With the ISO 20022 standard now a prerequisite, organisations must convince their business leaders that the migration mandated for November 2025 is not just an IT project but rather requires a company-wide strategy.
That is one of the key messages from a report on mastering the transition to ISO 20022 published by Finextra and Unifits, which refers to the value of automated testing protocols while warning that third party or offshore outsourcing strategies often result in an even greater disconnect between business and technical teams.
The report authors acknowledge that decision makers could be forgiven for feeling disenchanted. Faced with a lack of resources or departmental know-how, increased complexity and regulatory deadline overlap, a compressed time-to-market and little in the way of validation offerings from the payment schemes, pressure to test is ratcheting up.
In the ISO 20022 world, new rails and opportunities are business-led and therefore demand considerable capacity from business and product owners, who must explain not just file format changes but also the inherent business rules and check the test responses.
In-house testing on a project-by-project basis can work, though it is resource intensive, prone to error and slow to market. Despite the cons, large swathes of the payments sector continue to work this way – using fragmented and incumbent structures to test for each scheme, solution, or regulation that lands.
While the business side often sees the value in such solutions, the IT department may prefer custom-built approaches or established test automation frameworks says Victor Neff, Accenture Senior Manager.
“Both approaches require integrating payment logic, which has long term implications as scheme updates need continuous incorporation,” he adds. “This is acceptable as long as all involved parties understand the benefits and drawback of custom-built solutions for payment test automation.”
He suggests tthat using solutions of a niche payment testing provider can bridge the gap between custom-built solutions and generic testing automation tools.
“These providers offer comprehensive payment test data and automation solutions, reducing the need for banks to develop these capabilities in-house,” says Neff. “This commoditisation of payment testing can save considerable time and resources. An industry testing solution is relatively easy to set up and integrate into the system landscape (taking only one to three weeks), whereas a custom built solution can take several months to develop.”
The key advantages of payment testing solutions from providers include pre-built test cases, automated payment message generation and user interfaces tailored for functional testers.
“Building a bridge between IT and the business department is one of our core tasks in supporting [payment implementation] projects,” says Christian Bruck, Partner, Financial Services at BearingPoint. “Given the current complexity and far-reaching effects of implementations on the entire process chain with their mutual interactions, the connection between business and IT is an essential component of successful project delivery.”
Advanced testing solutions streamline the testing process for faster issue detection and resolution. Such solutions handle increased workloads and replicate successful test strategies across systems and departments, providing clear evidence of compliance and facilitating external audits.
“Thorough testing also helps avoid regulatory breaches, preventing costly fines and legal issues,” says Bruck. “It simplifies comprehensive system testing, ensuring seamless component interaction.”
To benefit from automation, a clearing simulation must be available around-the-clock, which can be updated as needed by the vendor as opposed to the institution.
“Using simulated systems makes comprehensive testing more straightforward and effective without disrupting live operations,” says Bruck. “Successful implementation of ISO 20022 often requires not only changes to payment systems but also to booking systems and output management systems. Effective testing of these comprehensive changes necessitates accurate and automatically generated test data.”
