Testing ISO 20022: A Holistic View

The transition to ISO 20022 means many financial institutions will have to interface their systems to various external environments. Among the notable projects in this domain is SWIFT's migration from MT to MX messaging, emphasising adherence to the International Organisation for Standardisation (ISO) standard. In the UK, the Bank of England's commitment to implementing the ISO standard in its Real-Time Gross Settlement (RTGS) replacement programme is helping to progress the overall adoption of this new way of working.

 Many institutions will have to interface their systems to multiple external environments utilising ISO 20022 as well as supporting other schemes, both domestic and international, that have not yet made the change. In the immediate term, the key issue for financial institutions of all forms is being able to meet the mandates of the various entities implementing the standard. The most pressing of these for institutions in the UK is the 2025 deadline set by the Bank of England for RTGS connection.  

 Being ready for these deadlines and being able to accommodate other initiatives as they evolve over time creates a dilemma when considering testing and assuring bank systems. Most of the schemes and central banks provide their own version of a test environment to enable and support connection to their system. This is an excellent option for single system connection, however it does not necessarily support the long term need of an institution.   

The core fact is payment systems don’t stand still. “Business as usual” is a benign statement, but for most organisations it means constantly implementing new releases, mandate changes and different services on an on-going basis. Keeping the lights on in a modern payments environment is a massive task, and one that has been made increasingly difficult by solutions constructed in silos.  

Testing is one area where the use of a fragmented approach has left many organisations with almost unmanageable environments that are costly and complex, and often don’t deliver the assuredness the organisation needs.  It is critical that companies embarking on the ISO 20022 pathway take a strategic approach to quality assurance rather than viewing each project individually; potentially resulting in yet more islands of knowledge that could deliver far more benefit to the institution if properly aligned. 
 
Using a consistent simulator and a proven quality methodology across all ISO 20022 deployments in place of, or at least as an augmentation to, any full end-to end testing is the obvious answer for a bank. This allows concentration of knowledge in one testing technology stack, maximising reuse and reducing cost, as well as enabling learning to be captured and applied across all projects: creating a true testing centre of excellence.  Full end-to-end testing with SWIFT and others can be addressed with heightened confidence and reduced logistical cost in due course. 

This approach delivers an environment where financial institutions can genuinely break test their systems in any way, and as often as they wish, without concerning themselves with test windows, or the costs of accessing an external service. Highly automated regression platforms can be established that will support more rapid deployment of changes with significantly reduced risk. 

The move to ISO 20022 creates major challenges in the immediate and long term, but if organisations act with the right strategic mindset, they can deploy an approach and a method from the outset that can serve them well for the next generation of payments evolution. 

What is the current sentiment surrounding ISO 20022? 

Many people are wondering “is the industry truly ready for a complete overhaul of messaging in the payments landscape?” Studies from  Celent  have found that 28% of large banks believe they won’t meet the November 2025 target and will need help to meet the deadline or rely on available stop-gap measures. Even more worrying, only 3% of corporates expect banks to be 100% ready, suggesting client confidence is extremely low ahead of this pivotal transformation.  

Here at Roq, we are working closely with institutions involved in the ISO 20022 programme. We understand the current roadmap, and what is still to come. If your organisation could use some help with this critical transformation, or just some extra resource for test teams, we are here to help. Reach out to us and we’d be happy to discuss your project challenges and requirements.