SWIFT will provide new market practice guidelines and free validation and translation software to mitigate the impact of the ISO 20022 delay on EU banks.
SWIFT has published a draft blueprint designed to mitigate complications that arose from its March decision to delay the migration to messaging standard ISO 20022 for cross-border payments and cash reporting by one year to end-2022, reports Finextra.
The blueprint was requested by the ECB (European Central Bank) to help European banks adapt their transition plans to accommodate SWIFT’s new timelines, particularly in light of the EU’s T2-T2S consolidation project, scheduled to go live under the original timeline in November 2021.
The ECB had asked SWIFT to undertake a number of mitigating measures, including to create updated market practice and message usage guidelines for ISO 20022 cross-border payments for the European banking community by end-June 2020.
SWIFT was also asked to provide free validation software for cross border payments travelling via European payments market infrastructures, and free translation software for cross border payments which have to be mapped from ISO 20022 to MT.
In the new blueprint, SWIFT acknowledges that its change of timeline introduces a data truncation issue for Eurozone HVPS participants that operate as intermediaries in transactions with a cross-border ‘leg out’, during the period November 2021 to November 2022.
SWIFT says it will provide market practice guidelines for sending euro payments originating in TARGET2 and EURO1 with a crossborder ‘leg-out’, that ensure data used to populate the payment can be transported using the existing MT standard without truncation.
The usage guidelines will be published by end-June alongside an on-line test portal that will enable users to test that messages comply. Validation software will be available from mid-September and licensed by SWIFT free of charge until end-2022.
Translation software – to also be available from mid-September and licensed free of charge – can be used by intermediary euro HVP participants to translate from ISO 20022 payment messages to MT for the cross-border leg of ‘leg-out’ payments.
An ISO 20022 network service will additionally enable users that have agreed bilaterally to use ISO 20022 for payments and cash reporting to do so on an opt-in basis.
The blueprint is available here (download).