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ISO 20022 isn’t just another messaging standard. It’s a regulatory mandate reshaping cross-border and high-value payments. Beyond syntax, its power lies in structured, validated data that makes payments traceable, auditable, and compliant. The Core Data Elements Three data points sit at the heart of this shift: Legal Entity Identifiers (LEIs) Payment Purpose Codes (PoPs) Structured Addresses Failure to adopt them won’t just mean non-compliance. It will lead to failed payments, regulatory breaches, and costly investigations. 1. What is an LEI — and Why It Matters? The Legal Entity Identifier (LEI) is a unique, 20-character alphanumeric code that identifies legal entities in financial transactions. Introduced by the Global LEI Foundation , LEIs are now mandatory in CHAPS payments by May 2025 . Without an LEI, cross-border payments risk rejection at the clearing stage. Example Scenario A corporate sends a high-value GBP payment without including its LEI. The payment is flagged by the receiving bank’s AML filter. Result: delayed settlement, manual investigation, and reputational impact. 2. Payment Purpose Codes: Unlocking Compliance and Analytics Payment Purpose Codes (PoPs) classify why a transaction is taking place (salary, trade settlement, investment, tax, etc.). Why It Matters Regulators demand granular visibility to combat money laundering and fraud. Banks need analytics-ready data for reporting and monitoring. Corporates benefit from cleaner reconciliation and automated postings. Regulatory Milestone CHAPS mandates PoP codes by May 2025 , making them non-negotiable for corporates and banks alike. 3. Structured Addresses : From Unstructured Strings to Regulatory-Grade Data In today’s MT messages, addresses are often free-text fields. ISO 20022 requires structured, machine-readable addresses split into fields (Street, City, Postcode, Country). Why It Matters Eliminates data truncation (no more lost fields when converting MT to MX). Enables faster sanctions screening (matching against lists requires precise data). Improves fraud detection by linking accurate addresses to entities. Regulatory Milestone Structured Addresses become mandatory by November 2026 under CHAPS. ISO 20022 Readiness Checklists CHAPS May 2025 — LEI + Payment Purpose Codes ✅ Register for a Global LEI via GLEIF-accredited providers ✅ Update ERP and treasury systems to capture LEI fields ✅ Configure payment templates to include mandatory PoP codes ✅ Train staff to classify transactions accurately CHAPS November 2026 — Structured Addresses ✅ Audit all current payment files for unstructured addresses ✅ Update systems to map Street, City, Postcode, Country fields ✅ Validate addresses against regulatory lists (e.g., OFAC, HM Treasury) ✅ Test address truncation in legacy MT to MX conversions. The Time to Act is Now ISO 20022 isn’t a distant horizon. The deadlines are hardwired into May 2025 (LEI + PoP) and November 2026 (Structured Addresses). Banks and corporates who delay risk failed payments, increased manual intervention, and regulatory penalties . By preparing today, you not only ensure compliance but unlock data-driven benefits — from richer analytics to faster reconciliation. 👉 At Nth Exception , we help corporates and banks implement structured ISO 20022 data fields without friction. Conclusion: Embracing the Future of Payments The transition to ISO 20022 is not merely a compliance exercise; it is an opportunity to enhance operational efficiency and customer satisfaction. By adopting these structured data elements, organizations can streamline their payment processes and reduce the risk of errors. Take Action Today Start your journey towards compliance and operational excellence. Review your current systems and processes. Ensure that you are ready for the upcoming deadlines. The future of payments is structured, and the time to act is now.

Financial institutions face increasing pressure to modernize payment systems. The global shift towards a unified messaging standard is underway. This post explains the essentials of ISO 20022, its impact on financial transactions, and how to prepare for the transition. What is ISO 20022? An ISO 20022 Payments Guide ISO 20022 is a global standard for electronic data interchange between financial institutions. It defines a common language and model for payments, securities, trade services, and foreign exchange messaging. The standard uses XML syntax to structure data, enabling richer, more detailed information exchange. Key features include: Structured data : Enables precise, machine-readable payment details. Extensibility : Supports new business processes and regulatory requirements. Interoperability : Facilitates seamless communication across different systems and countries. Global adoption : Supported by SWIFT, central banks, and payment networks worldwide. For example, ISO 20022 messages can include detailed remittance information, improving reconciliation and compliance. This reduces manual intervention and errors. Data center supporting financial messaging infrastructure To learn more about the technical details and implementation, visit this ISO 20022 guide . Action: Review your current payment messaging formats and identify gaps against ISO 20022 requirements. Benefits of Adopting ISO 20022 in Payments Adopting ISO 20022 offers tangible benefits for banks, payment processors, and fintechs: Improved data quality : Richer, standardized data enhances transaction transparency. Enhanced compliance : Supports regulatory reporting and anti-money laundering (AML) efforts. Operational efficiency : Automates reconciliation and reduces exceptions. Future-proofing : Enables integration with Open Finance and real-time payment systems. Cross-border harmonization : Simplifies international payments with a common standard. For instance, structured remittance data helps compliance teams quickly identify suspicious transactions. Payment processors can automate exception handling, reducing operational costs. Financial analyst working on payment data analysis Action: Map your operational workflows to identify where richer payment data can improve efficiency and compliance. Why is SWIFT Moving to ISO 20022? SWIFT, the global interbank messaging network, is transitioning to ISO 20022 to modernize cross-border payments. The current MT message format is limited in data capacity and flexibility. ISO 20022 offers a scalable, data-rich alternative. Key reasons for SWIFT’s move: Data richness : Enables detailed payment and compliance information. Regulatory alignment : Meets evolving global regulatory requirements. Interoperability : Aligns with other payment systems adopting ISO 20022. Innovation enablement : Supports AI-driven analytics and real-time processing. SWIFT’s new standard, CBPR+ (Cross-Border Payments and Reporting Plus), is based on ISO 20022. It will become mandatory for cross-border payments by November 2025. Early adoption helps institutions avoid disruption and leverage new capabilities. Action: Develop a migration roadmap for SWIFT CBPR+ compliance, including system upgrades and staff training. Key Components of ISO 20022 Implementation Successful ISO 20022 adoption requires attention to several components: Message definitions : Understand the specific message types relevant to your business (e.g., payments initiation, status reports). Legal Entity Identifier (LEI) : Use LEIs to uniquely identify parties in transactions, improving transparency. Data mapping and transformation : Convert legacy message formats to ISO 20022 XML. System integration : Upgrade payment platforms and middleware to support new message formats. Testing and certification : Validate compliance with SWIFT and regulatory requirements. Change management : Train staff and update operational procedures. For example, banks must ensure their core banking systems can parse and generate ISO 20022 messages. Payment processors should automate data validation to reduce errors. Action: Conduct a gap analysis of your current infrastructure and plan phased upgrades aligned with ISO 20022 timelines. Leveraging ISO 20022 for Real-Time, Compliant Cross-Border Payments The transition to ISO 20022 is not just a compliance exercise. It opens opportunities to transform cross-border payments: Real-time processing : Structured data enables instant validation and settlement. AI-powered analytics : Rich data supports fraud detection and risk management. Open Finance integration : Facilitates data sharing across financial ecosystems. Regulatory reporting : Automates submission of detailed transaction reports. For instance, AI can analyze payment patterns using ISO 20022 data to flag anomalies faster. Open Finance initiatives can use standardized data to offer personalized financial services. Dashboard displaying real-time cross-border payment data Action: Explore AI and Open Finance tools that leverage ISO 20022 data to enhance your payment services. Adopting ISO 20022 is a strategic imperative. It enables banks and payment firms to meet evolving regulatory demands, improve operational efficiency, and innovate payment services. Start your ISO 20022 journey today to stay competitive and compliant in the rapidly evolving financial landscape.

Cross-border payments involve more than just transferring money from one country to another. They encompass making transactions safe, efficient, and compliant with international regulations. This process includes transferring critical payment data securely. To achieve this, several checks and procedures must be in place before, during, and after the payment moves through the financial system. Improvements in Cross-Border Payments Significant advancements have been made in cross-border payments over the years. Notably, SWIFT's Global Payment Initiative (gpi), launched in 2016, has significantly increased the speed, transparency, and reach of these transactions. However, challenges persist, particularly due to the use of different and incompatible data formats in cross-border payment messages. These issues often lead to communication problems between payment systems, resulting in data loss and the need for manual intervention. The Role of Standardized Data Formats and APIs To address these challenges, the adoption of standardized data formats such as ISO 20022 and the use of APIs are highly recommended. These standards have the potential to streamline, improve, and automate cross-border payment processes. Payments Market infrastructures worldwide are rapidly adopting ISO 20022 as a common messaging standard, highlighting the increasing importance of technology in the payments industry. The Future of Cross-Border Payments As the payments industry evolves, the integration of standardized data formats and advanced technologies will continue to play a crucial role. By enhancing the efficiency, safety, and compliance of cross-border payments, these innovations promise to transform the global financial landscape. Harmonized ISO 20022: A Key to Efficient Cross-Border Payments The Committee on Payments and Market Infrastructures (CPMI) has emphasized the importance of adopting a harmonized ISO 20022 version to improve cross-border payments. This common message format can lead to significant efficiency gains by eliminating the need for workarounds and translations between different systems. This reduction in implementation costs for new Payment Service Providers (PSPs) enhances the capability to achieve fully automated straight-through processing. Consequently, the financial industry becomes more open, cost-effective, faster, and continuously available. The Role of APIs and ISO 20022 in Modern Payment Systems Recognizing these benefits, new payment providers are increasingly using APIs and ISO 20022 to deliver their services to banks and established financial institutions. This approach allows for faster growth compared to directly signing up end-users. APIs enable payment providers to integrate seamlessly with various services, managing different steps of cross-border payments such as sanctions screening, anti-money laundering checks, account validation, and payment routing. Leveraging ISO 20022 and APIs for Enhanced Cross-Border Payments The Synergy of ISO 20022 and APIs When combined, ISO 20022 and APIs offer substantial benefits to payment service providers, fintech companies, banks, corporations, and technology providers. These technologies can: Provide Richer Data: By offering more context, they can send payments with itemized invoices, enhancing the clarity and detail of transactions. Reduce Data Loss: They minimize data loss when payments move between different systems. Increase Payment Visibility: Corporates gain greater visibility into their payments, knowing where funds are and when they will arrive, thus improving cash management. Streamline Compliance Checks: They simplify Anti-Money Laundering (AML) checks, sanctions screening, and Know Your Customer (KYC) processes. Optimize Service Use: Firms can use the best provider for each step in a modular way, rather than integrating all functions into a single complex system. Enhance Automation: They boost automatic payment processing, reducing the need for manual intervention when issues arise. In essence, the adoption of ISO 20022 and APIs is crucial for making cross-border payments faster, cheaper, and more transparent. ISO 20022 Industry Deadlines and Transitions Nth Exception: Your Partner in ISO 20022 Transition If your institution is planning to adopt ISO 20022, Nth Exception, a SWIFT partner, is here to assist. As a specialist consultancy and technology firm, we work with financial institutions globally to implement best-in-class payment solutions. Nucleus: Revolutionizing ISO 20022 Data Management Nucleus, an ISO 20022 Data Fabric, is purpose-built to help banks and financial institutions monetize ISO 20022. It leverages rich ISO 20022 messages categorized by domain, scheme, and message version, and federates this rich data to internal systems, enabling large-scale change and disruption. Out of the box, Nucleus enables institutions to comply with CBPR+ and HVPS+ structured data requirements. Key Features of Nucleus Internalize the ISO 20022 data language and definitions. Update systems to receive data as per ISO 20022 definitions. Capture payments metadata from payment messages. Extend rich contextual payments data to existing organizational systems that are not ISO 20022 native. Key Benefits of Nucleus Bridges the gap between legacy data platforms and ISO 20022. Designed for financial institutions to accelerate value extraction from ISO 20022. ISO 20022 native data store for pre- and post-translation messages: 10 years. Structured address enablement. LEI validation and creation. Automated purpose and remittance codes. Automated, independent truncation management. Advanced analytics. API native. Available on-premise and in the cloud. With Nucleus, your institution can seamlessly transition to ISO 20022, unlocking new efficiencies and capabilities in cross-border payments. Reference Documents - ISO 20022 and JSON: An Implementation Best Practices Whitepaper

Why Use Cases Matter in ISO 20022 Implementation ISO 20022 is often described as a regulatory mandate. However, in practice, it serves as a data strategy upgrade . By shifting from unstructured free text to machine-readable structured fields , firms unlock benefits that extend well beyond compliance. This shift intersects with the rise of Open Finance . APIs and data-sharing frameworks are expanding access to financial data across banks, fintechs, and corporates. ISO 20022 provides the standardized data backbone that allows Open Finance ecosystems to scale securely. Banks, corporates, and treasurers who adopt early gain more than regulatory approval. They achieve operational resilience, richer analytics, and faster decision-making in an interconnected Open Finance environment. Sharper Compliance Checking Structured data allows compliance systems to work as regulators expect: Sanctions Screening : Clear LEI (Legal Entity Identifier) and structured addresses reduce false positives by eliminating fuzzy matches. AML Monitoring : Purpose codes make it easier to detect suspicious patterns, such as large transfers flagged as “salary.” Cross-Border Transparency : Standardized remittance and party data align with FATF (Financial Action Task Force) Travel Rule expectations. With ISO 20022, compliance checks shift from manual detective work to automated, accurate filtering . This transition is critical as Open Finance broadens the number of institutions exchanging data. Treasury Reporting, Reimagined Corporate treasurers often struggle with fragmented, truncated payment data. ISO 20022 structured fields bring consistency: Consolidated Dashboards : Banks and corporates can roll up cash positions across multiple geographies. FX Exposure Tracking : Enriched remittance data improves visibility on currency conversion rates. Automated Reconciliation : Structured remittance information links directly to invoices and ERP (Enterprise Resource Planning) systems. In the Open Finance era, treasurers can combine ISO 20022-compliant payment data with multi-bank APIs, credit bureau data, and even alternative financial data sources . This makes dashboards more than just internal reporting tools. They become 360° liquidity and risk management hubs . Result Treasurers move from spreadsheet firefighting to real-time liquidity orchestration . From Unstructured to Insight-Driven Dashboards A side-by-side comparison illustrates the shift: Before (Unstructured Data) Free-text payment reference Missing or truncated counterparty details High reconciliation costs After (Structured ISO 20022 Data) Unique identifiers (LEI, IBAN, PoP) Complete, machine-readable address fields Automated posting in ERP and treasury systems Seamless integration with Open Finance APIs for richer reporting The leap is not cosmetic. It represents the difference between manual reconciliation cycles and straight-through, API-powered reporting . Usage of Structured Data Checklist: Unlocking the Benefits To realize these benefits, firms should: Validate structured addresses against external sources (postal, regulatory). Embed LEI and PoP capture in payment templates and ERP flows. Integrate treasury dashboards with ISO 20022-compliant middleware. Leverage Open Finance APIs to enrich ISO 20022 payment data with external datasets. Use enriched remittance fields for automated invoice matching. Nth Exception’s Perspective At Nth Exception , we view structured data as the foundation for next-generation banking intelligence . When combined with Open Finance, the opportunity expands even further: Compliance Edge : Faster, more accurate sanctions and AML checks across multiple institutions. Operational Edge : Reduced reconciliation costs and fewer payment failures, even in cross-bank workflows. Strategic Edge : Treasury dashboards enriched with Open Finance data, delivering insight, not just reporting. Our Nucleus ISO 20022 Data Fabric ensures firms capture and structure payment data correctly. This turns regulatory mandates and Open Finance connectivity into business opportunities . ISO 20022 is not just about passing compliance checks. It is about unlocking the business value of structured data , amplified in an Open Finance ecosystem. Compliance teams gain accuracy. Treasurers gain visibility. Executives gain actionable insights. 👉 The winners in 2025–2026 will be those who treat ISO 20022 not as a cost of compliance, but as a platform for smarter financial operations and Open Finance innovation . Conclusion In conclusion, the transition to ISO 20022 is more than a regulatory requirement. It is a strategic move that empowers firms to leverage structured data for enhanced operational efficiency and compliance. By embracing this change, organizations can position themselves for success in an increasingly interconnected financial landscape. Take Action : Start your journey towards ISO 20022 compliance today. Evaluate your current systems and identify areas for improvement. Embrace the future of finance with structured data and Open Finance capabilities.

ISO 20022 migration is no longer just a messaging upgrade. It is a governance and audit event. With supervisory attention increasing across the UK, EU, U.S., and APAC, financial institutions that treat ISO 20022 purely as a technology project risk falling short when regulators begin testing for operational resilience, data integrity, and audit readiness. As adoption accelerates— LEIs and Purpose Codes mandated by May 2025, U.S. Fedwire cut-over in July 2025, Structured Addresses required by November 2026 —banks must strengthen governance frameworks today. The Governance Imperative ISO 20022 embeds structured, high-integrity data  into payments and reporting. This is an opportunity—but also an accountability challenge. Regulators will expect controls across three dimensions: Data Integrity Mandatory fields (LEIs, Purpose of Payment, Structured Addresses) must be populated, validated, and consistently applied. Missing or truncated data is no longer “technical debt”—it is an audit finding. Process Controls Payment flows must include segregation of duties, four-eye validations, and automated exception handling. As ISO 20022 enables richer data, the risk of manipulation also increases, making governance guardrails essential. Auditability Every enrichment, validation, or transformation step must leave a trace. Supervisors and internal auditors will expect replayable logs and transparent dashboards. Without a governance lens , ISO 20022 becomes a liability rather than an enabler. In one European bank, ISO 20022 pilot runs revealed that 18% of outgoing payments carried incomplete purpose codes. Once governance controls were introduced (validation + structured dashboards), the error rate dropped below 2%—preventing costly rejections and regulatory flags. Governance failures show up in four critical ways: Truncation Risks  — Unstructured addresses or missing LEIs lead to data loss and compliance flags, undermining straight-through processing. Access Risks  — Weak segregation of duties (e.g., the same individual enriching and approving payments) creates fraud and integrity exposures. Compliance Risks  — Empty Purpose of Payment codes or incomplete regulatory fields trigger rejections, penalties, and reputational harm. Audit Gaps  — Without replayable logs or dashboards, institutions cannot evidence controls when supervisors request proof. Supervisors across the UK, EU, and APAC  have already signaled that ISO 20022 is not just a messaging issue—it is a regulatory reporting and governance priority . Checklist for Governance & Audit Readiness Governance Framework Define ownership of ISO 20022 compliance (Payments Ops, Risk, Compliance). Document policies for LEI, PoP, and structured address data entry. Create escalation procedures for failed or rejected messages. Internal Controls Implement segregation of duties  for message preparation vs approval. Introduce four-eye validation  for enriched ISO 20022 fields. Monitor truncation risks with automated checks (pre-submission validation). Audit Preparedness Maintain audit trails  for all ISO 20022 message edits (who, when, what). Conduct dry-run audits  aligned with CHAPS 2025 and 2026 deadlines. Benchmark against global audit standards  (FCA, ECB, MAS expectations). Strategic Upside Beyond Compliance Strong ISO 20022 governance is not just defensive. It creates upside: Operational Resilience  – fewer rejections, faster investigations. Regulatory Trust  – positive posture during supervisory audits. Efficiency  – reduced manual exception handling. Competitive Advantage  – cleaner data enables advanced analytics, FX monetization, and fraud detection. In short, compliance is the baseline; governance maturity unlocks revenue. Corporates selecting banking partners for cross-border flows increasingly ask: “Does your bank meet ISO 20022 structured data requirements?” Nth Exception’s Approach At Nth Exception , our Nucleus ISO 20022 Data Fabric  is engineered to embed governance into every stage. Audit-ready trails for all message edits and enrichments. Validation checks against ISO schemas and local market practice rules. Governance dashboards for compliance teams and auditors. Modular integration with core banking and middleware systems (Fiorano, Trace, Swift TM). This ensures institutions can move from checkbox compliance  to resilient governance . Timeline at a Glance Are you audit-ready for 2025? Don’t wait for regulators to define the benchmark. Take control now. 👉 Book a Governance Readiness Assessment  with our experts.

The ISO 20022 future of payments  is not just about replacing one message format with another. It represents a foundational shift in how payment data is structured, exchanged, and leveraged across the financial ecosystem. By embedding rich, structured fields into every transaction, ISO 20022 enables faster processing, better compliance, and entirely new business models. From Translation to Transformation Many institutions still treat ISO 20022 as a translation exercise—converting MT messages to MX without improving upstream data quality. This approach limits the benefits. The real transformation happens when financial institutions natively adopt ISO 20022 , enabling: Real-time settlement  with fewer manual interventions. Interoperability  across domestic and cross-border payment systems. Smarter routing  based on transaction context, cost, and speed. Richer Data = Smarter Decisions With fields for structured addresses, legal entity identifiers (LEIs), and payment purpose codes, ISO 20022 creates a single source of truth for payment metadata. This allows: Faster and more accurate sanctions screening. Automated compliance with FATF Travel Rule and local regulations. Precision in fraud detection through anomaly detection models. ISO 20022 in Real-Time Payments & APIs As instant payment schemes grow—FedNow (US), AANI (UAE), SEPA Instant (EU)—ISO 20022’s compatibility with API-based integrations  becomes critical. Banks can provide real-time transaction insights  to clients, enabling: Live liquidity forecasting for treasury teams. On-demand FX rate application at the point of payment. Embedded finance opportunities for corporate clients. The Operational Reconciliation Challenge Any TMS (Treasury Management System) morning starts with updating and reconciling the cash positions across accounts by a daily upload of electronic bank statements (MT 940, MT 942, etc.). This financial reconciliation focuses on balances and net credit/debit movements, helping treasurers build a picture of liquidity, dealing capital, and other daily requirements. By contrast, ERP systems have to operationally reconcile —requiring more detailed information such as transaction references, remitter identification, and remittance data delivered by payment networks and banks. Traditionally, this operational reconciliation is conducted separately for debits and credits on a statement: Debits  from controlled payment runs can often be matched against ERP records with relative ease. Credits —incoming payments or cheques—are more challenging. Additional remittance data may arrive separately (e.g., free-format MT 199) and at different times than the statement itself. Achieving a 3-way match  between statement credit entries, remittance information, and open invoices is labour-intensive and time-consuming. In many cases, it requires advanced auto-reconciliation technologies, which bring their own set of challenges. This is where ISO 20022’s Structured Remittance Information (SRI)  becomes a game-changer—allowing end-to-end delivery of reconciliation data within the payment message itself, reducing the dependency on separate channels and manual matching. The key challenges with the operational account reconciliation for a bank or corporate treasury process fall into four main categories: Can ISO 20022 Solve These Challenges? ISO 20022 brings significant potential to cross-border payments, cash management, and global trade —particularly because of the vast amount of structured transactional and remittance data exchanged between parties, often integrating with both ERP  and Treasury Management Systems (TMS)  at each end. With over 400 message types  covering every aspect of banking and financial services, ISO 20022 messages are grouped into business domains such as: Trade Services (tsrv) Cash Management (camt) Securities Trade (setr) Payments Initiation (pain) These messages do more than define format—they standardize usage guidelines and business process flows  between participants, ensuring clarity across the value chain. The Power of CAMT.053 Among these standards, camt.053  plays a critical role in solving many reconciliation and reporting challenges. It is sent by the account servicer to the account owner (or an authorized party) to provide: Entries booked to the account. Balance information at a given point in time. Support for end-of-cycle statement reporting (daily, weekly, monthly, or yearly). With 1,500+ data fields , camt.053 provides richer, more structured details than legacy MT formats—unlocking three key benefits: 1. Enhanced Data for Straight-Through Processing (STP) Transaction details are mapped to specific XML tags, reducing manual reconciliation exceptions and helping meet daily and month-end deadlines. End-to-End Identification (E2E)  fields (e.g., invoice references, shipping dates) improve auto-match rates at both ends. Transaction fees can be mapped to the deducting party for precise internal accounting adjustments. For cross-border payments, details such as counter currency code, original amount, spot FX rate, and FX contract number  allow automatic calculation of realized FX gain/loss—eliminating manual effort. 2. Enhanced Risk & Compliance Structured data improves watchlist screening and AML checks. Standardized compliance fields (e.g., Legal Entity Identifier (LEI) , merchant IDs) strengthen regulatory reporting. 3. Enhanced Structure for Better Reporting Detailed opening/closing ledger balances and transaction summaries. Statement Pagination  and Electronic Sequence Numbers  for easy file ordering. Duplicate indicators to identify additional statements. Reporting source fields for account/department tagging. Understanding the CAMT Family camt.052 – Bank to Customer Account Report:  Intraday reporting (replacing MT942), offering near real-time account visibility. camt.053 – Bank to Customer Statement:  Previous-day statements (replacing MT940) with detailed transaction data. camt.054 – Bank to Customer Debit/Credit Notification:  Replaces MT900/MT910, giving debit or credit confirmations for specific transactions. MT vs. CAMT – Choosing the Right Format Arguments for CAMT.053: Separate fields for full reference and description, aiding automated reconciliation. Full details of batch payments (total + individual transactions). Consolidated feedback in a single XML file, simplifying processes and reducing maintenance. Arguments for Retaining MT940: Batch-level details are sufficient. Systems cannot process large XML data volumes. MT940 delivery timelines better suit internal processes. Opportunities Beyond Reconciliation Expanding ISO 20022’s use across the financial supply chain  unlocks value in payment processing, compliance automation, liquidity management, and FX optimization. Summing Up Payments standardization is not just compliance—it’s an opportunity to: Streamline reconciliation. Reduce operational risk. Improve client reporting. Enhance interoperability across markets. However: The coexistence period will require handling both old and new formats. ERP/TMS systems may need upgrades—or middleware can bridge the gap. ISO 20022 is a journey, not a destination.  Institutions should work closely with technology partners to assess readiness, define an implementation roadmap, and capture the competitive advantages early movers will enjoy. Our Expertise Nth Exception is a SWIFT partner  and ISO 20022 specialist, helping financial institutions and corporates: Navigate complex messaging standards and scheme requirements. Improve reconciliation, compliance, and operational efficiency. Deliver next-generation payment processing capabilities. We combine deep payments expertise  with technology integration skills —from structured data optimization to advanced analytics—to help you turn ISO 20022 adoption into a measurable competitive advantage. Speak to us

Financial institutions face complex challenges managing ISO 20022 compliance, data governance, and analytics. Nucleus on IBM solves this by delivering real-time structured data analytics and scheme-level governance—empowering banks and PSPs with accurate, auditable insight into payments flows and exceptions. Banks globally are in the process of complying with the ISO 20022 deadlines primarily because, after forty years, SWIFT MT is beginning to show its age. SWIFT MT was designed at a time when storage and bandwidth cost more than they do today, so emphasizes brevity over completeness or readability of data. It predates the emergence of anti-terrorist financing regulations, which require payments to be screened against sanctions lists, and the development of ‘big data’ technology, which can extract meaningful business intelligence from transaction data. Earlier this year, we introduced  Nucleus  to the banking community, it taps into the computing power and resources of the IBM z Systems and IBM LinuxONE platform to help drive business transformation and govern critical Governance, Risks and Compliance aspects of ISO 20022 migration. Key highlights of the cloud-native Nucleus platform include: ✓ ISO 20022 messages are stored in a native ISO 20022 & JSON format. ✓ Long-term, permanent, internal archive (7 years) of MX and MT message pairs. ✓ Real-time, always-available access for operational and compliance teams to search, query and report from this archive, across MT and MX message sets. ✓ Transparency and opportunities for automation and machine learning, on MX data. IBM LinuxONE Emperor 4 was launched globally on September 13, 2022, enabling our clients to reduce energy consumption while reaching sustainability targets. We as IBM partners are helping clients in regulated industries build a modern environment that is designed to improve business agility and reduce overall costs. Hybrid cloud approach provides flexibility for the financial services industry Nucleus enables banks and financial institutions to comprehensively enforce ISO 20022 related payments governance through detailed tracking of scheme and message level implementations, mitigating the risk of data loss & truncation as messages pass through multiple channels, thereby complying with the requirements of regulators. Banks and financial institutions can also track the reasons for truncation and aim to resolve the same during migration journeys.  IBM’s hybrid cloud approach on IBM z Systems and IBM LinuxONE with Red Hat® OpenShift® allows businesses the flexibility to decide where to deploy workloads, on-premises, on private or public cloud. IBM LinuxONE Emperor 4  According to an  IBM IBV study , almost half (48 per cent) of CEOs surveyed across industries say increasing sustainability is one of the highest priorities for their organization in the next two to three years. However, more than half (51%) also cite sustainability as among their greatest challenges in the next two to three years, with a lack of data insights, unclear ROI, and technology barriers, as hurdles.  The new IBM LinuxONE Emperor 4 is an enterprise server designed to help reduce energy consumption. Consolidating Linux workloads on five IBM LinuxONE Emperor 4 systems instead of running them on compared x86 servers under similar conditions can reduce energy consumption by 75%, space by 50 per cent, and the CO2e footprint by over 850 metric tons annually.[1] Integrations with energy monitoring tools on the server also enable clients to track energy consumption  Built on the IBM Telum Processor, IBM LinuxONE Emperor 4 is a Linux platform that supports data serving, core banking and digital assets workloads. IBM LinuxONE Emperor 4 is a platform of choice for organizations that value sustainability and security.   Ecosystem Partners with IBM As a part of the IBM Ecosystem, Nth Exception is helping companies unlock the value of cloud investments by implementing the tools and technologies that can help them succeed in a hybrid multi-cloud world. We are excited to be working closely with the IBM ecosystem to bring new innovations to our clients.  Based on Linux, customers can benefit from open standards and an ecosystem that LinuxONE offers including modern DevOps and a variety of popular software. This can also help to remove operational barriers when customers deploy and manage technologies on cloud-native infrastructure.   You can find additional resources about IBM LinuxONE Emperor 4 and IBM below: ●      Learn more about  LinuxONE ●      Learn more about  Nth Exception's Nucleus ●      Learn more about  IBM [1] Disclaimer: Compared 5 IBM z16 Max 125 model consists of three CPC drawers containing 125 configurable cores (CPs, zIIPs, or IFLs) and two I/O drawers to support both network and external storage versus 192 x86 systems with a total of 10364 cores. IBM z16 power consumption was based on inputs to the IBM z16 IBM Power Estimation Tool for a memo configuration. x86 power consumption was based on March 2022 IDC QPI power values for 7 Cascade Lake and 5 Ice Lake server models, with 32 to 112 cores per server. All compared x86 servers were 2 or 4 socket servers. IBM Z and x86 are running 24x7x365 with production and non-production workloads. Savings assumes a Power Usage Effectiveness (PUE) ratio of 1.57 to calculate additional power for data centre cooling. PUE is based on Uptime Institute 2021 Global Data Center Survey ( https://uptimeinstitute.com/about-ui/press-releases/uptime-institute-11th-annual-global-data-center-survey ). Due to the technical equivalence, the results are also valid for LinuxONE Emperor 4 Max 125 systems.

ISO 20022 is reshaping payment investigations. With structured messaging, financial institutions can cut investigation cycles from days to near real-time, while improving accuracy and consistency in exception handling. In an average payments operations department, two to five per cent of all payments, are made on any particular day, resulting in an enquiry with value going up to billions of USD. To improve the competitive position of their cash management offerings, financial institutions are putting increasing pressure on their payment operations. While many processing units achieve impressive straight-through processing (STP) rates, it has become clear that the cost of handling each enquiry resulting from payment is multiplied by the total payment cost.  Managing exceptions and investigations remains one of the most labour-intensive activities for a financial institution, largely because it blocks increased automation. The reason for this is the widespread use of free-format messages combined with a lack of industry rules. And as these are primarily manual processes, in a best-case scenario, exceptions can consume a minimum of 6 working days to resolve.  In response to increasing regulatory and competitive pressure, financial institutions are looking at implementing activity-based pricing and invoicing their payment services separately from the processing. This approach is designed to generate additional revenue. However, it requires a high level of service, supported by standardised customer reporting.  With the migration of ISO 20022, Exceptions and Investigations (E&I) will be redefined.  The fact remains, that improving customer service levels through the fast and efficient resolution of problems is a key differentiating factor for customer retention.  Understanding exceptions and investigations A case is created each time an exception and investigation process is needed. A case is a file that records the progress of the investigation. This file can be paper-based (a physical folder) or electronic (a database table). As the process is internal, the party creates and organises a case file in its own way. The assignment of this case and the exchange of messages between collaborating parties must respect a set of rules, and these steps can either be manual or automated.   An exception or investigation process starts when a problem occurs in the normal execution of a payment transaction.  The exception is typically related to problems detected with the processing environment of the case creator, whereas an investigation is related to an issue identified in the payment chain that will lead to the failure of the processing.  The problem can be one of the following:  - Payment needs to be cancelled due to a processing error or a decision by the party instructing the payment  - Payment must be modified due to a processing error or a decision by the party instructing the payment  - Payment is received but it is incorrect  - Payment is received but some information is missing, preventing its proper processing  - An expected payment is not received  - An entry in the statement cannot be reconciled with the initiating party  Exception and Investigation processes are covered under 4 standards.  Claim Non-Receipt  A claim-non-receipt message is sent when a party that expects a payment does not receive it or when an agent is missing the cover for received payment instruction.  Unable to Apply  An unable-to-apply message is sent when insufficient or incorrect information prevents the processing of a payment instruction, for example, the account number is missing or incorrect, the account is closed, the name and account do not match or the final agent is missing. Processing of a payment instruction covers both the execution of the instruction and the reconciliation of the instruction.  Request for Cancellation The instructing party requests the cancellation of a payment instruction.  Request for Modification  The instructing party may request a modification of a payment instruction. It can eventually entail an Additional Payment Information message that may be sent by the account servicing institution to the creditor or beneficiary.  We are committed towards client-centric payment services and leading the path for other global payments innovation (gpi) initiatives.  Nth Exception  is a specialist payments technology and consulting firm assisting financial institutions and corporates introduce, operationalise and process-optimize next-generation payments journeys and systems. Specialists in SWIFT messaging, ISO 20022 and alternative payment methods, we work with customer organizations globally, helping them navigate around complex messaging standards and the detailed requirements of different schemes and market infrastructures, enabling them to better manage uncertainty, improve business connectivity and continuity, reduce operational costs and eliminate barriers to profit, in the fast-changing payments world. Speak to us

SWIFT CBPR+ structured postal addresses are more than a formatting requirement — they are a critical element of ISO 20022 compliance. As the global migration accelerates, banks, PSPs, and corporates must replace unstructured or hybrid address formats with fully structured data to improve sanctions screening, reduce false positives, and ensure end-to-end interoperability. This guide explains what structured postal addresses are, why they matter, and how to implement them in your SWIFT CBPR+ environment.. Banks must prepare for ISO 20022 compliance, even if they do not actively use hybrid addresses. You must be able to accept hybrid address formats from other financial institutions and offer customers the ability to send them. This requires updating customer-facing systems to collect, process, and validate hybrid addresses across multiple banking channels, including: File-based bulk payments for corporate banking Fraud and sanctions screening APIs and Open Banking integrations Online and mobile banking Customer support platforms Impact Analysis: What Systems Will Be Affected? The transition to hybrid addresses impacts multiple components of your payment infrastructure. Key areas to assess include: Customer-Facing Systems : Ensure seamless client onboarding and smooth transaction processing. Enterprise Resource Planning (ERP) & Treasury Management Systems (TMS) : These systems typically store customer data in unstructured formats, requiring upgrades to support hybrid addresses. Back-Office Payment Processing : Payment engines, core banking systems, and compliance solutions must be adapted to accommodate hybrid validation rules. Risk & Compliance : Fraud detection, sanctions screening, and regulatory reporting mechanisms need to align with new address standards. Assessing & Updating Your Systems ERP & TMS Limitations : Most ERP and treasury management systems rely on unstructured address fields, necessitating updates to support hybrid or structured formats. Validation Rule Adjustments : If your current validation settings only allow structured or unstructured addresses, they must be reconfigured to support hybrid formats. Compliance & Processing Updates : Transactions from correspondent banks and clearing houses must meet updated compliance requirements. The Challenge of Updating Customer Data Migrating existing client addresses to a hybrid or fully structured format is an immense task. Altering customer data could disrupt key postal processes, including checkbook and statement deliveries. Therefore, a strategic, phased approach is necessary. Nucleus Download Our White Paper for Expert Guidance Our white paper, " The Role of Structured Postal Addresses in ISO 20022 ,"  provides actionable insights to simplify your transition. Inside, you will learn: ✅  Why Structured Postal Addresses Matter : Improve transaction accuracy, enhance regulatory compliance, and mitigate financial risks. ✅  Hybrid Addresses : A practical approach that balances current banking practices with future industry requirements. ✅  Key Deadlines : Prepare for the critical compliance milestone in November 2026. ✅  Machine Learning Solutions : Learn how Nucleus ISO 20022 Data Fabric  can automate and streamline your migration process.

Data is an increasingly important part of the payment industry. It is collected, analyzed, and used at various points during a payment transaction, and plays a vital role in making sure the payment reaches its intended destination. Data is also at the core of customer security and system innovations.   The payments sector is fast evolving, and we expect data will play a key role in this evolution. Changes in the sector are being driven by a variety of market, technological, end-user, and regulatory factors that have data at their core.  Technological changes: Technological change is leading to payment data being collected, processed, shared, and used in digital form at lower costs and on a larger scale. The ability to access increasing amounts of data offers potential market opportunities such as business models based on collecting and processing data. This is all driven by increasing computing power, affordable storage, and software that can analyze large data sets to gain new insights. Digitization (i.e. capturing, storing, and using increasing amounts of digital information) has transformed the sector, the obvious impact of digitization in the payments sector is the increase in the type and amount of data that PSPs, PSOs, and third parties collect. Organizations such as regulators, central banks, and government departments are following the same trend.  As more people and businesses shift from cash to digital payment methods, the rapid digitization of the payments sector is expected to continue. And as the costs of collecting, storing, and analyzing data decrease over time, data could be collected and analyzed on an ever-larger scale. End-users: The people and organizations that use payment systems – are also changing the ways they pay for goods and services, with an increasing reliance on non-cash methods. These all generate payment data. And as the volume of electronic payments has increased, so has the volume of data. Regulatory Developments:   A number of regulatory and policy developments affect how data is collected, processed, and used in the payments sector.  These include:  - The Open Banking Standards Initiative was introduced following the CMA’s retail banking market investigation. - The second European Payment Services Directive (PSD2) - The GDPR and the Data Protection Act 2018 Market opportunities created by data: Organizations are interested in how they can use digital technologies and data to create revenue and improve business processes. This is generally known as digitalization.  In the payments sector, existing providers, as well as fintechs, are developing business ideas that rely on payments data as a critical input. For example, Google Pay collects data (e.g. transaction and account data) from users to facilitate the provision of advertising. In turn, advertising helps to keep the service free for users. Few PSPs use payment data to provide insights into their customers’ spending habits. What Is Payments Data? In providing payment services to customers, PSPs, and other entities (such as third party providers or AISPs) can capture and hold a range of information about their retail and corporate customers. Payments data can be collected through the use of core payment services such as:  - Debit and credit transfers - Card payments - Mobile payments   - Digital wallet payments - Cheques - ATM transactions Types of information that can be collected through end-user use of these payment services include: - Personal or identity details of the payers such as their names, telephone numbers, and email addresses - Sort codes and account numbers for the payers and the payees - Reference information for the payment - Date and time of the payment   - Primary Authorization Numbers (PAN) for card transactions In providing payment services, PSPs and other payment entities can also capture additional information that is not always necessary to process the payment. It includes: - The location where the payment was made. - Information regarding the channel through which the payment was made. - Specific information regarding the devices through which the payment was made (for example, mobile device identification numbers, IP addresses, and cookies for online payments). - Usage data such as the frequency with which consumers log on to their online/ mobile banking or payments accounts. Payments Data as a whole can be primarily classified into two important classificatory distinctions: The identifiability of the data subject (and the distinction between personal and non-personal data), and the degree of aggregation of the data (and the distinction between individual and global transaction data).  Role Of Payments Data In Emerging Technologies: Financial services are driven by data. The way data is leveraged has an unimaginable impact on the bottom line and customer satisfaction.  In the context of payments, a large majority of international payments are processed straight through, requiring no manual intervention. However, the small proportion of payments that require manual processing often does so due to incomplete or inaccurate data relating to the end beneficiary. The ensuing inquiries and delays can take a disproportionate amount of time and resources to resolve. SWIFT is working to eliminate these to provide a better customer experience by providing the financial community with smarter tools like the gpi that improve the quality of the underlying workflow.  Improving the quality of the data enables the industry to drive value more easily from emerging technologies like Artificial Intelligence (AI) and DLT, further driving automation and preventing the illicit use of the global financial system.  This is already taking shape in the compliance space, for example, where advanced data analytics capabilities are enabling banks to improve their screening algorithms and reduce the number of false positives when trying to detect fraud. Despite expected benefits and the abundance of available technological advancements applicable to various elements of the value chain and operations in the financial services and insurance industries, institutions are yet to fully harness the potential of AI. The main reason for that is the complexities of organizing data that feeds intelligent machines. More Data, More Structure, Richer Insights  International payments often contain unstructured and ambiguous beneficiary account data, causing unnecessary delays and delayed processing. To remedy this, we need to capture richer data in a more structured way. This transformation is already ongoing, with the widespread adoption of ISO 20022 across major market infrastructures around the world and the industry-wide move to the new standard within the payments space. ISO 20022 provides rich and structured data that is suited to the needs of regulators, market overseers, and reporting firms that rely on unambiguous data for meaningful analysis. Increased use of mandatory and structured data will further enable the automation of reconciliation processes and greatly improve the visibility of cash positions for beneficiaries. The standard also provides a common data dictionary, agnostic of syntax, and technology choice. This will support new services through the use of APIs, and provide quality data for the application of artificial intelligence, enabling banks to offer innovative services to meet their clients’ changing needs. Nucleus ISO 20022 Data Hub is a revolutionary solution for financial institutions and corporates looking to implement a low-cost and data-centric approach to message enrichment. With its ability to store data in the ISO 20022 native format, Nucleus empowers organizations to embrace the new standard and unlock the full value of payment data. By providing access to richer intelligence, Nucleus enables increased transparency, automation, and the development of new services. This is not only beneficial for compliance purposes but also for driving growth and efficiency across the global economy. Nucleus is the ideal foundational data platform for payments transformation, with seamless integration with IBM Watson, Azure Applied AI, and AWS Sagemaker services. Its inbuilt translator allows for an easy federation of data to legacy platforms, bridging the gap between non-ISO 20022 environments and the new standard. With Nucleus, financial institutions can accelerate value extraction from ISO 20022 and stay ahead of the curve in the rapidly evolving payments landscape.  Nth Exception  is a specialist payments technology and consulting firm assisting financial institutions and corporates introduce, operationalise and process-optimize next-generation payments journeys and systems. Specialists in SWIFT messaging, ISO 20022 and alternative payment methods, we work with customer organizations globally, helping them navigate around complex messaging standards and the detailed requirements of different schemes and market infrastructures, enabling them to better manage uncertainty, improve business connectivity and continuity, reduce operational costs and eliminate barriers to profit, in the fast-changing payments world. Speak to us Image source - respective owners.

The reconciliation process is a challenge for Corporates today, as legacy message formats often do not provide data that can automatically reconcile incoming payments with outstanding invoices for goods previously delivered or services already provided to their customers.  With ISO 20022’s rich data and structure that can carry invoice information, Corporates can benefit from easier reconciliation of outgoing and incoming payments, saving time and resources while also maintaining accuracy. Enterprise Resource Planning (‘ERP’) systems that are ISO 20022 compliant will make short work of reconciling bank statements to accounts receivable or payable.  Because ISO 20022 provides consistent standards for messages across the payment chain, from payment initiation to cash reporting, reconciliation of incoming payments and outstanding invoices by ERP systems can be automated, combining what would otherwise be multiple steps into a single unified process.  Automated reconciliation of incoming payments with outstanding invoices can potentially enable Corporates to reduce their ‘days sales outstanding’ ratio by allowing for faster conversion of receivables to cash. Because Corporates cannot use incoming cash until it is reconciled, faster reconciliation also means cash can more quickly be used to further business objectives.  Ultimately, a streamlined reconciliation process will allow Corporates to spend additional time on revenue-generating efforts while ensuring that cash and receivables records are also in order.  While most corporate professionals focus more on commercial activities than the underlying payments, a ‘bad’ payment can ruin a commercial experience. As technology develops, payments have become more closely aligned with the underlying commercial activities. This includes embedding payment methods with clients’ ERP systems through APIs, and e-commerce platforms and leveraging wallets to create seamless online purchasing experiences.  However, when looking at the payment market infrastructures to which banks are connected, there are stark differences between payment systems and market practices from country to country. Supporting a seamless cross-border payment experience is a highly challenging task. The information required for payments differs by country and by market infrastructure, which is part of the reason why payments rarely move freely from one country to another.  Traditionally, banks have had to re-format the data exchanged with customers to fit the requirements of each local infrastructure, and then re-format the data back into SWIFT format, creating the possibility for data corruption or truncation. Oftentimes, banks will need to ‘repair’ a payment by inserting data based on the bank’s proprietary knowledge of local requirements or by asking clients to provide additional information, which causes delays, at others, there is sometimes the loss of payment information.  A number of leading payment infrastructures around the world have already adopted ISO 20022 and retired their proprietary formats. As major market infrastructures such as TARGET 2, CHAPS, Fedwire, and CHIPS and SWIFT user-to-user participants adopt the ISO 20022 messages over the next few years, cross border payments should no longer require banks to reformat or supplement additional payment information before converting them to another currency or sending them to another country.  With richer and more structured payment information and more unified requirements, payments will travel more seamlessly from sender to end receiver. Reconciliation should be greatly facilitated, regardless of the currency or country.  As richer payment data that is ISO 20022 structured and standardized is adopted across the universe of payment infrastructures, and information can flow seamlessly from one nation to another without alteration, banks will have a greater opportunity to harness the power of data in the payments ecosystem.  This payment information is not only valuable from management information and compliance perspectives but can also provide insight to help banks understand their clients’ behaviours and counterparty interactions. Banks can then develop refined products and services supporting their clients in the generation of further commercial opportunities.  Compare how fintechs, through the expansion of services, have become increasingly relevant and have even become integral in their customers’ day-to-day lives like a ride-share company that subsequently introduced an e-wallet to complement their application. Another example is how emerging fintechs have created closed-loop ecosystems and use the power of data to gain insights into their customers’ behaviours using various data aggregations including Artificial Intelligence (“AI”) to anticipate client needs, proactively recommend services to their clients, and customise offerings to provide white glove-like services to grow customer loyalty.  The continuous iteration of data augmentation allows fintechs to expand into adjacent services and further develop their platforms. Similarly, the standardization of data flows in the banking ecosystem will provide opportunities to identify trends, remove new friction points and invigorate the development of new solutions.  Nth Exception is a specialist payments technology and consulting firm assisting financial institutions and corporates introduce, operationalise and process-optimize next-generation payments journeys and systems. Specialists in SWIFT messaging, ISO 20022 and alternative payment methods, we work with customer organizations globally, helping them navigate around complex messaging standards and the detailed requirements of different schemes and market infrastructures, enabling them to better manage uncertainty, improve business connectivity and continuity, reduce operational costs and eliminate barriers to profit, in the fast-changing payments world. Speak to us