ISO 20022: Preparing
for US adoption
ISO 20022: Preparing for US adoption
What is ISO 20022?
ISO 20022 is the preeminent data standard used by the financial industry to create consistent payments messaging, including high-value,
batch, and real-time payments.
Through more comprehensive and structured data, ISO 20022 enables better accuracy and efficiency in communication between financial
institutions and organizations.
ISO 20022 can deliver significant benefits to banks through:
• Improved efficiencies: Enriched, structured data provides operational efficiencies
through improved straight-through processing and reduced errors.
• Customer experience: Reductions in payment returns, failures, and manual
investigations speed up the payment process for customers.
• Technology modernization: Compatibility ensures access to the latest
third-party solutions that increasingly utilize the new standard.
• Data analytics and insights: Standardized, enriched data can be leveraged to better
capture and analyze customer and transaction metrics for improved client insights.
• Fraud reduction: Additional, enhanced data elements enable banks to
analyze and identify patterns of fraudulent activity more efficiently.
Why does it matter?
Payment systems across the globe have already adopted ISO 20022 or have announced plans to adopt. Real-time payments systems have
widely adopted the standard, and many high-value systems have also announced plans to support ISO 20022, including Fedwire, Lynx,
and SWIFT.
In the United States, ISO 20022 readiness is a strategic imperative for banks using CHIPS and Fedwire. CHIPS will become ISO compliant
April 2024, while the Federal Reserve is migrating to the new messaging format on March 10, 2025. While global banks have likely begun ISO
compliance in response to global mandates such as SWIFT CBPR+, domestic participants will need to assess the impact of The Clearing House
and the Fed’s mandates on their business. It’s critical that organizations start the preparation for migration ahead of the two deadlines.
A delayed migration poses numerous risks including:
• Disruption in payments transacting and users having to revert to making
payments through bank portals or other manual-based means.
• Inability to position and reconcile prior-day activity and reporting, increasing
the likelihood of accounts not being funded or being overdrawn.
• Insufficient bank resourcing support to complete migration efforts.
• Inadequate time to thoroughly upgrade, test, and configure all
affected systems, exposing banks to increased risk.
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ISO 20022: Preparing for US adoption
Where are banks at in the journey?
Financial institutions are at varying stages in the ISO journey demonstrating differing levels of investment in adopting the standard. Current
progress largely depends on participation in regional vs. global payments schemes and the level of complexity in the organization’s
payments infrastructure.
Generally, we find:
• Community/small regional banks are in the early stages of (e.g., planning and program
standup), or have not started, their journey and are only focused on meeting the minimum
requirements set forth by the network.
• National leaders and global mid-tier banks are also in the planning stages but challenged
between only meeting minimum compliance mandates versus leveraging ISO 20022 as a
foundation for longer-term, strategic payments modernization efforts (e.g., offering customers
new use cases and additional payment methods such as RTP and FedNow).
• Global leaders are the most mature in their journey with ISO readiness efforts focused on not
only compliance but also capitalizing on the long-term benefits of ISO 20022.
What are the considerations?
There are many factors to consider when deciding upon the correct approach for ISO 20022 readiness. There are both operational and
competitive risks and advantages to consider. The chosen approach will vary by bank dependent on factors such as: appetite for change,
overall ambition, budget, and alignment to broader strategic goals.
Financial institutions will need to be mindful of and prepared to address considerable complexity along the journey including:
Tech infrastructure ISO 20022 implementation is a single-day cutover involving many platforms, downstream
complexity systems, and integration points processing a variety of message types and data.
Data quality and Additional or restructured payments data elements will require updates to multiple
standards data repositories and require storage of legacy data alongside the new enriched data.
Testing TCH and the Fed have stringent timelines leading up to implementation
requirements with differing testing requirements across multiple environments.
Client/vendor Coordination and, in some cases, testing will be required with
coordination vendors, partner financial institutions, and clients.
Employee End-to-end processing and management of payments messaging will
training require training and coordination across multiple lines of businesses.
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ISO 20022: Preparing for US adoption
What are the readiness options?
Options for achieving ISO 20022 readiness range from the minimum viable path toward enabling continued participation in the networks to a
more strategic and forward-looking investment focused on completely modernizing payments infrastructure.
At the core, there are fundamental activities that are required to ensure compliance and readiness for continued participation in Fedwire
and CHIPS.
• Additional data capture from senders and recipients to ensure minimum compliance.
• Message restructuring to reformat data into the ISO 20022 format.
• Integration updates to continue uninterrupted exchange of data
between internal platforms and third-party solutions.
• Data storage updates to ensure the full ISO 20022 dataset can be
retained in accordance with regulatory guidelines.
Failing to properly plan with sufficient lead time for ISO 20022 compliance could lead to operational risk to banks.
What are the implementation challenges?
When determining where to focus changes, how to enable updates, and to what extent systems will adopt the new standard, there are
multiple avenues to becoming ISO 20022 compliant, including:
• Upgrading or enhancing existing internal systems.
• Replacing internal systems with ISO 20022-enabled third-party solutions.
• Upgrading or replacing third-party solutions to versions
or new platforms that support ISO 20022.
• Deploying translation tools that can perform translation outside of payment infrastructure to
avoid impact to legacy technology and processes.
Additionally, organizations must decide the extent to which they will support ISO 20022 message types and data, such as:
• Lowest effort: Address only newly required fields or changes to existing required fields.
• Medium effort: Support sending/receiving optional fields that improve
client workflows (e.g., ultimate debtor, ultimate creditor, etc.).
• Highest effort: Support optional message types (e.g., status requests)
to enhance processing capabilities and client use cases.
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ISO 20022: Preparing for US adoption
How can Deloitte help?
Options for achieving ISO 20022 readiness range from the minimum viable path toward a more strategic and forward-looking
commercialization of ISO 20022. Leading banks are looking beyond minimum readiness and exploring how to leverage the new dataset to
improve their operations and benefit their customers. Failing to take advantage of the enriched dataset presents a potential competitive risk
to banks.
Each bank’s journey toward ISO 20022 may look different, but regardless of priorities and approaches, ISO 20022 readiness will likely become
a priority for all organizations in the coming years. Through our global and North American experience, Deloitte is well positioned to support
clients across the readiness spectrum.
1. Strategy and design: We bring a point of view on implementation options and competitor approaches to support clients with:
• Standing up ISO 20022 program delivery model (e.g., enterprisewide vs. LOB-specific) to define
program requirements, timing, and operating model.
• Defining target-state ambition (e.g., minimum compliance vs. commercialization) and initial
scoping to align on business priorities and guiding principles for project execution.
• Conducting impact assessment to determine system impacts, preferred solutioning, and
resourcing and budget requirements to deliver.
2. Accelerators and execution support: Through our existing work, we offer a series of tools to accelerate an organization’s ISO 20022
readiness journey to ensure timely completion of key milestones ahead of go-live.
Diagnostic Framework
Self-assessment framework to comprehensively evaluate payments infrastructure for ISO 20022 readiness adoption
Business Requirements Starter Kit
Requirements templates based on business architecture covering common customer profiles and
requirements to accelerate project scoping and ISO 20022 readiness requirements
Translation Layer
ISO message translation tool built using VolPay to accelerate data mapping and message translation activities
Message Simulation and Treatments
Predefined messages and automated test harnesses that simulate inbound wires messages for unit testing in sandboxes
Test Case Repository
Robust repository of 9,000+ test cases linked with business requirements,
to accelerate test cases and ensure comprehensiveness
Sample Test Data
Automated smoke and regression suites for inbound and outbound transactions, end-
to-end processing across interfaces, and regular health checks
These tools support delivery teams from initial impact assessment through to data mapping, requirements and design, and development
and testing.
3. Innovation Lab: Deloitte’s ISO 20022 Innovation Lab program enables clients to pressure-test additional hypotheses or long-term
strategic opportunities as a result of ISO 20022—leveraging Deloitte’s resources to identify and prioritize proof of concept and prototype
builds. The Innovation Lab enables clients to commercialize payments infrastructure and capitalize on additional ISO 20022 benefits and
opportunities.
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ISO 20022: Preparing for US adoption
For more information, please contact:
Zach Aron Ulrike Guigui Raquel Gomez Sirera Hunter Ford
Principal Principal Senior Manager Manager
[email protected] uguiguideloitte.com
[email protected] [email protected]About Deloitte
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