Are financial institutions prepared for the future of financial messaging with ISO 20022

1. As the financial services industry approaches the November 2025 deadline for ISO 20022 adoption for CBPR+, what are the key challenges and opportunities for financial institutions, particularly in Saudi Arabia? 

The migration to ISO 20022 presents both significant challenges and exciting opportunities. On the challenges side, many financial institutions need to contend with legacy systems that often require major upgrades, complex coordination across multiple departments, and the pressure to complete a comprehensive gap analysis before the deadline. For institutions in Saudi Arabia, this means aligning local infrastructure with global standards while managing cost, resources, and operational continuity. However, the opportunities are equally compelling. The new data-rich messaging format enables enhanced straight-through processing, improved analytical capabilities, and a superior customer experience with the ability to better tailor products and services. By embracing ISO 20022, Saudi financial institutions can position themselves as modern, agile players in the global payments ecosystem, driving efficiency and innovation in line with international best practices.

2. Why is ISO 20022 considering a fundamental shift rather than just a compliance update? 

ISO 20022 is far more than a compliance checkbox; it represents a paradigm shift in financial messaging. Unlike previous standards, it introduces a structured, data-rich format that enhances every stage of the payment process. This shift improves interoperability, facilitates real-time data analysis, and streamlines regulatory compliance. Essentially, it transforms the way institutions handle and leverage information, paving the way for more innovative, efficient, and transparent operations. It’s about future-proofing the financial system rather than simply adapting to a new rule.

3. What consequences might financial institutions face if they fail to meet the ISO 20022 compliance deadline? 

Missing the November 2025 deadline could have serious repercussions. Operationally, institutions risk issues like data truncation and messages being ‘NAK’ed – meaning rejected – which disrupts transaction flows. On the business side, relying on outdated, legacy formats means missing out on the benefits of rich, structured data that drive better risk management and customer insights. Financially, non-compliance could result in disincentive pricing for conversion services, increased costs, and potential regulatory penalties. Ultimately, failure to comply not only affects daily operations but also undermines a bank’s long-term competitiveness.

4. How should Saudi financial institutions navigate the migration process? 

Saudi financial institutions should adopt a structured, multi-step approach to manage this complex transition. First, conduct a thorough internal assessment and impact analysis to understand existing gaps. Next, form or leverage strategic partnerships. This could mean outsourcing aspects of the transition to specialists with proven ISO 20022 expertise. Then, develop a detailed project plan outlining clear timelines, responsibilities, and milestones. Rigorous testing is essential to ensure every part of the new messaging system works seamlessly. Finally, while executing the roll-out, keep an eye on future developments to ensure your systems remain adaptable as the industry continues to evolve. This roadmap is not only about meeting a deadline; it’s about ensuring sustainable, long-term success.

5. How does ISO 20022 support Saudi Arabia’s Vision 2030? 

ISO 20022 directly supports Vision 2030 by driving digital transformation and fostering an environment of innovation and efficiency. By transitioning to this modern, data-rich standard, Saudi financial institutions can enhance transparency, improve regulatory compliance, and streamline operations; all of which are key to building a competitive, future-ready economy. The improved interoperability and enhanced analytical capabilities provided by ISO 20022 align perfectly with the goals of economic diversification and technological advancement outlined in Vision 2030, enabling institutions in Saudi Arabia to enhance the services offered to their end users.

6. Any final advice would you offer to Saudi financial institutions as the deadline nears? 

My advice is simple: act now. The window for a smooth transition is closing, and it’s critical to start your migration journey without delay. Focus on building a robust internal framework, invest in technology upgrades, and foster strong partnerships to navigate the complexities of the process. Training and change management are as important as the technical upgrades ensure that your teams are fully prepared for the transition. Embrace the transformation as an opportunity to not only comply with global standards but to also drive innovation and improve overall operational efficiency. The benefits of early adoption will pay dividends in the long term, safeguarding your competitive edge in an increasingly digital world.

Andy Turner, Director, Global Head of Financial Messaging Product Management at Finastra