When Ferdinand Magellan’s expedition set out to circumnavigate the globe in 1519, the crew had no idea that their captain would be killed and the journey would take nearly three years to complete. Juan Sebastián Elcano, one of the 18 survivors of the group, actually led the last leg of the journey from Magellan’s death in the Philippines in 1521 to the crew’s return to Spain in 1522. The hardships faced by Magellan’s crew may be very different from what we see in modern global efforts, but the one thing that rings true is that global transitions aren’t for the faint of heart. On July 14, the Federal Reserve completed its long-planned transition to ISO 20022 for Fedwire Funds Service. That marked a major milestone — but not the finish line. Community financial institutions (CFIs) offering international payments should now turn their attention to the next critical date on the calendar: November 2025. That’s when Swift will fully require all cross-border payments and cash reporting messages to use the ISO 20022 standard, retiring the legacy MT messaging system for good.CFIs offering international payments should plan now for this change. Even if your institution relies on a wire service provider or a correspondent bank for compliance, you’ll still need to understand what’s changing and how it could affect staff and customers. After November 2025, only ISO 20022-compliant messages will be accepted through Swift’s network, which connects more than 11K financial institutions worldwide.For a clear view of this migration timeline and what it means for your institution, see Swift’s official ISO 20022 Implementation page.What This Means for CFIsDuring the current coexistence period, both legacy MT and ISO messages are accepted, but after November 2025, dual-format flexibility ends. Your institution should connect with its provider now to ensure processes are ready for the global “cutover.” Commercial clients, especially those sending wires through templates or uploading files, may be required to provide additional structured information such as payment purpose codes or expanded remittance details. Staff should be briefed on these changes to prevent confusion and customer disruption.Why ISO Still MattersThe move to ISO 20022 does much more than meet a regulatory deadline — it fundamentally improves the way financial data travels through the global payments system. With the older MT messaging formats, financial institutions often face challenges around limited field sizes, unstructured information, and inconsistent data interpretations. These constraints can force banks to improvise, sometimes mixing different types of critical data together or leaving out important details altogether. The result is frequent delays, more manual investigations, and a poorer experience for both banks and their customers.ISO 20022 changes this landscape by introducing a clear, structured framework for payment messages. This improved messaging standard has several far-reaching benefits:
- Streamlined operations. Banks can process payments more efficiently, with higher straight-through processing rates and fewer errors, thanks to precise and well-organized data.
- Stronger compliance and risk management. Enhanced data structure allows compliance teams to more effectively screen for AML and sanctions issues, reducing the number of false positives.
- Better customer experience. Clients benefit from clearer payment details, greater transparency on fees and timing, and easier reconciliation of their own accounts.
- Support for innovation. Having consistent and detailed payment data enables banks to develop smarter services, deliver more tailored offerings, and gain meaningful insights from transaction trends.
- Global compatibility. ISO 20022 helps ensure payments data can move seamlessly across different regions, payment networks, and systems, with less chance of data being lost or misinterpreted along the way.
- Long-term adaptability. The standard is built for modern requirements, able to integrate with various technical platforms, APIs, and formats as payment technology evolves.
Ultimately, ISO 20022 sets the stage for an industry-wide leap forward: payments that are faster, safer, and more transparent from end to end. By capturing clean, structured data at the source, every step in the payment journey — from initiation to settlement — is improved, reducing friction for staff and customers alike.For a deeper exploration of these benefits and real-world examples, readers can visit Swift’s feature: Why ISO 20022?Looking AheadAs the Swift cutover to ISO 20022 approaches, it’s crucial for CFIs to assess their readiness, coordinate closely with their providers, and keep both staff and customers informed. Early preparation and proactive communication are key to preventing disruptions and ensuring a smooth transition to the new global standard for cross-border payments. By staying engaged and anticipating both technical and customer-facing changes, financial institutions can help pave the way for a successful migration — no matter how close the deadline may be.
