SWIFT announced the availability of its new In-flow Translation service and confirms that it now offers a full ISO 20022 customer testing environment for cross-border payments.
In-flow Translation will enable financial institutions to realise the benefits of rich data when they migrate to ISO 20022, even if their counterparts have not yet adopted the standard. The availability of a test environment means that customers can now prepare for it a year before it goes live.
The service translates rich ISO 20022 messages into the existing MT format for banks that are not ready to process ISO 20022 messages immediately – and it ensures both message formats are delivered so customers always have complete data.
This ensures that all financial institutions on the SWIFT network can continue to transact as normal during the industry’s migration, which starts in November 2022 and runs to November 2025.
SWIFT has made In-flow Translation available for testing early to help banks familiarise themselves with it and gain experience in the new operational environment.
Early adopters will be able to start using the service from August 2022 on an opt-in only basis.
All banks will be automatically enrolled in the service in November 2022 to coincide with the mandatory start of cross-border migration and the go-live of ISO 20022 for high-value payments in the Eurozone.
“One of the guiding principles behind our strategy for instant and frictionless payments is to ensure that nobody is left behind and that institutions are able to migrate in a way that suits them and their customers,” says Stephen Lindsay, Business Lead, SWIFT Platform.
“We are delivering on this promise through the launch of In-flow Translation and the completion of the customer testing environment for ISO 20022, ensuring our community has plenty of time to prepare for the new standard.
The move is a key component of our strategy that will unlock significant business benefits for banks. In-flow Translation will be vital to making the transition as smooth as possible by supporting interoperability between messages types.”
By enabling richer, better-structured data to be carried in payments messages, ISO 20022 will provide for an improved end-user experience and forms a key building block on which the future of the financial industry will be built.
What does it mean for the payments industry?
ISO 20022 is emerging as a common language and model for financial messages across the world. It isn’t a new standard as real-time, high-value payment systems have already adopted it. However, the significance of the shift will unfold over the next few years.
As major currencies adopt the formatting, SWIFT estimates that 80% of global, high-value payments by volume will be processed through ISO 20022.
- ISO 20022 is a standard for exchanging electronic messages
- Uses XML syntax and offers structured, rich data
- This format is already used by many real-time, low-value, and high-value clearing systems around the world
- Offers richer references and improved remittance information
- Requires planning ahead: multi-year project for FIs to implement value-added services to enhance experience