Global cross-border payments system Swift has rolled out an improved solution for managing payment investigations, with the goal of drastically cutting the time required to resolve delayed payments. This new feature heavily leverages ISO 20022 and could serve as a pivotal example for adopting this advanced messaging protocol.

Financial institutions incur substantial costs—over $1.6 billion annually—due to labor-intensive investigations into delayed payments. According to Swift, the innovative solution may slash these expenses by more than $600 million per year and decrease case resolution times by up to 80%.

Over recent years, cross-border payment speeds have seen improvements: 90% of transactions processed on Swift arrive at their destination bank within an hour. However, if a payment lacks essential information, it may take between five and ten working days for financial institutions to resolve these issues. The average total time required to complete a single investigation has remained steady over the past five years, clocking in at 200 hours.

Implementing the New Standards

Swift’s new solution streamlines the investigation process by utilizing ISO 20022 data to boost transparency and interoperability among networks. Messages that comply with ISO 20022 carry more structured data, which is easily understood by all parties involved in a transaction.

Beyond Swift’s network transactions, the protocol can also be applied to payments utilizing UETR (Unique End-to-End Transaction Reference). This reference number offers visibility into a payment’s status and location at every stage of its journey.

An Example of ISO 20022 Adoption

Starting in November, Swift mandates the use of the ISO 20022 protocol for all network transactions. This framework aims to enhance communication interoperability among financial institutions, market infrastructures, and end-users.

Although ISO 20022 is anticipated to reduce errors in transactions, a barrier to its widespread adoption is the lack of full recognition by many financial institutions regarding these benefits. As noted by James Wester, Co-Head of Payments at Javelin Strategy & Research:

“There will probably be plenty of financial institutions that look at ISO 20022 and say, ‘Oh, it’s not something that applies to us.’” However, this outlook means that in the future, they or their partners may face higher costs.