Confusion, Misunderstanding, Apathy: the Pain Points of the XML v9 New Structured Address Block

In a TMI article in April 2021^[1], Mark Sutton, Senior Manager, Corporate Treasury Adviser, Zanders, questioned the banking industry’s logic of requiring corporates globally to provide a full structured address as part of the adoption of the new XML Version 9 payments message. The article included an online survey to assess the potential impacts. Last March^[2], he provided an update on the industry discussions. This article completes the trilogy with a final eye-opening update on the likely outcome if a pragmatic approach is not adopted with financial XML messaging. 

The story so far

SWIFT will finally start its MT to MX migration within the interbank payments messaging space in March this year. This will see SWIFT move from traditional MT-based messages onto ISO 20022 XML messages. Arguably the most important point for corporates to be aware of is the move towards explicit use of the structured address block.

While it was initially unclear who was actually driving this change, a full structured address does deliver material benefits in terms of AML/compliance validation when compared with the current fully unstructured model. However, there are some significant impacts for the global corporate community, if the full structured address becomes mandatory as part of the SWIFT migration.

The SWIFT PMPG^[3] (Payment Market Practice Group) has advised that their dialogue with the in-country real-time gross settlement (RTGS) operators (the Federal Reserve, the European Central Bank and the Bank of England [BoE]) all plan to mandate the full structured address with the SWIFT ISO migration. Furthermore, the BoE confirmed in its December 2020 policy statement that there were strong benefits for requiring addresses to be in a fully structured format to remain aligned with international market practice. Nevertheless, today, the only international market practice around the first line of the address is to use an unstructured option due to the significant complexity that exists globally around this address line 1.

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