Getting Ready for March 2023 - SWIFT ISO 20022

Getting Ready for March 2023

Swift had planned for migration to ISO 20022 in Nov 2022,and they have postponed the migration to Mar 2023. Payments messaging – the medium by which transactions take place around the world – is changing. The rollout of ISO 20022, a universal digital language that has been designed to meet the needs of modern banking, has been taking place for several years – but there are still many financial institutions who are yet to adopt this shared code.2023 is a milestone year for the rollout. ISO 20022 will become the standard for cross-border payments and cash reporting starting in March 2023. After this date, the previous ‘MT’ messaging standard will be supported for backward compatibility purposes only – making it important that your business can integrate and run ISO 20022 in the coming months.

Over the next years, SWIFT will evolve its capabilities to enable friction-less and instant transactions from one account to another, anywhere in the world. This will unlock huge opportunities for our community of over 11,000 institutions.

The first key date of the adoption programme is 20 March 2023, when cross-border payments and cash reporting messages start the move to the ISO 20022 format based on the CBPR+ Usage Guidelines. That opens a co-existence period that will end, in November 2025, with the decommissioning of the MT Category 1, 2, and 9 messages.

This document helps you identify the mandatory actions to take to be CBPR+ ready.

CBPR+ messages

The following CBPR+ messages will go live in March 2023:

• camt.029 - Resolution of Investigation
• camt.052 - Bank to Customer Account Report
• camt.053 - Bank to Customer Statement
• camt.054 - Bank to Customer Debit Credit Notification
• camt.056 - Payment Cancellation Request
• camt.057 - Notification to Receive
• camt.060 - Account Report Request
• head.001 - Business Application Header
• pacs.002 - Financial Institution to Financial Institution Payment Status Report
• pacs.004 - Payment Return
• pacs.008 - Financial Institution to Financial Institution Customer Credit Transfer
• pacs.009 - Financial Institution Credit Transfer (ADV case)
• pacs.009 - Financial Institution Credit Transfer (core and cov cases)
• pacs.010 - Financial Institution Direct Debit
• pain.001 - Interbank Customer Credit Transfer Initiation
• pain.002 - Interbank Customer Payment Status Report

As a Debtor Agent and As an Intermediary Agent (Sending a Message)

Payment flows

You can choose to send MT messages over FIN or CBPR+ ISO 20022 messages over FINplus using store-and-forward. You can send the following payment messages, either

in MT format

·       MT 103

·       MT 202

·       MT 205

·       MT 202 COV

·       MT 205 COV

or in ISO 20022 format

·       pacs.008

·       pacs.009

·       pacs.009 COV

Exception flows

You will be able to receive the following exceptions flows regardless of the channel used to send the original credit transfer, either:

in MT format

·       MT 103 RETN/REJT

·       MT 202 RETN/REJT

or in ISO 20022 format

·       pacs.002

·       pacs.004

Reporting flows

You will be able to decide to receive the following reporting messages depending on the service levels of the contract you have with your nostro service provider, either:

in MT format

·       MT 210

·       MT 910

·       MT 940

·       MT 942

·       MT 950

or in ISO 20022 format

·       camt.052

·       camt.053

·       camt.054

·       camt.057

As an Intermediary Agent (Receiving a Message) or as a Creditor Agent

Payment flows

You can configure in which format you will receive payment messages:

·       ISO 20022 pacs.008 or pacs.009 messages over FINplus using InterAct store-and-forward with embedded MT 103 or MT 202. Your SWIFT interface will unwrap the message, and will be configured to deliver the MT format to applications, enabling minimal disruption to back-office processes. This behaviour can be modified to deliver ISO 20022 to applications that are ISO 20022-ready.

Both formats will be maintained in the SWIFT interface, ensuring convenient local access to full ISO 20022 data, whichever format was processed.

Note:

After processing the payment, you can select in which format you will send outbound payment messages, regardless of the channel used by the sending bank for the incoming leg of the payment.

·       ISO 20022 messages over FINplus using store-and-forward.

·       MT messages over FIN.

Exception flows

You will be able to receive the following exceptions flows, both:

in MT format

·       MT 103 RETN/REJT

·       MT 202 RETN/REJT

and in ISO 20022 format

·       pacs.002

·       pacs.004

You can however decide which format to use when sending exception flows.

Reporting flows

You will be able to decide to receive the following reporting messages, depending on the service levels of the service contract you have with your nostro service provider, either

in MT format

·       MT 210

·       MT 910

·       MT 940

·       MT 942

·       MT 950

or in ISO 20022 format

·       camt.052

·       camt.053

·       camt.054

·       camt.057

Choose your Readiness Approach for March 2023

As of March 2023, users are free to send their cross-border payments traffic in the format of their choice, ISO 20022 or MT. On the receiving side, however, it is mandatory to have the capability to receive the ISO 20022 format, plain or with the embedded MT, over the FINplus messaging service. It is equally important to be able to continue to receive and process FIN MT messages (especially for the full ISO 20022 users).

A key decision to make is on your readiness approach. You have three options:

• Remain an MT user: not yet ready to exchange ISO 20022 messages natively in March 2023. You will continue sending and receiving MTs after March 2023 and will migrate to ISO 20022 later. Your activities will be focused on the processing of received multi-format MX messages (ISO 20022 with embedded MT).
• Be an ISO 20022 user: ready to send and receive ISO 20022 messages natively as of March 2023. Your activities will be focused on the processing of plain ISO 20022 messages and validating that your infrastructure can still process a mix of MT and MX flows after March 2023 (MT will still be received through the FIN channel).
• Be an ISO 20022 + MT user: sending and receiving a mix of MTs and ISO 20022 messages after March 2023, as some of your branches/applications are ISO 20022 ready while others are not. Your activities will be a combination of the two options above.

Your Checklist of Mandatory Actions for March 2023

Whether you intend to natively adopt ISO 20022 in 2022 or later during the co-existence period, there are mandatory actions you must take to ensure readiness for the go-live of ISO 20022 for cross-border payments and reporting in March 2023.

The key principle is to upgrade your messaging interface and get ready for the reception and handling of multi-format MX messages. The above illustration summarises the generic set of related activities. Depending on your messaging interface, a more specific set of activities could be applicable, for example, for Alliance Lite2 and Alliance Cloud users. The following table indicates where to find more detailed information.

Check List for migration

This interactive checklist gives you a self-assessment of your readiness level for the start of the CBPR+ coexistence period on 20 November 2022. This checklist can be further leveraged to discuss with internal stakeholders to ensure CBPR+ readiness.

Tasks for the following interfaces:

- Alliance Lite2

- Alliance Cloud

- Alliance Access/Entry

- Alliance Messaging Hub

- 3rd party interface

1. Know the project timelines

2. Set up your project team and readiness plan Set up your project team

3. Technical Prerequisites

4. Configure FINplus and SWIFTNet Store-and-Forward Understand what is FINplus

5. Upgrade your messaging interface

6. Configure your Test and Live messaging interface

7. Validate and import the FINplus Bootstrap file into your RMA Interface Set up RMA for Alliance Access/Entry

8. Test

Let us prepare in advance and have smooth sail to the migration.

Source Swift.com

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