The T2-T2S consolidation project moves forward at full speed

SWIFT intends to delay the original migration date to ISO 20022 for cross-border payments by one year, from November 2021 to the end of 2022. This would not affect the launch date of the Eurosystem Single Market Infrastructure Gateway (ESMIG) and T2, the new real-time gross settlement system, which are being developed and rolled out as part of the T2-T2S consolidation project and are scheduled to go live in November 2021.

The ISO 20022 standard is available for financial entities to use for enhanced payments services. TARGET2-Securities (T2S) and TARGET Instant Payment Settlement (TIPS) also support ISO 20022. Its adoption for T2 high-value payments is in progress as the European banking community prepares for user testing to begin, a step which is scheduled for March 2021.

The possible delay in migration to ISO 20022 for cross-border payments would, however, impact the plans to adopt ISO 20022 for correspondent banking business. European banks would need to adapt their strategies. In the interim period between November 2021 and the end of 2022, they would have to maintain their capability to send SWIFT Message Type (MT) payments and reporting messages in addition to the new infrastructure for ISO 20022. Although T2 will support enhanced ISO 20022 payment messages from November 2021, European banks would need to implement a market practice for payments in T2 which have a cross-border dimension.

Using both legacy and new messaging standards for a certain period of time would result in delaying the benefits of fully-fledged ISO 20022 messages. We therefore encourage European banks to discuss with SWIFT how to manage the proposed phasing effectively and how to ensure a safe transition of their correspondent banking business after the new T2-T2S consolidated platform goes live.