Regulation & Standards
Published  6 MIN READ

All Round the Houses

The Pain Points of the New ISO 20022 Structured Address Block

With Version 9 XML on the horizon, it is time to question the logic of mandating corporates to de-merge data only for banks to merge it again in the validation process. Here, we ask for your feedback to measure the potential impact of this update.

As part of the original ISO 20022 XML V3 design team back in 2009, its pleasing to note that this payment message has become the de facto standard in the corporate to bank space over the past 12 years. This success has largely been down to the collaborative work within the Common Global Implementation – Market Practice (CGI-MP) group. As a founding member of this collaborative industry group, it defined a series of implementation guidelines that established common principles aimed at removing some of the friction that existed around the corporate-to-bank integration space. The strength of this group was in the breadth and depth of collaboration, with representation from the banks, software vendors, consultants, payments associations, SWIFT and, most importantly, the corporate community.

However, there is now change in the air, with the much talked-about SWIFT MT to MX migration within the interbank payments messaging space. What this means is that SWIFT will be moving from the traditional MT-based messages, initially in the cash management space, onto ISO 20022 XML messages. It’s this migration, which is currently scheduled to take place from November 2022 to November 2025, that is introducing a requirement to adopt the Version 9 XML payment message (pain.001.001.09). The adoption of this version builds on the first major market infrastructure (TARGET2) to adopt the 2019 ISO standards release, which at the time was the latest version.

What does this actually mean?

While SWIFT is starting this migration to the 2019 version XML messages, it will ultimately become a much broader industry implementation. There is one very important point for corporates to be aware of as part of this forthcoming industry migration the move towards explicit usage of the structured address block. This requirement has been driven by the Committee for Payment Market Infrastructures (CPMI), which is a sub-committee of the Bank for International Settlements (BIS).