The world of payments is holding its breath. In two days, it will be SWIFT turn to announce a potential delay on the adoption of the new ISO20022 norm.


For the past few days, the discrete world of Payments has displayed a particular atmosphere. After the Euro migration in 2002 followed by the S€PA migration in 2012, European financial institutions were ready to embrace the 3rd payments revolution: the adoption of the ISO20022 norm. A spectacular turn of events! After months of intense lobbying from the commercial banks, the ECB has finally announced a 4 months’ delay for the flows in Euro, to March 20th, 2023. What will happen to non-euro flows? SWIFT, the great conductor of international payments declared it would issue its final decision this Thursday, October 27th. The market is holding its breath …

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Strange feeling of « déjà-vu » …

COVID-19 pandemic and the difficulties encountered by the financial sector have already led to the delay one year ago of the two initiatives: the Target 2 et Target 2 – Securities platforms consolidation led by the ECB for the payments in Euros on one hand and the start of the SWIFT migration for the foreign currencies on the other hand (both falling under the transition to the ISO20022 norm). This common decision was very welcome by the financial industry and helped dodge multiple side effects for these two very dependent initiatives. Now a year has passed, a new deadline was just decided for the T2T2S consolidation. The first reason put forward: the new platform has proven very unstable for the past few months; most European banks were not able to finalize their tests in the appropriate conditions on the scope of Euro payments. But is it sufficient to postpone the launch of the migration of non-Euro flows? What will SWIFT decide?

Good or bad news?

Now that Target 2 is postponed, financial institutions will have to face several difficulties in any case, which will differ depending on the direction SWIFT will take.

In fact, in the case where go live dates are aligned on March 20th, 2023, operational teams will have to be kept in place, motivation be intact despite a false start, dependencies and arbitrations shall arise in the already complicated budgetary discussions for 2023. In the case where SWIFT maintains its initial date on November 21st, 2022, dealing with the desynchronisation between the two intricated programs will be the main issue. Flows exchanged would coexist in the former format defined by the ISO15022 norm (MT format) in euro via Target 2 as well as in the new ISO20022 format, MX, for the non-Euro payments. Is such a desynchronization even possible a month far from the target date? The question is more rhetorical…

Thus, like long distance runners seeing the finish line escaping, financial institutions who have launched important and costly projects (in hundred million euros for the biggest players) must envisage multiple scenarios.

To conclude, if certain banks will efficiently use this extra time to finalize necessary developments and tests, others – already ready – would have gladly finished the race here. Let us beware of our European tropism. European banks can reasonably hope for a report from SWIFT for their international counterparts have only started their migration programs (non-European banks have until November 2025 to finalize their projects), none the less remains that the postponement of T2/T2S consolidation program remains a European problem!

Heads or tails?
The answer in 48 hours …

Written by

Louis de V., Partner | Banking & Insurance

Written by

Antoine D., Manager | Banking & Insurance