Smarter Payments, Better Insights: Why Treasurers Should Embrace ISO 20022 Sooner Rather Than Later

With the move to ISO 20022, cross-border financial messages are becoming richer, smarter, and more structured – leaving legacy formats, and their limitations, behind. For corporate treasurers, this is a rare chance to rethink how data flows across treasury. And with the transition deadline set for November 2025 (for financial institutions using the SWIFT network), corporates must also prepare for a shift that enhances payment processing, cash visibility, and automation in reconciliation processes.

 

Understanding the Key Differences Between MT and MX Messages

 

ISO 20022 introduces a new generation of messages – commonly referred to as ‘MX’ in the SWIFT world. While MX is specific to SWIFT, the ISO 20022 standard is also being used in other payment systems globally, such as SEPA and domestic real-time payment schemes.

 

MX messages offer a significant improvement over SWIFT’s traditional MT formats. Unlike text-based MT messages, MX messages use XML, which provides greater flexibility, enriched data fields, and improved interoperability.

 

The structured data format (compare the two examples below by following the links) allows for more transparency, supporting Unicode and including structured addresses, Purpose Codes, and Legal Entity Identifiers (LEIs). Additionally, automation is significantly enhanced through Straight-Through Processing (STP), reducing manual interventions and errors.

 

Message comparison – MX vs MT

 

Example camt.053.001.02 – XML version

Example MT940

 

This transition also improves cash visibility by enabling real-time transaction tracking and enriched remittance data that streamline reconciliation processes (see table for more details).

 

 

Feature	MT Messages	MX Messages (ISO 20022 via SWIFT)	Benefits of MX for Treasury
Data structure & format	Text-based, fixed-length fields	XML-based, structured and flexible	Easier integration, better machine readability
Data capacity	Limited	Rich and extensible	More detailed payment/remittance data
Interoperability	Proprietary to SWIFT	Globally standardised (via ISO 20022)	Easier cross-border and multi-bank integration
Character set	Latin-only (ASCII)	Unicode (multi-language support)	Handles global languages and special characters
Flexibility	Rigid and hard to adapt	Flexible and extensible	Easier to meet changing regulatory or business needs
Efficiency	Manual processing common	Supports automation (STP)	Reduces errors, lowers operational costs
Cost	Often higher due to manual steps	Lower with automation	Saves time and resources on reconciliation
Information richness	Limited field usage, often free text	Structured fields (e.g. LEI, Purpose Code, structured address)	Enables advanced reconciliation, analytics, and compliance checks

 

 

The Business Impact: Faster Payments and Better Cash Management

 

As the table outlines, ISO 20022 offers treasury teams a range of operational and strategic benefits that go beyond compliance. These include faster settlements, thanks to standardised, structured data helping to reduce delays in both domestic and cross-border payments. This cuts processing times from days to hours, or even minutes.

 

Improved cash flow visibility can also be achieved as a result of enriched statement data (e.g. camt.053) which supports near real-time insights, enabling more accurate forecasting and reduced need for buffer reserves. In addition, liquidity management can be enhanced as a result. With better visibility and control, treasurers can optimise working capital and deploy cash more efficiently across entities.

 

Elsewhere, smarter reconciliation can be achieved as detailed remittance and structured references reduce manual effort and speed up matching between bank statements and internal ledgers. And risk management can be improved, through the use of standardised identifiers like LEIs and Purpose Codes to help with screening, fraud detection, and audit trails.

 

Finally, the richness of ISO 20022 messages enables true data-driven decision making, resulting in better analysis for investment planning, intercompany funding, and FX hedging.

 

Why Acting Early Pays Dividends

 

While corporates aren’t subject to a hard deadline for migrating to ISO 20022, there are some important changes on the horizon. For example, from November 2026, all international and SEPA payment instructions must include structured or semi-structured addresses for counterparties. Unstructured formats will no longer be supported, meaning that treasurers will need to ensure their ERP or TMS is ready to capture and transmit address data in the correct format. At a minimum, this includes fields like ISO country code and town name.

 

So, although corporates can technically continue using MT101 files for now, forward-looking treasurers are already planning ahead. Migrating to ISO 20022 XML formats, including pain.001.001.09 (customer credit transfer initiation), ensures alignment with both regulatory expectations and operational best practices. This version supports enhanced data elements including LEIs, Unique End-to-End Transaction References (UETRs), and structured remittance fields, all of which help strengthen reconciliation processes and audit readiness.

 

With most banks set to phase out MT messages by November 2025, relying on dual formats (MT and MX) beyond that point introduces additional operational complexity and risk. For treasury teams, early adoption is the best route to smoother operations, improved compliance, and better long-term efficiency.

 

5 Steps to Ensure a Smooth Migration

 

To take advantage of the benefits on offer, it’s important to recognise that migrating to ISO 20022 is not just about systems upgrades. It requires a wider business transformation, too.

 

Following a structured migration plan can help:

 

1.     The first step involves assessing readiness by evaluating existing systems, engaging with banking partners, and mapping new data requirements.

2.     Next, a comprehensive migration strategy should be developed, prioritising critical payment processes and aligning migration timelines with industry requirements.

3.     Upgrading infrastructure is essential, ensuring that any ERP and/or TMS can support ISO 20022 XML formats and integrate real-time payment networks.

4.     Before full adoption, conducting rigorous testing and validation through parallel runs ensures seamless processing. Training treasury teams on the new formats, compliance requirements, and workflow updates is also crucial.

5.     Once migration is complete, continuous monitoring and optimisation should be performed to track performance and leverage advanced analytics for improved efficiency.

 

Addressing Common Migration Challenges

 

Despite the many benefits of ISO 20022, the path to full adoption isn’t without obstacles – especially for corporate treasurers who sit downstream of their banking partners’ progress.

 

One of the biggest challenges is inconsistent adoption across the banking ecosystem. Not all banks are progressing at the same pace. Some may have already migrated to MX formats, while others continue to use legacy MT messages or apply temporary translation layers that convert ISO 20022 messages into MT formats. This creates data quality gaps, format inconsistencies, and a potential loss of enriched information during translation.

 

To help mitigate these risks, treasurers can take a proactive and collaborative approach. For example, best practice suggests that treasury teams should engage early and often with banking partners to help smooth the migration. Ask relationship banks for a clear roadmap of their ISO 20022 implementation, including timelines, supported message types (e.g. camt.053, pain.001), and any interim conversion strategies. Understanding which banks are sending native MX and which ones use MT back-conversion will also be key to managing expectations.

 

Assessing internal systems readiness is equally important. TMSs and ERPs, as well as payment hubs must be able to both send and receive XML-based messages. Legacy systems may struggle to parse or display enriched ISO data, making system upgrades or middleware solutions necessary.

 

In addition, running parallel processing and testing is advised. Before fully switching over, implement dual processing of both MT and MX messages to highlight discrepancies in data, formatting, or reconciliation outcomes. This helps identify any issues with data loss, field mismatches, or system compatibility.

 

At Salmon, our experience of working with treasurers on these projects points to the importance of implementing robust data validation and mapping tools. A key part of successful migration is ensuring that messages are correctly structured, using the appropriate tags, codes, and identifiers. Automating validation and reconciliation rules helps detect errors before they impact operations.

 

Of course, managing operational and change risk is also vital. ISO 20022 is a a multi-stakeholder transformation involving treasury, IT, banks, vendors, and finance teams. And treasury teams will also need time and training to adapt to the new formats and workflows. Building awareness of the changes in remittance data, transaction codes, and reconciliation logic is essential to prevent disruptions.

 

By identifying risks early, aligning internal and external timelines, and putting the right tools in place, treasurers can make the most of the wider opportunities that this messaging shift presents.

 

 

Turning ISO 20022 into a Competitive Advantage

 

ISO 20022 marks a turning point for treasury. It brings richer data, greater automation potential, and the ability to streamline processes that have long relied on manual workarounds. And for forward-thinking teams, it’s a chance to modernise how treasury connects with the rest of the business – from faster payments and improved visibility to smarter decision-making.

 

With the right TMS, treasury teams can take full advantage of this shift, gaining real-time insights and better control. The result will be a more agile, informed function that plays an even bigger role in driving business value.

 

 

How Salmon can Help Smooth the ISO 20022 Transition

 

Migrating to ISO 20022 doesn’t have to be complex. Salmon Treasurer is fully ISO 20022-ready and designed to simplify every stage of the transition.

 

With native support for XML message formats, Salmon Treasurer can help you:

 

            •           Import structured bank statements (such as camt.053) with complete data detail, including purpose codes, structured references, and remittance information

            •           Automate reconciliation rules using enriched data to improve matching accuracy, reduce errors, and accelerate month-end close

            •           Generate ISO-compliant payment files in XML format, ready for direct submission to banking partners

            •           Validate and map data between legacy formats and ISO 20022 to ensure consistency and avoid formatting issues

            •           Integrate seamlessly with ERP systems and banks via APIs, streamlining payment workflows and reducing manual intervention

 

These capabilities support a faster, more efficient treasury function – minimising operational risk and enabling teams to focus on higher-value activities such as liquidity planning and FX strategy.