Banks unprepared to meet ISO demand, report says

Friday 1 March 2024 12:44 CET | News

US-based Datos, supported by payments systems provider Finzly, has published a report that analyses the readiness of banks for the FedWire migration to the ISO 20022 standards. 

As detailed in Datos’ report, sponsored by Finzly, the March 2025 migration deadline of FedWire to the ISO 20022 standards by all financial institutions can provide a strategic opportunity to improve their payment infrastructure and services. Financial institutions can develop a roadmap for modernisation alongside the migration process and, while there are multiple approaches, the research provides guidance on how to proceed in this journey.

US-based Datos, supported by payments systems provider Finzly, has published a report that analyses the readiness of banks for the FedWire migration to the ISO 20022 standards.

Datos – Finzly’s report findings

Datos’ survey of US corporate finance participants from 1,037 midsize and large organisations underlines that approximately 57% present interest in leveraging automated payables and receivables software, with 46% confirming that they plan to utilise ISO 20022 for this purpose, with 17% of them already using the standard. This contests the observation that businesses are not interested in leveraging the new standard and provides financial institutions with a clear case for integrating ISO 20022 standards into their strategic roadmap prioritisation efforts in 2024.

Furthermore, the report underlines that ISO 20022 can present several benefits for financial institutions, including enhanced payment services, improved customer relationships, and diversified revenue streams. Also, it provides flexibility, interoperability, and efficiency compared to traditional formats, allowing financial institutions to gain long-term development opportunities in an increasingly digital landscape. Datos’ survey underscores the immediate market capabilities for financial institutions to capitalise on existing customer demand for intelligent payment routing and Embedded Banking services supported by ISO 20022 messaging standards.

As the March 2025 deadline approaches, financial institutions face the task of implementing a strategy and selecting a vendor partner that allows them to navigate the difficulties of ISO 20022. Financial institutions that do not take the necessary steps could fall at a competitive disadvantage and expose themselves to operational risks in an evolving environment. According to Datos’ officials, the transition to ISO 20022 represents more than a technical upgrade, as it is a strategic move to improve efficiency, interoperability, and security in payment systems, with financial institutions having to undergo this change to remain competitive and enhance their operations.

Additionally, representatives from Finzly underlined that, as the industry standardises ISO 20022 as the primary message standard, financial institutions need to act decisively to solidify their position in the financial ecosystem. By implementing ISO 20022, financial institutions are set to be able to meet the current demands and needs, while increasing growth in the digital era. Being able to meet certification deadlines for FedWire migration to ISO 20022, Finzly aims to support other financial institutions intending to transition to ISO 20022-native solutions for their FedWire processing.

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Keywords: ISO 20022, ISO, research, regulation, banks, financial services
Categories: Fraud & Financial Crime
Companies: Datos, Finzly
Countries: World
This article is part of category

Fraud & Financial Crime




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