. There will be a natural bias to what is considered success across a bank’s teams – technology teams will be focused on integration and compliance, and business teams on exploitation and commercial risk. It is vital that these parallel lines of thinking align at the earliest stage to ensure that the result is a holistic programme that serves all elements of the bank and its clients for the immediate and long term.

A successful strategy will vary in degree from institution to institution; however, it is apparent that the core building blocks of a successful strategy are:

Stakeholder Engagement: 

The change impacts multiple business units and each must engage in the planning process both to cover the needs of that unit and to ensure that the programme manager has a holistic view of the readiness of the organisation. Quality Engineering (QE) plays a critical role here, ensuring that all stakeholders understand the technical and operational implications of ISO 20022 and align their efforts accordingly to ensure seamless integration and compliance.

Readiness Assessment: 

The organisation needs to be very clear, and indeed bluntly honest, about its readiness. The organisation as a whole, people, processes, systems, and applications will need to be assessed and any risk points identified. Quality Engineering principles can help by providing a rigorous assessment framework that highlights areas of risk and ensures that all components are evaluated accurately.

Technology Status Review:

The first two steps should clarify the systems that will be impacted, the nature of the solutions that support those systems (in-house, vendor software, outsourced), and where the responsibility might lie. Vendors must be contacted to determine the plans for their own solutions and how these might impact the institution. In-house systems must be evaluated in terms of implications of change – where change may not be possible, or highly punitive, alternatives must be considered and the necessary work to secure must begin as soon as possible. QE ensures a thorough review and validation of all technological components, fostering a proactive approach to identifying and addressing potential issues.

Programme Plan: 

Once the core elements have been identified and an assessment of the likely effort to ready them for change has been completed, it is imperative to develop the programme plan involving all necessary stakeholders and suppliers. Quality Engineering integrates detailed test plans and validation checks into the programme plan, ensuring that each phase of the migration is meticulously verified and validated.

Communication: 

Clear and concise communication must be made with all individuals and organisations impacted. Clarity must be provided, and feedback sought to mitigate the risk of error through assumption. QE supports this by establishing clear communication protocols and feedback loops to ensure all parties are informed and any discrepancies are swiftly addressed.

Client Engagement: 

Implicit within communication is the need to inform clients, and it is imperative that any impact on those clients is communicated loud and early. Most corporate client interactions can maintain MT messaging between the corporate and the bank, but the client should be clear of the potential for truncation and any impact that has on its own plans, however nascent. QE ensures that client-facing changes are tested for usability and functionality to prevent disruptions.

Partner Selection: 

Many institutions will not have the scale, resource or experience to manage this programme without external assistance. Organisations that can bring real-world knowledge of change in this space will be vital allies in ensuring a successful programme. Here at Roq, we have experience working at the heart of the RTGS programme, and with many banking clients, and can provide invaluable support and guidance throughout the migration process.

Process Redesign: 

All impacted processes across the bank must be redesigned to align with the needs of the target state environment. These may need to be aligned with new or upgraded vendor solutions, which may involve close alignment with the vendor programme – it is conceivable that vendors will be focused on ensuring their solution readiness rather than the issue of aligning with the revised internal processes of their clients. QE ensures that redesigned processes are thoroughly tested and validated, reducing the risk of operational issues post-implementation.

Testing: 

Rigorous testing is always critical, but especially so for such a high-profile industry event. Roq strongly recommends a clear commitment to Quality Engineering principles from the outset. Within a QE framework, a bulletproof test programme must be built to ensure the migration process is executed as smoothly and seamlessly as possible. Comprehensive testing covers functional, performance, security, and compliance aspects, ensuring that the system performs as expected in all scenarios.

Deployment: 

Clearly the riskiest part of the programme on the basis external parties including Swift, clients, and other banks will now be exposed to the output of the programme. A well-constructed deployment strategy will maximise the chances of success at this stage. QE supports deployment with robust release management and contingency planning to mitigate risks and ensure a smooth transition, avoiding any unexpected downtime or negative impact on end users.

Regulatory and Compliance Audit and Report: 

During and post-event the necessary audit materials must be produced to evidence the work undertaken to ensure success and compliance. QE frameworks ensure that all regulatory requirements are met and that comprehensive documentation is maintained for audit purposes.

For those organisations now looking to embark on their journey to meet the November 2025 deadline, it will be clear that the systemic change involved needs an equally systemic response. Planning is crucial and commitment at the highest levels within the institutions’ governance controls will be needed to ensure that all necessary parties and resources are engaged with common purpose - failure to be ready may result in exclusion from the cross-border payments space and carry reputational damage that will be long borne. One of the key issues for many companies is limited knowledge of the standard or its impact. It is imperative that companies seek support from external entities with the experience and skill set to assist in delivering a well-constructed programme against increasingly tight timelines.

If your institution is gearing up for the ISO 20022 migration, partnering with a Quality Engineering specialist like Roq can make the difference between a timely, smooth transition and a disruptive, costly overhaul. Our expertise in delivering robust, reliable, and compliant solutions ensures that your migration process is efficient and error-free. Contact us today to learn how we can support your ISO 20022 implementation and help you achieve a seamless transition to the new messaging standard.

ISO 20022 webinar:

To further assist your organisation in navigating the complexities of ISO 20022 migration, we invite you to join our upcoming free webinar featuring payment industry leaders from Swift, JPMorgan Chase, Barclays, iFast Bank, and The Fintech and Payments Advisory Network.

This session offers a unique opportunity to gain valuable insights and engage with experts who are at the forefront of the ISO 20022 transformation. Don't miss this exclusive opportunity to refine your strategies, pose your questions to the experts and prepare for the future of payments. Secure your spot on Monday, 24th June, at 5pm. This discussion is tailored for senior professionals directly involved in or impacted by the ISO 20022 migration.