Project possible in cross-border payments

Have you ever tried to convince your international network of 11,000 participants to climb Mount Everest together? An impossible project, you say. To be honest, for most of us it would probably already fail on account of the network. But the Society for Worldwide Interbank Financial Telecommunication (SWIFT) has managed to build up a correspondingly large network since its foundation in 1973 and has started such a "project (im)possible" – except that the aim is not actually to climb Mount Everest, but to renew the messaging interface in international payments.

Showdown in November 2022

So if you look into the payments offices of global financial institutions these days, you will find this project (im)possible everywhere. Let me briefly summarise what it is all about:
SWIFT will change the current communication basis as of 2022. While MT transactions in accordance with ISO 15022 are currently used for communication in international payments, a migration to MX transactions will take place as of 2022. The MX transactions were defined by an international working group Cross-Border Payments and Reporting (CBPR+) and are based on the ISO 20022 standard. This is why we often speak of CBPR+ transactions or MX transactions. The scope includes the transaction formats from payments, reporting and investigation. In the "old MT world", this corresponds to the categories MT1xx, MT2xx and MT9xx.  

The new transactions are also sent via a new interface. The InterAct (FIN+) channel will be opened for payments as of November 2022. A complete changeover from the FIN to the InterAct (FIN+) channel is forced as of November 2025. SWIFT refers to the period between November 2022 and November 2025 as the "co-existence phase" and speaks of a "user-driven" migration. Each financial institution in the SWIFT network may decide for itself when to switch to outgoing MX. However, incoming MX messages must be expected as of November 2022.
A supposedly small migration project that has turned into one of the biggest challenges in payments in recent years. Old host systems, the processing of new data fields, the coordination with partner banks and the constantly changing conditions keep bringing new challenges and questions that need to be solved:
As a financial institution, when exactly should one make the switch? What happens to rich data elements? Should all sub-elements be saved or can we perhaps do without Garnishment Remittance after all? What exactly happens between November 2022 and November 2025? What is the minimum required in November 2022?
SWIFT has set November 2022 as the first possible go-live date. The first-mover banks still have three months to answer the last urgent questions, fix the last defects and inform the last customers. The first-mover banks, which SWIFT says account for more than 50% of the total cross-border transaction volume, are ready to go – and yet there are still changes and recommendations that may jeopardise a go-live.

Too late to turn back

The postponement of SWIFT's Transaction Manager to the end of Q1 2023 instead of November 2022 was one of the major shock moments. For a long time, the Transaction Manager was presented as the "redeeming SWIFT application" that was supposed to ensure a truncation-free transaction exchange across the entire payments chain by storing a so-called golden copy. Regardless of whether information-rich MX transactions or rudimentary MT transactions are sent or further processed, the Transaction Manager was to expand the transactions with the respective data variety originally sent and thus to ensure the consistent forwarding of all information. Now, with the delay, comes the fear that important information will be lost.
In order to get a grip on the problem, the PMPG (Payment Market Practice Group) published a recommendation in July to dispense with rich data by November 2023 ( The term rich data refers to the information that is newly provided with the MX transactions. A financial institution can rightly ask itself whether it makes sense to carry on with the project if such uncertainty continues to prevail.
But it is too late to turn back. The project budget has been allocated, the development teams are in the middle of development, the first releases have already been made, the internal go-live plan is in place, the communication campaigns are running hot and the project timeline for the next few months is already set. No matter how agile a financial institution wants to be, a migration project that occupies the entire bank, from e-banking to core processing to account reconciliation, cannot simply be stopped.

We have reached base camp – the ascent is yet to come

With regulatory and market-driven rigour, SWIFT is pushing its participants up Mount Everest and, as is usual on any hike, some are further ahead and some are slightly behind. What is certain is that a number of financial institutions will be sending MX transactions starting November 2022. But have they already reached the summit they were aiming for? If one takes a look at what has been achieved and the scope intended by SWIFT, one can only speak of reaching the base camp – the ascent itself is yet to come. Monitoring of production, additional operation efforts, conversion of reporting messages, conversion of investigation messages, processing of rich data elements and any changes and suggestions by SWIFT are likely to keep project (im)possible a fixed part of the project agenda at many financial institutions.
In conclusion, it must be said: the SWIFT community is currently transforming cross-border payments and, with the migration to ISO 20022, is building a basis that should improve and optimise payments in the long term. Even if the promised benefits of structured and granular data, higher data quality, better analysis options and international interoperability will not yet materialise in 2022 or 2023, the foundation for more is being laid. We can be curious about what else will happen in international payments in the next few years.
Where do you currently stand with your SWIFT MX migration project and how do you perceive the current situation? Let us know or leave a comment.

Author: Florian Stade


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