The impact of Cross-Border Payments and Reporting-Plus (CBPR+) on customer reporting comes under the spotlight.
As the payments industry has already embarked on the journey of adopting ISO 20022 messaging (MX) for international transactions, payment instructions will become richer and STP will increase with enhanced data. For now, customer reporting has not changed significantly, as most of the banks have not yet migrated to new message formats for reporting. Even though some banks are already providing an older version of MX reporting to corporates, that is mainly a like for like version of MT reporting.
Since the start of MX messages for cross border payments in March 2023, 15% of traffic has already been shifted to the new format, with a daily average of 635,000+ payment MX messages transmitted over the SWIFT network, and the adoption is growing day by day.
Once enhanced data flows within payment instructions, and banks adopt the new reporting formats, it will be interesting to witness the market’s response to enhanced customer reporting, which should eventually benefit both financial institutions (FIs) and corporates. At present, corporates are not obliged to move to MX, but they will start seeing the impacts, such as data loss and data truncation on existing reporting, soon.
Some might argue that this change is regulatory driven, but adopting a richer format has long since been a business need. One of the major challenges that FIs and corporates are currently facing relates to different messaging formats in various market infrastructures.