Honesty called for in ISO 20022 migration efforts

It is of the “utmost importance” that banks are honest in their response to the European Central Bank (ECB) as they report their readiness for the “big bang” introduction of ISO 20022 in November 2021, said Fiona van Echelpoel, deputy director general, directorate general market infrastructure and payments at the ECB.

By Heather McKenzie

Speaking in a Sibos session on European payments transformation, Fiona van Echelpoel told the audience: “We appreciate that banks understand the importance of the deadline and it’s not just the migration to ISO 20022, but there’s also the Target consolidation project, which will bring improved liquidity management. Everyone is interested in this and is working at full steam ahead.”

The payments industry is undergoing significant change, including migration to ISO 20022, the consolidation of the Target systems and the introduction of instant payment schemes. All of these elements were touched upon by the speakers.

Stephan Mueller, divisional board member transaction banking at Commerzbank, said he was unsure whether everyone in the industry understood the full impact of the migration to ISO 20022, not just by the Eurosystem but also by Swift. “There are many internal systems changes that have to be made by banks to be ISO 20022 ready. It is important that we have an honest discussion on where we are and the problems that the industry faces. Do we believe November 2021 is doable or not? That discussion will come over the next few months.”

Pierre Antoine Vacheron, executive director, payments at Natixis Payments, said the big bang introduction of ISO 20022 was a “real challenge for all of us” but is also a “big opportunity”. The standard will deliver greater interoperability and data rich messaging. “Migration requires a significant investment for everyone, but it will help us to remain competitive as technologies such as blockchain enter the market.”

Mueller said while internally and within the industry, such changes could be handled well, “as soon as we get merchants and third-party providers into it, it gets complex and we see delay in the market. We are not very good at interacting with the rest of the economy; we shouldn’t forget we are doing all of this for our customers.”