The new financial messaging standard offers big benefits for financial institutions

As the global financial ecosystem continues to evolve at its rapid pace, so must the infrastructure that supports it. ISO 20022, a modern and data-rich messaging standard for financial transactions, is key to this transformation. With its structured format and global reach, ISO 20022 is reshaping how financial institutions communicate, process transactions and innovate for the customers they serve.

The July 2025 migration of Fedwire to ISO 20022 marks a major milestone for U.S. adoption. The retirement of FAIM, the Federal Reserve’s proprietary format, has impacted every institution connected to Fedwire. While some may see this as a compliance hurdle, it’s actually a powerful opportunity for innovation and growth.

 

ISO 20022 in review

Developed by the International Organization for Standardization (ISO), ISO 20022 is more than a set of rules—it’s a global common language for financial messages across payments, securities, trade services, cards, and foreign exchange. Unlike legacy formats such as Fedwire FAIM, SWIFT MT, and ACH, ISO 20022 uses XML-based syntax to deliver richer, more structured data. This enhances interoperability, automation, and scalability across systems. Europe has led the way in adoption, while the U.S. has progressed more gradually. Instant payment systems like RTP^® and FedNow^® already use ISO 20022, and CHIPS adopted it in April 2024. Fedwire is the final major U.S. payments system to make the transition

 

Bring on the benefits

While moving to a new format from legacy systems they’ve used for 40 years admittedly involves some short-term pain for financial institutions, the practical upside is substantial. ISO 20022 does more than improve the front end; its enriched transaction data can transform an institution’s internal operations. Some examples:

• Exception handling: Richer remittance data drastically reduces unmatched payments and manual research
• Reconciliation: Automated matching reduces labor and error
• Regulatory reporting: Standardized fields simplify AML/KYC filings with audit-ready trails
• Fraud detection: Structured data enables more thorough investigation and the ability to see patterns of behavior more clearly
• Liquidity analytics: More granular tags enable precise intraday liquidity forecasting
• Interoperability: Harmonized ISO messaging eases cross-system integration and future expansion

Having access to rich data can result in greater efficiency, cost-savings and risk mitigation, turning messaging modernization into a boost for productivity.

Monetizing the data

The expanded data fields in ISO 20022 won't just benefit internal operations. Beyond operational gains, ISO 20022 opens new revenue and service opportunities. Financial institutions can leverage enriched data to deliver value-added offerings to business clients. Possible services include:

• Advanced remittance services: Matching invoices, automating reconciliation, reducing exceptions
• Compliance enhancements: Sophisticated sanctions screening, tax code matching, audit trails
• SMB/corporate dashboards: Visualization of payment lifecycle, status, analytic tools
• Foreign exchange: Better end-to-end visibility of cross-border flows
• Liquidity management tools: Real-time cash positioning, predictive funding, intraday sweeps

Banks could package ideas like these into subscription- or usage-based offerings - such as reconciliation-as-a-service, instant compliance checks or cash forecasting platforms - thus monetizing their ISO 20022 readiness. Now is the time to start building use cases for these kinds of value-added services.

 

Future-proofing systems

Some financial institutions may have the idea that, instead of fully embracing ISO 20022, they’ll just install a workaround to translate the new messaging to their legacy systems. Fiserv doesn’t advise that. There are important benefits to being ISO-ready now, in order to future-proof systems as change continues in the payments arena.

First there’s the ability to interact easily with new digital services, such as the growing number of instant payments companies, which all use ISO 20022. The structure of digital systems gives them a longer life, and full compatibility is a real asset.

Some institutions may consider translating ISO messages into legacy formats. Fiserv advises against this. Full ISO adoption ensures compatibility with digital services and prepares institutions for future enhancements.

ISO 20022 is flexible and designed to evolve. As the payments landscape changes, institutions fully onboard with ISO will be better positioned to adapt. Innovations like aligning the financial supply chain with the physical supply chain are now within reach—enabled by ISO’s structured data 

To stay competitive, institutions must actively engage with ISO 20022 and avoid being left behind in legacy systems.

 

What Fiserv is doing

Fiserv’s business is global, so we've been working on ISO 20022 for some time. We migrated our clients to ISO in Europe for the European systems. We're now focused on the U.S.

Our clients are asking: “We’ve migrated—now how do we use it?” Early adopters are exploring how ISO’s rich data can enhance operations and unlock new services. Institutions using our Enterprise Payments Platform (EPP) are especially interested in leveraging ISO for innovation.

We’ve started a dialogue. Whether by expanding existing products like EPP or developing new platforms, our approach will be collaborative and client-centered—focused on turning ISO 20022 into a strategic asset.

As their technology partner, we want to address the payments challenges and opportunities facing financial institutions in a way that makes sense for their future growth.

 

Embracing the new future

ISO 20022 isn’t just a compliance requirement – it’s a strategic opportunity. For financial institutions, welcoming this standard can unlock new efficiencies, insights and innovations. Now is the time to act, invest and lead.