The one Canada square clock in Canary Wharf. Barclays will assist corporates adopt the ISO 20022

ISO 20022 for banks and non-bank PSPs

The adoption of the messaging standard ISO 20022 is at the core of a major transformation across the payments industry, involving Market Infrastructures such as CHAPS, Financial Institutions and Payments Service Providers.

Introducing ISO 20022

ISO 20022 (sometimes referred to as MX by SWIFT) is a standard that allows for richer, more structured data content than the current legacy messaging standards and will bring consistency to the financial messages passed between participants.

The change to a new format has a number of significant implications for all participants across the industry.

What is changing?

The new format replaces the well-known MT1, 2 and 9 series messages. In simple terms this means that all commercial payments will migrate from MT103 to pacs.008 format, treasury payments will migrate from MT202 to pacs.009, and balance and transaction reporting messages will migrate from MT 9xx to camt messages. In addition, the Exceptions and Investigations processes migrate to MX messages over time.

We will all need to get used to a new language. Instead of an Ordering Party and Ordering Bank, we will need to get used to Debtor and Debtor Agent. There will also be some new concepts that do not existing in MT messages, such as Ultimate Debtor and Creditor fields, as well as the Instructing and Instructed Agent.

For a complete overview of new message types and terminology, please see www.swift.com/standards/iso-20022^ . In addition, you can find detailed formatting guidance on Barclays FIG Community at www.swift.com/Mystandards^ and online training modules on www.swiftsmart.swift.com^. You will require a SWIFT account to access these sites.
New messages will be transmitted across the SWIFTNet Interact (FIN+) network, rather than the current FIN network. This implies that SWIFT connected banks will require a new SWIFT Gateway and have Relationship Management Application keys (RMA) that are grandfathered from the SWIFT FIN network.

The new SWIFT Transaction Management Platform will provide support for translation, truncation and enrichment, and should help the industry to transition to the new format at different paces.

For more information about the network changes, please see www.swift.com/standards/iso-20022.^
The Market Infrastructures of the top ten currencies around the globe are either already using the new format or are migrating to ISO 20022 in the coming years. The below graphic provides a brief overview of this shift.

Open the Market Infrastructure Changes PDF^†

During the coexistence period (from March 2023 to 2025), if an MX message is received, Barclays will send as MX. Likewise, if an MT message is received, Barclays will send as MT (unless settling across a Market Infrastructure that has migrated to ISO). Therefore, please be aware that you will receive a mixture of MX & MT messaging from Barclays until 2025.

For GBP payments, please refrain from using the MX format until June 2023 to avoid truncation issues.

Please note: Migration timelines are subject to changes based on industry developments and specific market guidance. Barclays does not accept liability for the accuracy of the dates mentioned.
ISO 20022 also provides flexibility over which data elements are encouraged and, in some cases, which are mandatory.

As we progress through this transition, Barclays will be communicating more detail around which data elements are mandatory via SWIFT MyStandards. We encourage you to consider these developments in your strategy for the coming years.

The document below provides an overview of mandatory data element requirements.

Mandatory Data Elements PDF^†

Benefits of ISO 20022

This new format replaces SWIFT MT. Standardising the format so that it is similar across the globe (e.g. FPS and CHAPS using the same format) helps to drive value for users, with potential for innovation, improved security and speed.

Although the change is driven by Market Infrastructures and SWIFT, there are lots of commercial benefits in using this new format for the industry.

Operational efficiencies

Enhanced data available to you may have potential benefits for improving your reconciliation and cash flow forecasting.

FinCrime

Anti-money laundering controls, sanctions screening and fraud monitoring available.

Analytics

Richer, more structured data offers opportunities for better analytics. Better structure to the data we capture can help inform decision making.

Enable innovation

Build once, use for many different domestic and international payments.

In addition to the direct benefits ISO20022 will bring to your organisation, you will also enhance your customer proposition. All your retail, SME and corporate clients could benefit from richer payment data, operational efficiencies and a centralised treasury function as a result of this industry migration.

What this means to your organisation

Barclays intends to support banks, broker dealers and non-bank PSPs that want to adopt the new format. We recognise that each organisation is different and may need a partner to schedule the change to suit their situation. Please speak with your Relationship Director or Cash Specialist to discuss how we can further support your transition.

What this means to you PDF^†

Testing

There are three routes for self-testing.

Plan

Use SWIFT MyStandards to validate that your ISO20022 messages meet CBPR+ usage guidelines. You will find a dedicated Barclays community page within MyStandards which will detail best practice and Straight Through Processing (STP) guidance. For access to our community page, please reach out to your Relationship Director.

Prove

The SWIFT Test Sparring Partner (TSP) is a new automated testing facility that will support the community in its readiness testing of CBPR+ messages and flows. It is an avenue to prove your systems are ready to send and receive the new ISO2022 messages. Playing the role of a fictitious institution on the FINplus Pilot service, it allows users to simulate flows as a Debtor, Creditor or Intermediary Agent for a set of pre-defined test scenarios.

Assurance

Penny testing provides the final piece of assurance before you switch to sending CBPR+ messages. From November 2022, when CBPR+ messages are live on the SWIFT network, you can test your set up by sending send low value payments to accounts held with Barclays or other banks. Barclays will be able to confirm that payments were processed STP and you will be able to check that the correct advices and account posting were generated and everything was reconciled as expected.

Further Support

SWIFT
Introduction to the new standard, golden source for formatting specifications and online training resources.

ISO20022.org ^
Site dedicated to ISO 20022 developments, message definitions and additional details such as external code sets, national clearing codes etc.

Payments Market Practice Group^
The PMPG is an independent SWIFT advisory group, comprised of payments experts from around the globe.

Bank of England^
This section of the Bank of England website is dedicated to the adoption of ISO20022.

European Central Bank^
This section of the ECB website is dedicated to the adoption of ISO20022.

For any further queries or support, please reach out to your Relationship Director.

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