Why 97% Readiness Doesn’t Tell the Full Story
- Finance
ThePostMaster- 0
- 24 minutes read
For brokers handling client funding, ISO 20022 has already changed the baseline. Payment messages now carry far more structured context — from purpose codes to beneficiary details — giving banks and regulators greater visibility without follow-up requests.
That transparency was expected. What proved less obvious after the cutover is how many institutions remain operationally unprepared to actually use that data.
On November 22, 2025, SWIFT flipped the switch. After 32 months of coexistence, the legacy MT message format was officially retired, and ISO 20022 became mandatory for all cross-border payment instructions. For the 11,500 financial institutions on SWIFT’s network, this was the biggest infrastructure change in decades.
SWIFT reported 97% of payment instructions using ISO 20022 on day one. No major disruptions. Jerome Piens, SWIFT’s Chief Operations Officer, called it “a huge achievement for the global industry.”
But getting through the cutover and being ready for ISO 20022 are two different things. Many of those “compliant” institutions are relying on automatic conversion services—translating messages instead of processing them natively.
As of January 1, 2026, those services became chargeable. Institutions relying on this temporary bridge now carry a recurring operational cost.
The real story isn’t the cutover. It’s what became visible after.
What Became Visible Only After the Switch
ISO 20022 is a structured, data-rich standard designed to carry dramatically more information than legacy MT messages—complete beneficiary addresses, Legal Entity Identifiers, detailed remittance information, all in machine-readable format.
According to Datos Insights survey, before the cutover, 23% of banks reported that 12% to 15% of their cross-border payments incurred charges due to failures, and 18% said this occurred more than 25% of the time.
ISO 20022’s structured data was meant to reduce these failures through better data quality and automated reconciliation.
But those benefits only materialize if you’re processing the messages natively. And not all institutions that appeared in SWIFT’s 97% statistic are doing that.
Payments architecture expert Shivas Dutt recently noted on LinkedIn that validation success does not automatically translate into operational readiness — a gap many institutions are now confronting post-cutover.
Industry sentiment appears to reflect this shift. A recent LinkedIn poll by TIS (Treasury Intelligence Solutions) shows that system readiness and data quality remain the top ISO 20022 concerns, while payment disruption ranks last.
The Translation Trap
The pressure to move beyond translation-based compliance is now coming from multiple directions. According to Krishna Subramanyan, CEO of Bruc Bond, payments infrastructure provider, regulation may have triggered ISO 20022 adoption, but infrastructure limitations and economic pressure are now accelerating the shift.
He notes that while richer data can reduce false positives by up to 30%, those gains only materialise when compliance is embedded directly into payment infrastructure — a challenge many institutions are still struggling with after the cutover.
“Standardised, granular data is intended to “train” payment systems to handle transactions more accurately and with fewer manual checks”, Subramanyan says.
Krishna Subramanyan, Chairman and CEO at Bruc Bond. Source: LinkedIn
Many firms are using SWIFT’s conversion services—receiving rich ISO 20022 messages, then immediately converting them back to legacy MT format for their old systems to handle. It keeps payments flowing, but strips out exactly the data that made the migration worthwhile: no access to detailed remittance information, no automated reconciliation, no structured compliance data.
During the coexistence period, these translation services were free. From January 1, 2026, SWIFT began charging for them. Moreover messages bear a flag identifying they’ve been converted by SWIFT, which means correspondent banks and regulators can see exactly which institutions are using workarounds instead of native processing.
Regulators and correspondent banks increasingly rely on ISO 20022 data richness to assess AML and sanctions risk. Poor data quality from translated messages may lead to blocked payments or de-risked relationships. Thus as of January 2026, banks relying on translation tools face not just financial costs, but operational risk and reputational damage.
The Escalating Timeline
By November 2026, unstructured addresses will no longer be permitted in ISO 20022 messages. Firms still using translation services at that point will face rejected transactions. Their converted messages won’t meet the new validation rules.
By November 2027, MT-formatted exceptions and investigations messages will be fully retired, forcing another round of system updates for institutions that postponed migration.
Every delayed migration decision means more systems to update, more validation rules to implement, and more charges accumulating while competitors who migrated natively are already leveraging data advantages that create tangible business value.
Translation was sold as a bridge, but turned out to be a toll road with rising fees and a dead end ahead.
Large institutions that invested in native ISO 20022 processing can now leverage straight-through reconciliation and automated compliance screening.
Smaller players using translation services can’t access the richer data, can’t build services that depend on structured information, and face rejected messages when SWIFT introduces enhanced validation rules.
SWIFT ISO 20022: the timeline
What This Means for Brokers Right Now
For brokers, the shift to ISO 20022 shapes how payments actually work with clients. Three things changed on November 22 that affect their daily operations.
Payments Are Now More Transparent
ISO 20022 messages carry structured data that banks and regulators can read automatically. The structured data improves compliance accuracy across sanctions screening and AML. Where legacy MT messages buried payment details in free-text fields, the new format exposes them in tagged, searchable fields.
For forex and securities brokers handling client funding, this means regulatory authorities can now see transaction context they couldn’t before—payment purpose, beneficiary relationships, source of funds—without requesting additional documentation. Systems must now accept and validate hybrid address messages, implementing AML and sanctions screening, and integrating onboarding systems.
Wire Transfers Require More Data
Clients can’t just “send a wire to this account” anymore. Banks are rejecting payments that don’t include structured beneficiary information, purpose codes, and complete address data. By November 2026, unstructured address fields will be rejected entirely.
This creates operational friction.
Brokers need to provide clients with detailed payment instructions—structured addresses with building numbers and postal codes, specific purpose codes, beneficiary identification details. When clients get it wrong, the payment gets rejected, and the broker’s back office handles the investigation.
“The move to more comprehensive and structured payment data has led to initial operational adjustments in client funding workflows,” a spokesperson at Interactive Brokers said.
The transition, the broker noted, reflects the challenge of moving away from messaging formats that have been in place for decades.
More Work for Back Office
The structured data requirements mean more validation before payments go out. For brokers with properly configured systems, this reduces false positives and minimizes manual review.
For those still using legacy processes, it’s the opposite: more manual checks, more rejected payments, more client service calls.
The Crypto Broker Opportunity
For cryptocurrency exchanges and brokers, ISO 20022 creates an integration pathway. ISO 20022 sets the framework for how crypto platforms and exchanges will connect with the traditional financial system. Platforms that implement structured messaging for fiat on/off-ramps can integrate more cleanly with banking partners.
But there’s important nuance here. ISO 20022 deals with the payment infrastructure around coins or blockchains. Crypto brokers benefit when their fiat banking rails speak ISO 20022, not because the tokens themselves are “certified.”
Some brokers are increasingly looking beyond traditional banking rails altogether, experimenting with alternative settlement mechanisms to manage intraday liquidity and intercompany transfers more efficiently. This interest appears to be driven less by crypto ideology than by frustration with the limits of conventional payment infrastructure.
Control and Transparency
ISO 20022 brings enhanced control and transparency. Banks can now automatically verify payment details that previously required manual checks. Regulators can screen transactions more precisely. Correspondent banks can enforce stricter data quality standards.
For brokers operating on thin margins, this means compliance costs went up while processing speed stayed roughly the same. The firms that implemented native ISO 20022 can automate much of this work. The ones still using translation services are handling it manually—and paying extra for slower results.
Early Takeaways, Not Final Conclusions
November 22 was a milestone, not a finish line. The institutions that treated it as the latter are discovering that reality the hard way.
For years, the industry treated ISO 20022 as a technical deadline — a format change to be managed, delayed, or translated. In reality, it turned out to be an operational reform that exposed how payment systems actually function under pressure.
The systemic effects of ISO 20022 will become fully visible as 2026 progresses and enforcement mechanisms activate. The firms ready for those deadlines will barely notice. The ones that aren’t will face rejected messages, blocked investigations, and operational chaos precisely when they’re trying to resolve customer issues.
The ISO 20022 cutover closed a chapter in payments history. But the industry is only starting to read what comes next—and not everyone prepared for the next chapter while it was being written.
For brokers handling client funding, ISO 20022 has already changed the baseline. Payment messages now carry far more structured context — from purpose codes to beneficiary details — giving banks and regulators greater visibility without follow-up requests.
That transparency was expected. What proved less obvious after the cutover is how many institutions remain operationally unprepared to actually use that data.
On November 22, 2025, SWIFT flipped the switch. After 32 months of coexistence, the legacy MT message format was officially retired, and ISO 20022 became mandatory for all cross-border payment instructions. For the 11,500 financial institutions on SWIFT’s network, this was the biggest infrastructure change in decades.
SWIFT reported 97% of payment instructions using ISO 20022 on day one. No major disruptions. Jerome Piens, SWIFT’s Chief Operations Officer, called it “a huge achievement for the global industry.”
But getting through the cutover and being ready for ISO 20022 are two different things. Many of those “compliant” institutions are relying on automatic conversion services—translating messages instead of processing them natively.
As of January 1, 2026, those services became chargeable. Institutions relying on this temporary bridge now carry a recurring operational cost.
The real story isn’t the cutover. It’s what became visible after.
What Became Visible Only After the Switch
ISO 20022 is a structured, data-rich standard designed to carry dramatically more information than legacy MT messages—complete beneficiary addresses, Legal Entity Identifiers, detailed remittance information, all in machine-readable format.
According to Datos Insights survey, before the cutover, 23% of banks reported that 12% to 15% of their cross-border payments incurred charges due to failures, and 18% said this occurred more than 25% of the time.
ISO 20022’s structured data was meant to reduce these failures through better data quality and automated reconciliation.
But those benefits only materialize if you’re processing the messages natively. And not all institutions that appeared in SWIFT’s 97% statistic are doing that.
Payments architecture expert Shivas Dutt recently noted on LinkedIn that validation success does not automatically translate into operational readiness — a gap many institutions are now confronting post-cutover.
Industry sentiment appears to reflect this shift. A recent LinkedIn poll by TIS (Treasury Intelligence Solutions) shows that system readiness and data quality remain the top ISO 20022 concerns, while payment disruption ranks last.
The Translation Trap
The pressure to move beyond translation-based compliance is now coming from multiple directions. According to Krishna Subramanyan, CEO of Bruc Bond, payments infrastructure provider, regulation may have triggered ISO 20022 adoption, but infrastructure limitations and economic pressure are now accelerating the shift.
He notes that while richer data can reduce false positives by up to 30%, those gains only materialise when compliance is embedded directly into payment infrastructure — a challenge many institutions are still struggling with after the cutover.
“Standardised, granular data is intended to “train” payment systems to handle transactions more accurately and with fewer manual checks”, Subramanyan says.
Krishna Subramanyan, Chairman and CEO at Bruc Bond. Source: LinkedIn
Many firms are using SWIFT’s conversion services—receiving rich ISO 20022 messages, then immediately converting them back to legacy MT format for their old systems to handle. It keeps payments flowing, but strips out exactly the data that made the migration worthwhile: no access to detailed remittance information, no automated reconciliation, no structured compliance data.
During the coexistence period, these translation services were free. From January 1, 2026, SWIFT began charging for them. Moreover messages bear a flag identifying they’ve been converted by SWIFT, which means correspondent banks and regulators can see exactly which institutions are using workarounds instead of native processing.
Regulators and correspondent banks increasingly rely on ISO 20022 data richness to assess AML and sanctions risk. Poor data quality from translated messages may lead to blocked payments or de-risked relationships. Thus as of January 2026, banks relying on translation tools face not just financial costs, but operational risk and reputational damage.
The Escalating Timeline
By November 2026, unstructured addresses will no longer be permitted in ISO 20022 messages. Firms still using translation services at that point will face rejected transactions. Their converted messages won’t meet the new validation rules.
By November 2027, MT-formatted exceptions and investigations messages will be fully retired, forcing another round of system updates for institutions that postponed migration.
Every delayed migration decision means more systems to update, more validation rules to implement, and more charges accumulating while competitors who migrated natively are already leveraging data advantages that create tangible business value.
Translation was sold as a bridge, but turned out to be a toll road with rising fees and a dead end ahead.
Large institutions that invested in native ISO 20022 processing can now leverage straight-through reconciliation and automated compliance screening.
Smaller players using translation services can’t access the richer data, can’t build services that depend on structured information, and face rejected messages when SWIFT introduces enhanced validation rules.
SWIFT ISO 20022: the timeline
What This Means for Brokers Right Now
For brokers, the shift to ISO 20022 shapes how payments actually work with clients. Three things changed on November 22 that affect their daily operations.
Payments Are Now More Transparent
ISO 20022 messages carry structured data that banks and regulators can read automatically. The structured data improves compliance accuracy across sanctions screening and AML. Where legacy MT messages buried payment details in free-text fields, the new format exposes them in tagged, searchable fields.
For forex and securities brokers handling client funding, this means regulatory authorities can now see transaction context they couldn’t before—payment purpose, beneficiary relationships, source of funds—without requesting additional documentation. Systems must now accept and validate hybrid address messages, implementing AML and sanctions screening, and integrating onboarding systems.
Wire Transfers Require More Data
Clients can’t just “send a wire to this account” anymore. Banks are rejecting payments that don’t include structured beneficiary information, purpose codes, and complete address data. By November 2026, unstructured address fields will be rejected entirely.
This creates operational friction.
Brokers need to provide clients with detailed payment instructions—structured addresses with building numbers and postal codes, specific purpose codes, beneficiary identification details. When clients get it wrong, the payment gets rejected, and the broker’s back office handles the investigation.
“The move to more comprehensive and structured payment data has led to initial operational adjustments in client funding workflows,” a spokesperson at Interactive Brokers said.
The transition, the broker noted, reflects the challenge of moving away from messaging formats that have been in place for decades.
More Work for Back Office
The structured data requirements mean more validation before payments go out. For brokers with properly configured systems, this reduces false positives and minimizes manual review.
For those still using legacy processes, it’s the opposite: more manual checks, more rejected payments, more client service calls.
The Crypto Broker Opportunity
For cryptocurrency exchanges and brokers, ISO 20022 creates an integration pathway. ISO 20022 sets the framework for how crypto platforms and exchanges will connect with the traditional financial system. Platforms that implement structured messaging for fiat on/off-ramps can integrate more cleanly with banking partners.
But there’s important nuance here. ISO 20022 deals with the payment infrastructure around coins or blockchains. Crypto brokers benefit when their fiat banking rails speak ISO 20022, not because the tokens themselves are “certified.”
Some brokers are increasingly looking beyond traditional banking rails altogether, experimenting with alternative settlement mechanisms to manage intraday liquidity and intercompany transfers more efficiently. This interest appears to be driven less by crypto ideology than by frustration with the limits of conventional payment infrastructure.
Control and Transparency
ISO 20022 brings enhanced control and transparency. Banks can now automatically verify payment details that previously required manual checks. Regulators can screen transactions more precisely. Correspondent banks can enforce stricter data quality standards.
For brokers operating on thin margins, this means compliance costs went up while processing speed stayed roughly the same. The firms that implemented native ISO 20022 can automate much of this work. The ones still using translation services are handling it manually—and paying extra for slower results.
Early Takeaways, Not Final Conclusions
November 22 was a milestone, not a finish line. The institutions that treated it as the latter are discovering that reality the hard way.
For years, the industry treated ISO 20022 as a technical deadline — a format change to be managed, delayed, or translated. In reality, it turned out to be an operational reform that exposed how payment systems actually function under pressure.
The systemic effects of ISO 20022 will become fully visible as 2026 progresses and enforcement mechanisms activate. The firms ready for those deadlines will barely notice. The ones that aren’t will face rejected messages, blocked investigations, and operational chaos precisely when they’re trying to resolve customer issues.
The ISO 20022 cutover closed a chapter in payments history. But the industry is only starting to read what comes next—and not everyone prepared for the next chapter while it was being written.
