ISO 20022: It’s time to stop focusing on the tracks and look at the train

Think of ISO 20022 as a railroad system; the ISO 20022 format provides the tracks, and the payment messages are the trains running on them.

These new trains—loaded with richer ISO 20022 data—and the rails they travel on open a world of opportunity for banks and payment service providers. They’re faster, go farther, and carry more value than anything we’ve seen before.

All the trains need are new rails to run on, and, so far, that has been a substantial undertaking. Take, for example, the move to Swift ISO 20022 from North America to Asia Pacific, and the parallel move to ISO 20022 real-time payments. The effort has been so substantial that, understandably, we’ve focused more on laying the new rails than the value within the trains.

In this blog, I walk through some of the potential benefits of ISO 20022 payments and how these benefits might be realized sooner rather than later.

First, a word on laying the rails. In its recent article, ISO 20022 in bytes for payments - Maintaining the momentum in 2025, Swift noted that, by December 2024, an average of 1.4 million CBPR+ payments were exchanged daily, reaching 32.9% overall and increasing to just more than 40% for the final quarter of 2024. While we still have a long way to go, already there is a substantial volume of global payments on the new rails.

This move is in tandem with (and, in many respects, complements) the parallel worldwide migration to real-time payments.

The challenge for banks now is to find the time and internal bandwidth to realize the benefits inherent in the new trains running on ISO 20022 rails. Banks that are the first to market with new ISO 20022-enabled services may well achieve the largest market share.

From horse and carriage to express railway trains – the revolution in payment services

In principle, the benefits of ISO 20022 adoption are clear and far reaching. ISO 20022 enables many of the world’s largest payment rails to speak (largely) the same language. Although the different payment rails do slightly different things, they can now more easily interoperate and provide different payment services to customers, depending on their requirements (e.g., speed vs cost), and provide greatly enhanced data quality and richness.

ISO 20022 payments open the door to a new generation of services providing new value and revenue streams for banks and their customers (and a return on infrastructure investment), and the payments industry and its key players are under pressure to refocus on the opportunities presented.

Many of these new services are directly controlled by the bank and its customers and are not particularly dependent on the wider rollout of ISO 20022. An example is reconciliation-as-a-service through direct connection to corporate enterprise resource planning systems using the richer data in payments messaging. This has the potential to save staffing and overhead costs for corporates and could lead to reduced days sales outstanding (DSOs), resulting in benefits to cash flow and extending corporate opportunities for dynamic discounting.

Another benefit is using structured remittance data to match invoices with financing offers and offering automated payables/receivables financing to corporate customers based on tighter integration and cleaner data. This helps bring existing bank services into the 21st century.

In addition, real-time visibility into payment transaction details and status helps optimize cash forecasting and liquidity management, reducing costs and optimizing the relationship between banks and their corporate customers.

From a marketing perspective, opportunities emerge to use payment data to power analytics. For example, customer spending patterns can be analyzed and benchmarked across typical market segments, and new products and services can be identified.

Further down the track, ISO 20022 standardization will facilitate the simplification and optimization of cross-border payments. In the retail payment market, real-time, cross-border payments (initiated through API-driven channels) will become achievable, and we’re already seeing investment in this area.

There are exciting opportunities to revitalize bank services and revenues. The value comes from how well the data is used—from the train rather than the track. But, with so much focus on the infrastructure and migration to ISO 20022, the industry has been slow to introduce these new services.

Is your organization ready to catch the train?

Over the past few months, we’ve seen some of our banking clients switch attention from the ISO 20022 rails to powering services that run on them. To get new services to market rapidly, these clients are considering new options for managing payment infrastructure. Moving to a managed services offering (for certain payment rails, as an example) frees up valuable internal resources and expertise to focus on building new value-add services.

If a bank has the desire and resources to commit to long-term maintenance, it can build its own ISO 20022 payment rails for each payment scheme. Frameworks are available to help with this, and ISO 20022 itself is well documented and logical.

However, if development and other resources are scarce, implementing a managed services or hybrid managed services model for the payment rail may allow for parallel development of a value-added service of the sort outlined in the paragraphs above. After all, it’s not the rail that we generate income from, but the train that runs on it.

We have many years of experience in implementing new payment rails around the world (learn more on the CGI All Payments page), both in-house and through the delivery and management of managed services, and in the development of new innovative value-added payment services. We would be delighted to have a conversation at your convenience over a call or a coffee.

Feel free to reach out to me. Also, learn more about our payments work and capabilities.