What Is ISO 15022(MT) And ISO 20022(MX) And Why Conversion Required Between ISO 15022 And ISO 20022?

ISO 15022(MT) Vs ISO 20022(MX)

ISO 15022 and ISO 20022 are two international standards that have been established in relation to financial messaging. The use of these international standards applies particularly to securities trading, payments, and related financial transactions. These international standards are maintained by SWIFT (Society for Worldwide Interbank Financial Telecommunication) as a method to ensure standardized or structured communication between financial institutions.

🔹 ISO 15022

Published: 1995

Scope: Mainly applicable to securities messaging (e.g., trade confirmations, settlement instructions).

Format: Military standard-type formats, which are proprietary text format standards that are established around using MT (Message Type formats) using proprietary syntax.

Characteristics of ISO 15022:

– Rigid in the characteristics of fixed fields.

– Less flexible and harder to be adaptable in newer financial product launches.

– Human readable but had limited complexity.

– Example of ISO 15022 messaging: MT103 (Single Customer Credit Transfer)

🔹 ISO 20022

Published: Early 2000s; a wider scope – payments, securities, trade finance, cards etc.

Format: Use XML-based syntax, data dictionaries, and business process modeling.

Characteristics of ISO 20022:

– Flexible format, extensible, and machine readable.

– Rich data structure – allows messaging to carry more detail and structured information.

– Globally standardized and more ‘future proof’.

– Example of ISO 20022 messaging: pacs.008 (Customer Credit Transfer)

🔄 Why Conversion Is Required: IS0 15022 → ISO 20022

With the industry’s movement toward digital transformation and the need for greater data richness, we are finding that the conversion of ISO 15022 to ISO 20022 is necessary.

✅ Top Reasons For Converting

Reason Description

Data Enrichment             – Because ISO 20022 brings more data and structure to flows, it improves automation and compliance.

Global Standardization  – ISO 20022 is being adopted (ECB, SWIFT, Fedwire, etc.) as the worldwide standard for financial messaging,

Regulatory Compliance – Authorities (EU, US Fed, etc.) are insisting on the move to ISO 20022 to bring more transparency and oversee compliance more easily.

Interoperability – Provides easy messaging across systems and institutions.

Legacy Outage – SWIFT will convert MT messages to ISO 20022 for some use cases and end the legacy platform.

🔧 Challenges To Conversion

Mapping complexity: not always one-to-one in between the MT (ISO 15022) and MX (ISO 20022) messages.

Data loss: The ability to convey an aspect of a transaction may be lost if ISO 20022 is converted back to ISO 15022.

Infrastructure upgrade: Systems would need to be upgraded to parse and process XML formats.

Training & testing: requires a transition from existing knowledge and would require extensive periods of validation on releases.

🌐 Status Of The Industry

It is anticipated that by Nov 2025 most major financial institutions will have adopted ISO 20022 or will be in transition.

SWIFT started migrating its Cross-border payments to ISO 20022 in March 2023 and will complete its migration by Nov 2025.