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A wave of ISO 20022 deadlines is fast approaching for financial institutions. The purpose of moving to the new standard is to adopt a common messaging format for financial transactions. Since the idea was first conceived in 2008, the concept of harmonizing the vast array of disparate global payment systems has shifted from an ideal scenario at which the markets would someday arrive to a necessity for banks today. The clear need for standardization, combined with the November 2025 deadline, has prompted a perceptible shift in the pace of adoption across the industry.
Although corporate treasurers are not required to make the transition, many have seen their banking partners accelerating toward ISO 20022 as this November’s deadline gets closer and have felt mounting pressure to migrate their own systems. But the question remains: Should corporate treasury groups follow their financial institutions and become early adopters of the ISO messaging format? Or should they wait to see how the migration unfolds across the financial services sector before committing time and resources to the transition?
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Transition Is Inevitable—Eventually
Ultimately, corporate treasury groups will not escape the impacts of the move to ISO 20022. With the U.S. Federal Reserve and Swift planning their migrations this year, payment flows will undoubtedly be affected as improved data quality and enrichment enable real-time payments. Banks will see a reduction in errors and time needed to validate payment, making payment flows faster and more efficient. And, since most payment rails will be using the same messaging structure, there will be a growing opportunity for greater interoperability between systems. For example, although NACHA ACH and Swift MT101 instructions are very different, the transition will align both systems with a common international standard. Treasurers who want to integrate with both Swift and ACH will no longer need expertise to maintain two different languages and translate between them; both payment systems will communicate using ISO 20022.
In the long run, this will be good for everyone involved in global payments. Though the scale of the migration is daunting, its benefits are undeniable. Beyond greater system interoperability, ISO’s messaging will also provide more detailed information pertaining to remittance, payment purpose, and payment address details. This will enable better matching and reconciliation, resulting in better straight-through processing with fewer exceptions.
Corporate treasuries that undertake the ISO transition early will not only enjoy a smoother migration, but also reap the benefits sooner. They will move away from outdated legacy systems and bring their treasury infrastructure in line with the latest digital developments. They will also gain access to data that has the potential to revolutionize their insights into and analysis of their payments and cash flows. The onus, therefore, lies with corporate treasurers to ensure their organizations are moving proactively to undertake the payment messaging transition.
Out with the Old: A Digital Overhaul
The ISO 20022 migration necessitates a large-scale digital overhaul. This has proven to be a significant barrier to transition for many corporate treasuries that work with an assortment of banks and therefore deal with a range of competing standards and proprietary messaging formats. The legacy payment formats still in use across the industry are not compatible with new messaging standards—specifically, they cannot handle the increased volume and complexity of data that ISO messaging transmits along with every transaction. To utilize ISO 20022, a corporate treasury must move away from bespoke CSV-based bank portal payment formats and invest in new systems that can support the additional data.
ISO messages are typically more robust than their predecessor formats. The receiving bank’s systems will have been enhanced to utilize enriched ISO information to its advantage, which will prove to be an issue for corporates when receiving or sending messages. Messages sent from outdated systems, such as MT101, may be missing the key information that makes the newer ISO messages more robust and efficient. And, on the flip side, if a corporate can only accept messages in a legacy format, it may lose some key information as the ISO message is translated “down” to accommodate the outdated system. Lost details could encompass remittance information, purpose codes, and longer text fields that will be truncated if systems are not updated.
Committing to transition is even more daunting because there is no clear deadline by which corporates are required to comply. As long as ISO 20022 remains optional for corporate treasuries, questions of who will migrate, and when, remain unanswered. Some organizations may be deterred by the risk of spending time and money to complete a digital overhaul when their competitors may choose not to. However, watching and waiting to see who makes the first move—or, indeed, who makes a move at all—may not be a wise strategy. As the reality sets in that ISO is the future for all, banks are likely to begin moving treasury clients away from MT101 and other outdated systems, as we have seen in some regions today. Corporate treasuries will inevitably need to update and upgrade their digital infrastructure, and those that move quickly will capitalize on ISO’s benefits sooner.
In the immediate term, corporate treasurers should conduct a cost-benefit analysis to assess the long-term savings they can expect from deploying a system that will unlock ISO’s benefits, namely increasing automation, reducing manual intervention, and improving forecasting accuracy. In addition, taking the time now to plan, rigorously test, and implement a treasury-technology overhaul—before banks start imposing deadlines—will lower the risk of disruptions and failed payments. A proactive approach to the ISO transition will also streamline future onboarding of new banking partners, eliminating the need for corporates to learn new systems, such as moving from ACH to Swift.
Within companies that decide to make the transition this year, corporate treasurers are positioned to proactively lead the transformation project, ensuring external alignment with banks and advocating for system changes internally. As they do so, they must keep in mind that banks are free at any time to make changes that will impact their corporate treasury customers. For example, institutions may decommission legacy Swift, CSV, and other messaging formats that they currently use to communicate with customers.
It is also worth noting that companies which do not align with their banks’ transition timelines may face operational disruptions, including payment processing errors or compatibility issues, as their banks become ISO compliant. Corporate treasury teams must engage early with their financial institutions, technology vendors, and service providers to ensure their treasury systems remain interoperable as the banking infrastructure evolves.
Don’t miss Part 2 of this article, which will describe the ways corporate treasuries can leverage ISO 20022 to transform their processes and where to start in making that happen. It will publish early next week.
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Jerald Seti
Jerald Seti is the vice president of product management for financial services at ION Treasury, having joined Openlink/ION in 2004. He provides bank connectivity and transaction lifecycle management solutions for corporate treasuries, financial institutions, and central banks. Prior to ION, Seti served as capital markets product manager at MISYS, and before that, he improved automation at Wall Street firms. He holds an MBA from NYU’s Stern School of Business and a BA in economics from New York’s Binghamton University.
