The transition to ISO 20022 is a hot topic for corporate treasury and finance professionals. As an open, global standard, ISO 20022 offers enhanced payment data, enabling streamlined treasury processes, risk mitigation, cost reduction, and the potential for worldwide innovation, says Mark O’Toole, Head of Sales & Partnerships – Americas at Fides.

Just back from AFP 2024 in Nashville where he presented a panel on the importance of ISO 20022 for corporates alongside Alessandra Peter, Senior Treasury Manager at Autoneum Management AG and Russell Hoffman, Director of Treasury at Unibail-Rodamco-Westfield, O’Toole flags that whilst some companies are providing the correct formats and are already working with a treasury aggregator or building host-to-host connectivity directly with their bank, a knowledge gap exists.

Yet other treasury teams are scrambling to know what files they need or tags to include in the XML to get ISO-ready.

“It’s like chasing a train that’s already left the station,” he says, describing some of the last-minute preparation he is seeing underway.

Poll questions asked of the 250-person audience confirmed the mixed level of readiness, continues O’Toole. Polled on their preparedness to transition to the new messaging standard, respondents revealed a growing awareness of ISO 20022, but the responses also revealed most organisations are still in the early to middle stages of preparation.

Only 10% said they were very prepared and 12% said they were not aware of ISO 20022 at all.

Asked which benefits of ISO 20022 are most important to their organisation, respondents cited the importance of improved payment processing efficiency highest. Next came enhanced data quality and analytics and better regulatory compliance and reporting.

A question on the key challenges organisations face in adopting ISO 20022 for treasury operations found the biggest challenge lies in the technical work required to prepare for migration. Something O’Toole says highlights the need for proper planning, investment in technology, and access to specialised expertise.

The benefits of ISO 20022 are clear, he continues. For corporates, the move to this new format isn’t just about adopting a new standard — it’s about unlocking a wealth of opportunities to drive efficiency and transparency. This includes streamlined payment processing, better cash flow transparency, improved analytics and simplified compliance: Regulatory reporting becomes easier with enriched and standardised data, making compliance with local and international regulations easier.

Still, implementing ISO 20022 is not without its challenges. Integration with banks, TMS and ERP vendors and other financial systems can be complex, particularly as each financial institution and provider will have its own support timeline and approach to adoption.

“This is where a bank connectivity provider can make a significant difference,” says O’Toole.

Connectivity providers have experience in dealing with multiple banks and systems, enabling a smoother and more coordinated transition to ISO 20022. They can also help reduce the costs associated with bespoke integration projects and offer specialised knowledge in XML-based messaging formats.

“We can provide ongoing support post-migration, ensuring any issues or updates are handled efficiently without the need for in-house technical staff,” he says.

O’Toole continues that to ensure a successful migration to ISO 20022, it’s important to think through all the details that will be involved. Four key considerations to help corporates prepare include:

• Engage early: start conversations with your banks, third-party providers and internal stakeholders to align on timelines and requirements.

• Audit your data: assess the quality of your existing payment and reporting data to identify any potential gaps or inconsistencies.

• Create a project plan: develop a detailed project timeline that includes testing phases, training for staff, and contingency planning.

• Leverage expertise: consider partnering with a bank connectivity provider that can guide you through the process, from initial planning to post-migration support.