ISO 20022 Migration June APAC Webinar - Swift
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ISO 20022 Migration June APAC Webinar June 2019
ISO 20022 Migration: Background
• In September 2018 the SWIFT Community launched plans to migrate
cross-border payments and cash reporting traffic from MT on FIN, to
ISO 20022 on InterAct, starting November 2021.
• All users of cross-border payments and cash reporting messages
need to prepare for the start of migration in November 2021 (with the
exception of Corporate users of SCORE and certain Market
Infrastructures operating Closed User Groups)
• The following slides summarise the measures SWIFT will put in place
to ensure community interoperability during the four years of
coexistence that follow
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent
2ISO 20022 migration: Scope
Payments Securities FX/ Treasury, Trade Finance
SWIFT will facilitate industry ISO 20022 capability for Responses to the
migration of cross-border cross-border securities flows consultation indicated little
payments and cash. to use on an opt-in basis appetite to stop using MT
messages at this time
Start date November 2021 Decision not to set an end
(aligned with the adoption date for the use of ISO 15022 No plans to migrate to ISO
plans of High Value (MT category 5 messages) 20022 have been made
Payments Systems in the proposed
Eurozone)
4 years coexistence
SWIFT will provide a shared
service to translate between
ISO 20022 and MT
Migration will include all users of payments and cash management messages (MT cat. 1, 2, and 9)
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent 3Why migrate? Benefits of ISO 20022
• ISO 20022 is a global standard for financial messaging, that provides a
standard model across many business domains:
• Payments, Securities, Trade Services, Card Services, FX
• ISO 20022 offers significant benefits for payments compliance
• Additional data elements in ISO 20022 allow specification of a debtor
and/or ultimate debtor, and creditor and/or ultimate creditor
• Rich party information ensures all party data can be included in the
message
• Structure of ISO 20022 party information makes automated screening more
efficient and reliable
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent 4CBPR+ Scope and objectives [1/2]
Create global ISO 20022 Market Practice and Usage Guidelines (UGs) for selected payment
and cash messages, which will be validated on the SWIFT Network in the many to many space
Enhanced ISO 20022 guidelines not Like for Like
Interoperable with HVPS+ Guidelines. Differences should be justified and documented
Incorporate gpi requirements (e.g. UETR)
Incorporate securities requirements for the cash-leg of a securities transaction
May include new messages/new functionalities, e.g. Return & Status messages
Validated on the SWIFT Network (not necessarily the case for HVPS+)
Maintained on a yearly basis: governance to be developed by the group
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent 5CBPR+ Scope and objectives [2/2]
SWIFT will prepare CBPR+ compliant translation rules from MT to ISO 20022 and ISO 20022
to MT. CBPR+ members will be invited to review and comment as of July 2019.
Translation rules approach:
Built on ISO 20022 CBPR+ guidelines
truncation when translating ISO 20022 CBPR+ messages to MT
Truncation will be indicated on MT translation
Usage Guidelines and Translation Rules documentation will be made publicly available
on MyStandards
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent 6Scope of CBPR+ and tentative general publication
MT ISO 20022 equivalent Availability
MT 103/102 pacs.008.001.0x H2, 2019
MT 200 pacs.009.001.0x H2, 2019
MT 201 pacs.009.001.0x H2, 2019
MT 202 pacs.009.001.0x H2, 2019
MT 202 COV pacs.009.001.0x H2, 2019
MT 203 pacs.009.001.0x H2, 2019
MT 205 pacs.009.001.0x H2, 2019
MT 103 RETURN pacs.004.001.0x H2, 2019
MT 202/202 COV RETURN pacs.004.001.0x H2, 2019
Business notifications and status pacs.002.001.0x H2, 2019
Business Application Header (BAH) head.001.001.0x H2, 2019
MT 210 camt.057.001.0x Q1, 2020
MT 900/910 camt.054.001.0x Q1, 2020
MT 941/942 camt.052.001.0x Q1, 2020
MT 940/950 camt.053.001.0x Q1, 2020
MT n92 camt.056.001.0x Q1, 2020
MT n96 camt.029.001.0x Q1, 2020
MT 204 pacs.010.001.0x H1, 2020
MT n95 camt.026.001.0x, camt.087.001.0x, others H1, 2020
tbc
MT 103 REVERSE pacs.003.001.0x H1, 2020
Additional messages to be delivered in H1 and H2 2020 will be communicated in July 2019
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent 7Preparing for the ISO adoption starts today…
Business Technical
Awareness Governance
Knowledge Knowledge
• Not a connectivity • What is the scale of the • ISO 20022 uses a richer • It is a different protocol
project project? set of data (not FIN)
• Who should be driving • It will be published this • It uses different
• Impacts back-office, it? year message structure
business channels and • How will you get the • It might create impacts (XML) and different
compliance. resources? on processes system messages
Building awareness Setting-up a structure is Change of data structure Technical trainings can
early is important key for success can be evaluated ahead be taken ahead
8
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consentIntegrating ISO 20022 for Correspondent Banking – some high-level choices
1. When do you need the capability to send ISO?
November 2020 November 2021 November 2025
Get ready to receive ISO
Mandatory Decision point
Get ready to send ISO 20022 messages
2. How deep should your transformation be?
Connect- Middle- Back-office 1
ivity ware /
Integra- Back-office 2
SWIFT tion
Back-office 3
Mandatory Decision point
9
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consentWhat generic profiles do we see?
Any Financial institution Regional Bank with some
Global Transaction Bank
member of FIN intermediary business
• Mostly beneficiary banks • Banks acting as • Banks with a global reach
consuming international intermediary for ISO • Major suppliers of payment
payments relevant currencies messages across markets
• Low ISO volume beginning • Might have to pass on rich • With extensive network of
of the migration data should they get a rich correspondents
ISO payment messages
Expected ambition: Additional ambition: Additional ambition:
• Drain ISO payments • Transform core back- • Transform themselves to
• Perform an integration office applications to deal build the capacity to send
project with rich data and receive ISO from day
one
10
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consentAdvised Timeline
Any Financial institution Regional Bank with some
Global Transaction Bank
member of FIN intermediary business
Create awareness
Readiness Set-up governance
Evaluate internal knowledge
2019
Perform internal scoping
Scope Engage with vendors partners
Engage with key counterparties
Implement relevant interface release
Connect
Configure and join the new messaging service
2020
Implement back-office changes
Transform
Test with main counterparties
Implement new Authorisations
Integrate
2021
Perform community testing
Migrate Start sending ISO 20022 11
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consentISO 20022 Migration coexistence measures: IR 818
RMA
SWIFT is working on
facilitating the migration.
Supporting tools will be
provided in the following SWIFTNet
areas: Service BIC | DN
Testing mapping
and
Guidelines
Translation
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent
12A new messaging service
New many-to-many SWIFTNet
InterAct Store&Forward service
All users automatically enrolled in
time for migration in November
2021 SWIFTNet
Service
and
Semantic Validation of Cross- Guidelines
border Payments and Reporting
Plus (CBPR+) market practice
guidelines
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent 13Generate authorisations on the new service
The new service will require RMA
Authorisations – RMA
Principle: existing authorisations
on FIN for cross-border should be
replicated SWIFTNet
Service
and
Relationship Management Guidelines
Application:
• Available for ISO 20022 over
InterAct
• SWIFT will facilitate automated
conversion of RMAs
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent 14RMA evolution and support to the migration
1 / FIN RMA enforcement 2/ ISO RMA creation
2016-2019 2020 2021
Ongoing Q1 - 2020 H1 - 2021 Nov - 2021
ISO RMA conversion and ISO Authorisation
Observation phase Import phase FIN Authorisation enforcement
adjustment enforcement
Recording starts on FIN for Recording starts on S&F for
all new RMAs exchanged all new RMAs exchanged
Approach
As a principle: All authorised flows on FIN should be authorised on ISO20022 since the business scope is the
same. SWIFT decided to facilitate the initial creation of RMAs and then let banks control them
• Ahead of the migration, FIN RMAs will be recorded and enforced centrally without impact on daily operations for the
banks that should continue using them in their interfaces as today
• This FIN RMA central repository will be used to create converted RMAs for ISO messages
• A file will be made available to the bank containing the converted RMAs for upload in their interfaces
• There will be an adjustment period for each customer to correct RMAs should it be required
• Interfaces will be enhanced to allow creation at the same time of RMAs on both FIN and S&F for the co-existence
period 15
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consentEnsure interoperability in addressing
Facilitate co-existence and RMA
interoperability of network
addresses
Principle: FIN uses BIC11, InterAct
uses Distinguished names. They SWIFTNet
should interoperate during co- Service BIC | DN
and mapping
existence. Guidelines
SWIFT will enforce a rule to ensure
mapping of the addresses
16
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consentSuggested rules to build Distinguish Names out of registered BIC11
FIN addressing is based on The new service addressing using InterAct Store&
BIC11 Forward is based on distinguished names
Rules
Production BIC11 To Distinguish Names
Distinguish names for production traffic will be derived from the
registered BIC11 as follows:
PPPP CC PP BBB • Always level 3 DN:
Prefix Country Suffix Branch ou=Branch,o=BIC8,o=SWIFT
3 2 1
Identifies an entity a unit • A valid DN would be: ou=bbb,o=ppppccpp,o=swift
17
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consentEnsure interoperability of back-offices
Facilitate co-existence and RMA
interoperability of back-offices
and formats
Principle: Day 1, everyone should
be able to receive ISO 20022, but SWIFTNet
the back processing could remain Service BIC | DN
and mapping
MT based. Guidelines
SWIFT will propose translation
capabilities to enable ISO
integration as of day 1.
Translation
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent 18ISO 20022 coexistence measures - Translation
• Integration managed by the user
API • Translation can be in either direction
For more Translator
• Send or receive side
advanced ISO
20022
ISO
20022 Local • Two options:
Sending Receiving
users and Bank Translator
service
Bank • Centrally managed service exposed
scenarios Central service using the SWIFT API platform
MT
• Local (on premises) API
• Sender signs and sends ISO 20022
In-flow • Both original and MT formats are delivered
ISO
Emphasis 20022 • MT format is routed according to the routing
on simplicity
and minimal Sending logic already configured for MT messages
Back Receiving
disruption Bank
ISO
Translator
MT Office Bank • SWIFT interface changes required;
20022
available 2020 *
Limitations Translation from ISO 20022 to MT risks Pricing In-flow
truncation or loss of data: principles • Free in first year of coexistence; chargeable after
• SWIFT Sanctions screening will be able to API
screen ISO 20022 before translation • Central: free in first year; chargeable after
• Particular concern for intermediaries • Local: standard SWIFT Translator pricing
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent
*Requirements for third party interfaces will be shared by SWIFT with all registered interface vendors in H2 2019.
19Support internal readiness assessments and connectivity testing
Facilitate early testing and RMA
assessment of impacts by
providing evolving test
environments
Principle: deploy test SWIFTNet
capabilities along with Service BIC | DN
Testing mapping
and
community needs Guidelines
SWIFT will propose first
standards related testing
capabilities and after network
testing capabilities
Translation
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent 20ISO 20022 coexistence measures – implementation and testing resources
December 2019 Q1 2020 Q2 2020 H2 2020
MyStandards MyStandards and MyStandards InterAct SnF test
CBPR+ Phase 1 Readiness Portal ‘sparring partner’ service
specifications for CBPR+ Phase 2 portal for CBPR+
specifications
InterAct ‘sparring
MyStandards partner’ for CBPR+
Readiness Portal MT ISO 20002
for CBPR+ Phase 1 CBPR+ Phases 1 &
2 translation
sandbox
MT ISO 20002
CBPR+ translation
specifications for
key messages
(pacs.008 and
pacs.009)
21
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consentISO 20022 coexistence measures – communication and next steps
Quarterly updates on the overall Dedicated briefing sessions for all Progress updates on CBPR+
migration programme shared with Chairpersons to support published in Standards Quarterly
the Board (either verbally or in the discussions in local communities Review (SQR), on swift.com (see
form of Information Reports), and below), and on a dedicated page on
the wider community MyStandards
A dedicated ISO 20022 migration information hub on SWIFT events (Business Forum, Regional Conference,
swift.com Standards Forum) and dedicated sessions at Sibos in
+ quarterly updates via email newsletter London
To ensure maximum coverage and track awareness per connected institution, regional campaigns aimed at
reaching all users will be set up and centrally monitored.
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent
22Communication plan for APAC community
Look out for
invites!
Next APAC September 2019 Across APAC, Japan (in Japanese), China (in Mandarin)
Webinars November 2019 and Australia (in English)
July – December 2019 ISO 20022 Migration Community Workshops
Community In-person for 19 countries: AU, NZ, CN, IN, ID, JP, PH, TH, KR, MY, SG,
Workshops HK, TW, BN, MO, VN, KH, LA, MM
Webex for remaining countries: LK, BD, NP
iso20022migration@swift.com
Questions Or contact your Account Manager
Or email to cindy.foo@swift.com
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent 23www.swift.com June APAC Webex DRAFT MMorioka 20190620 24
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