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Read time : 8 mins Added: 12/08/2022
Timelines described below are subject to change by industry bodies. Date last amended: March 2023
Financial Institutions across the globe are preparing to change the way payments are communicated as SWIFT end the use of MT formats. A new messaging standard called ISO 20022 is being adopted that will allow more data to be included. Below we outline what you need to know about the new messaging standards, key dates and what Lloyds Bank is doing to support clients during the transition period.
ISO 20022 is a suite of global payments messaging standards. These standards are already in use for SEPA payments and are being adopted by a number of other domestic and international clearing systems over the coming years. Likely to have the biggest impact to our clients in the near term will be CHAPS and Target2 with the Faster Payments Service due to follow at a later date.
IS0 20022 is a standards methodology that not just defines the XML-rich structured format standards introduced by SWIFT, but it is a community of practices, translation rules and support for promoting, adopting and using these new standards. The ISO 20022 standards for payments and settlement, exceptions and investigations, and balance and transaction reporting will all be integral to the future of payments.
The enhanced and richer structured data in payments messages, exception and investigation messages as well as balance and transaction reporting will result in enhanced automation, interoperability and integration – especially as global clearing systems also migrate to ISO 20022.
For Lloyds Bank and our customers, there are two key sets of dates. In March 2023 the Target2 (High-value Euro) ISO 20022 migration will go live over one weekend; going from MT messages on the Friday, to MX messages on the Monday.
The whole industry will begin the CBPR+ migration from MT to MX at the same time. This is when we have to start receiving those ISO messages. Lloyds Bank will also start sending ISO messages at that time.
The second key date is the revised Bank of England CHAPS migration, which will now be in June 2023. This will mean that for three months, between March 2023 and June 2023 the UK local infrastructure will truncate any enhanced data sent into the UK. A request will be sent by all UK CHAPS participants to their FI clients not to send enhanced data to UK beneficiaries during this period.
Currently the ISO 20022 migration is intended to complete in November 2025. In the interim it is expected that both message standards will be accepted during this co-existence period.
Benefits
Over time businesses will see a number of benefits from the introduction of ISO 20022:
Considerations
While much of the heavy lifting will be undertaken by us (or your Bank), there will be a number of things that corporates will need to consider:
Benefits
Over time financial institutions will see a number of benefits from the introduction of ISO 20022:
Think about your own migration journey
Our journey began in 2016 as we looked to develop our plans to:
The result was the design and build of Lloyds Bank Gem®. Offered to Corporate and Institutional firms, this is our ISO 20022 and API-enabled cash management and payments platform, as well as our new International Payments Platform. We fully support the SWIFT Transaction Management platform and will be ready to send and receive ISO 20022 MX messages.
We will begin migrating Lloyds Bank Plc outbound flow from March 2023 with Target2 first to move, and CHAPS payments following in line with the revised timeframe in June 2023. For all payments, we will initially be using a translator. We will be able to receive MT or MX until the end of the co-existence period.
To find out more about ISO 20022 speak to your relationship manager.
Lloyds Bank’s approach to the migration
Nick Mellish explains Lloyds Bank’s flexible capability to support clients during the transition.
How Lloyds Bank has prepared for ISO 20022
Nick Mellish gives an overview of how Lloyds Bank has incorporated strong technology as part of our plan for the ISO 20022 migration.
Below is a summary of the current SWIFT MT formats and their MX ISO 20022 equivalents.
Existing FIN MTs |
ISO 20022 equivalent |
---|---|
Existing FIN MTsMT 101 relay |
ISO 20022 equivalentpain.001.001.09 (Interbank) |
Existing FIN MTsMT 102 MT 102 STP MT 103 REMIT |
ISO 20022 equivalentpacs.008.001.08
pacs.008.001.08 |
Existing FIN MTsMT 103 MT103 /RETN/ |
ISO 20022 equivalentpacs.008.001.08 pacs.004.001.09 |
Existing FIN MTsMT 103 STP MT 192 |
ISO 20022 equivalentpacs.008.001.08 camt.056.001.08 |
Existing FIN MTsMT 196 (Response) |
ISO 20022 equivalentcamt.029.001.09 (ONLY as a response to camt.056) |
Existing FIN MTsMT 200 |
ISO 20022 equivalentpacs.009.001.08 |
Existing FIN MTsMT 201 MT 202 |
ISO 20022 equivalentpacs.009.001.08 pacs.009.001.08 |
Existing FIN MTsMT 202 (with reimbursement Agents – Fields 53 and 54) MT 202 COV |
ISO 20022 equivalentpacs.009.001.08 - ADV pacs.009.001.08 COV |
Existing FIN MTsMT 202 /RETN/ MT 203 MT 204 |
ISO 20022 equivalentpacs.004.001.09 pacs.009.001.08 pacs.010.001.03 |
Existing FIN MTsMT 205 MT 205 COV |
ISO 20022 equivalentpacs.009.001.08 pacs.009.001.08 COV |
Existing FIN MTsMT 205 /RETN/ MT 210 |
ISO 20022 equivalentpacs.004.001.09 camt.057.001.06 |
Existing FIN MTsMT 292 MT 296 |
ISO 20022 equivalentcamt.056.001.08 camt.029.001.09 (ONLY as a response to camt.056) |
Existing FIN MTsMT 900 |
ISO 20022 equivalentcamt.054.001.08 |
Existing FIN MTsMT 910 MT 920 |
ISO 20022 equivalent
camt.060.001.05 |
Existing FIN MTsMT 940 MT 941 MT 942 |
ISO 20022 equivalentcamt.053.001.08 camt.052.001.08 |
Existing FIN MTsMT 950 |
ISO 20022 equivalentcamt.053.001.08 |
Cross-border Payments and Reporting Plus (CBPR+) is a market practice defining how ISO 20022 will be used for cross-border payments and cash reporting on the SWIFT network.
High-Value Payments Plus (HVPS+) is a market practice originated as part of the ISO 20022 harmonisation initiative. It defines how ISO 20022 should be used for high-value payments market infrastructures such as CHAPS.
Both sets of standards are available on SWIFT MyStandards.