What is ISO 20022 and Why Do I Need It?

The banking world is undergoing a massive shift. The old MT formats are being retired in favor of ISO 20022. But what does this mean for your business?

What is ISO 20022?

ISO 20022 is a global standard for electronic data interchange between financial institutions. It uses XML (Extensible Markup Language) to structure data, allowing for richer and more detailed payment information compared to older text-based formats.

Why are Banks Enforcing It?

• Better Data: It carries more information about the payment purpose and parties involved.
• Automation: Structured data allows for higher rates of straight-through processing (STP).
• Compliance: Enhanced screening for anti-money laundering (AML) and fraud.

How to Comply Without Changing Software

Many legacy accounting systems still export old formats or simple Excel files. Upgrading these systems can be costly and time-consuming. The easiest way to comply is to use a conversion layer.

You can continue working in Excel as you always have, and simply use a converter to transform that data into the compliant ISO 20022 XML format required by your bank.