One year left until the TARGET2 migration – are you ready?

The time for change is less than twelve months away. On 21 November 2022, TARGET2 will switch from MT to MX, one year later than originally planned. According to the Bundesbank, the migration affects approximately 1220 participants, of which 955 are in co-management ( At the same time, the transition phase of SWIFT's ISO migration begins. After Switzerland and Japan, the TARGET2 (EUR) system is one of the next systems to be migrated to ISO 20022. In 2023, the UK and the US plan to follow suit, so they will certainly watch the implementation closely. 

The tight schedule of the consolidation, in addition to day-to-day business and other projects such as the ISO migration of SWIFT, will be a challenge for many financial institutions migrating their IT to MX. Time has passed quickly and the extra year was shaped by further preparations. The technical concepts have been written, the implementation and internal tests are in full swing.

Looking back

The connectivity tests were started at the beginning of September. E-ordering for the technical registration for the TARGET services was carried out with the respective network service provider (NSP): SWIFT or SIA. Some financial institutions were thus able to establish a U2A or A2A connection with ESMIG as early as the beginning of October. All participants are obliged to report their test results to the Bundesbank. This obligation also exists should the connection be established via a third party, for example through a SWIFT service bureau. All evidence had to be provided by 30 November. The connectivity tests to ESMIG had to be completed by 1 December.

Looking ahead

By implementing the remaining milestones in the coming months, the participants will be optimally prepared for the migration. However, this also means that from now on at the latest, staff should be assigned to testing with the highest priority to ensure that these final milestones are achieved.
The upcoming connectivity and community tests were further highlighted in the Bundesbank trainings in October and November. Once the form for master data creation is submitted, the Bundesbank automatically makes the necessary settings in the test system and creates user data.

The participant must then enter all master data once for the test system and then once again for the production system. No master data is transferred from the existing systems. The corresponding entries can therefore be internalised in the test system and the participants can familiarise themselves with the applications.

From the beginning of December, after the Bundesbank has created the first master data based on the form, the participant is obliged to create the other master data. This data makes up the basis for further "Mandatory Test Cases" that can be carried out from 1 January 2022. In November, an Information Guide for TARGET Participants was made available for "Operational Related Testing". In addition, self-defined tests can be performed for a total of 7 months to check the functionality of all TARGET2 services and their interaction.

An overview of key dates
  • The next milestone "Community Test" will start at the beginning of December and cover "Business Day Testing" (including T2S and TIPS) and "Operational Related Testing" (including ECONSII). 
  • In big bang migration year 2022 will see the "Migration Week Rehearsal" (MWR) from 28 March to 1 April. These tests will take place during the week and ensure that the master data has been configured correctly. The initialisation of balances on T2 will be checked. 
  • The "Migration Weekend Dress Rehearsals" (MWDR) will take place on 8 July, 23 September and optionally 15 October. These dates will be used to test additional functionalities during the weekend. The dates published by the Bundesbank for the MWR and MWDR are mandatory for all participants.

The Bundesbank also provides tutorials, i.e. videos for conducting the tests. For example, the different inputs of the U2A and A2A DNs were pointed out during the training sessions. The tutorial provides support and guides the participant through the entries step by step. For questions related to testing, the Bundesbank has also provided the e-mail address

Proof of testing for different "Mandatory Tests" should be sent collectively if possible. However, proof of individual tests can also be submitted later. If test cases cannot be carried out because they are not relevant for the financial institution, e.g. if the financial institution does not have an RTGS DCA, no test needs to be performed – in agreement with the Bundesbank. A written statement on the individual case must be provided to the Bundesbank.

The trainings have shown some of the complexity that needs to be implemented. It is no longer sufficient to give only a rough traffic light based assessment on the implementation status of the TARGET2 consolidation. Now proof of testing results is needed, which will make apparent who has succeeded in the technical implementation.

Between a quarter and a third of central banks, "Closely Monitored Participants" and "Regularly Monitored Participants" have so far reported the status yellow, meaning they foresee risks that could make their TARGET2 migration more difficult (, Although the participants' internal tests should be finished by the end of August, many participants are still only midway through the testing phase. It therefore seems difficult to define the individual milestones. All TARGET2 participants must take particular care now to ensure that they have met the requirements of the milestone by the time it is completed.

Authors: Viktoria Liehmann, Sabine Aigner


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