Banks Struggle to Meet SWIFT Data Deadline
Global banks are scrambling to meet a November deadline for a major upgrade to cross-border payments systems. SWIFT, the organization that facilitates international money transfers, will stop accepting unstructured address data under the new ISO 20022 standard in November. This shift requires structured data for every payment, replacing the previous format that allowed for incomplete or messy information.
Migration stalls for many institutions
SWIFT data from April shows that a majority of payments still rely on unstructured debtor and creditor addresses. Without compliance, these transactions risk rejection or significant delays. A RedCompass Labs survey found that 44% of banks are behind schedule on this specific requirement. The survey included senior payments professionals from Europe and North America.
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Pratiksha Pathak, RedCompass senior vice president, pointed out that banks often viewed the ISO 20022 migration as a simple message-format change rather than a necessary overhaul of data quality. Anxiety levels vary by institution size. While 20% of very large banks consider the deadline “unrealistic,” only 5% of smaller banks share that concern. This disparity suggests that legacy systems and sheer scale present unique hurdles for the biggest players.
Despite the challenges, institutions are investing heavily. Most banks are spending approximately $20 million on compliance efforts, with larger institutions allocating more than $30 million. Pathak noted that readiness has improved since March, with some institutions launching “brilliant” programs while others hope for a delay. She stated that SWIFT will not move the deadline, leaving the industry with two months to finalize preparations.
Focus shifts to data quality and process
Lloyds has built its solutions around structured data from the beginning. The bank uses API-based channels that natively support the required fields and includes validation controls. As November approaches, Lloyds is increasing its dedicated resources to assist clients. Surath Sengupta, head of transaction banking products at Lloyds, explained that the difficulty often lies in the underlying data. Many organizations hold the necessary information but store it inconsistently across different systems like ERPs and treasury platforms.
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Marianna Polykrati, group treasurer at Avramar, noted that some treasurers face practical issues finding technical specifications from banking partners. At Avramar, treasury and accounts payable share responsibility for the process, making collaboration essential. The company views the compliance effort as a data quality project rather than just a technical filing requirement. This approach allows them to combine the ISO 20022 migration with an upcoming ERP overhaul.
Industry estimates suggest that manual reviews are currently required for 5% to 10% of payments due to sanctions screening alerts. Richer structured data should reduce this friction. While compliance is the starting point, the real value comes from operational improvement. Organizations that treat this as a chance to standardize workflows and strengthen governance may find long-term benefits beyond simply meeting the deadline.
