It’s up to the banks
The migration of MT to ISO20022 as a result of implementation of the new RTGS platform and the transition from EURO1 and STEP1 as of November 2021 is resulting in mandatory changes for banks that participate in these systems. They are being monitored closely by their central banks in respect of strategy and progress of implementation. Non-compliance is not an option: in that case, a bank will no longer be able to participate in these systems or settle Euro payment traffic as a so-called direct participant.
Admittedly, the improvements in liquidity management being facilitated by the new RTGS platform are not critical. More efficient automated processes for liquidity management and more efficient use of liquidity reserves can partly compensate for the cost of migrating to ISO20022. It could be attractive to tackle both areas of change together.
Many systems that need to be adapted because of the aforementioned changes are also being affected by the transition of correspondent banking to ISO20022. As it happens, SWIFT launched a public consultation with its members last year on migrating international payment traffic via the SWIFT network to the ISO20022 standard too, so-called MX messages. The proposal is to complete this migration in a number of phases within 5 to 6 years. It is logical to implement these changes now while they are not yet regarded as critical. It is important to monitor SWIFT’s plans in this regard closely anyway and to approach the strategy for all the changes required for migration as a cohesive whole.