Host Adam Hanke, NatWest’s Head of Transaction Banking Coverage, was joined by Liz Leather, Policy Manager at the Bank of England (BoE) and Co-Chair of HVPS+; Matthew Bausor, Head of NatWest’s  Bankline Direct, and Ade Smyth, Head of Domestic Payments at NatWest’s Payments Centre of Expertise.

Liz delivered a comprehensive update which not only covered the latest ISO 20022 policy statement and revised industry timelines, but also how the Bank of England aims to fully reap the benefits of ISO 20022 by going further than the minimum technical implementation. The panel also discussed technical aspects of the transition, and how NatWest is getting its digital channels ready for ISO 20022 to help customers.

Key messages from the webinar include:

• “Going one step further”: In the UK, ISO migration kicked off last year in June by moving CHAPS to ISO 20022 payment standard messaging. However, with ISO 20022 being an open international standard which will be applied in many countries around the world, offering a historical chance to create a single common language for most payments globally, the BoE aims to go beyond the minimum technical implementation.  This will extend to mandating certain pieces of enhanced data such as purpose codes, LEIs, structure, remittance and hybrid structured addresses for specific sets of payments. All these ‘add ons’ are outlined in the BoE’s new ISO 20022 Policy Statement.
• Additional structured and enhanced data will help to fully reap the benefits of ISO 20022 (and as such make up for the considerable investment required for implementing the standard) which include cost benefits due to better information about financial transactions, simplifying liquidity management and cash forecasting as well as helping to detect fraud or sanction-sensitive transactions early on.
• The BoE has updated its ISO 20022 policy statement, including some timelines: 
  • The start date for LEIs (Legal Entity Identifiers) to be included for FI-to-FI transactions and Purpose Codes for property payments, has been pushed back from November 2024 to May 2025.
  • From November 2025, the BoE will be enabling the use of hybrid structured addresses, meaning that it will be possible to enter unstructured data, hybrid structured addresses and structured addresses. This move reflects the BoE’s alignment with CBPR+ (International payments) and also shows that the BoE acknowledges that some businesses will need more time and will have to take smaller steps to get to structured addresses, hence have the option of using hybrid structured addresses.  
  • From November 2026, unstructured addresses through the CHAPS payment system will be rejected. From this point, users will only be able to enter hybrid and structured addresses.
  • The updated policy statement also provides further clarifications such as that from November 2027, the BoE will be mandating:
    • The Purpose Code within the pacs.009 COV underlying customer credit transaction
    • LEIs in the pacs.009 COV
    • Any structured remittance information from the associated pacs.009 message to be reflected in the pacs.009
    • All LEIs to be included in the pacs.004 return message, not just from the original message, but as it travels through on its journey.
  • The BoE is currently consulting on the inclusion of Purpose Codes for all CHAPS payments and including all initiation channels within the scope of enhanced data requirements in CHAPs payments, highlighting the BoE’s ambition to include ISO 20022 everywhere to maximise the benefits of the standard.
• The BoE, UK Finance and the Association of Corporate Treasurers are facilitating a workstream to consider how ISO-enhanced data can create value in the UK corporate sector. The workstream will consist of two main strands: an engagement programme with the ERP and vendor community, and a working group with banks, MIs, end-user and vendor representatives to derive industry best practice.

• In March, NatWest already deployed a number of changes, which enable the bank to accept ISO formats, including enhanced data and structured addresses. The work focuses now on adding the required functionality to be compliant with other CHAPS requirements (such as purpose codes, LEIs and structured remittance details).
• The NatWest Digital teams have put in place robust customer support. This includes:
  • For Bankline web customers, the online user interface is going to be enhanced to capture LEIs and purpose codes where required for CHAPS payments.
  • For customers using Bankline via file import, the MX and CVS import formats will be upgraded later this year to include enhanced data fields.
  • For all Bankline customers, NatWest will deploy a number of ISO message formats which will be uploaded shortly onto SWIFT MyStandards. It will allow customers to log in and get a good understanding of what the new formats look like, download some sample messages and do some testing. 
  • Dedicated Bankline Direct web pages with guides and Q&As will be available throughout May through the NatWest and Royal Bank ISO websites. Furthermore, ISO 20022 Migration Managers will be available to support customers

• Over 600 change professionals are working on what’s required to ensure that NatWest will be ISO 20022 compliant.  Smyth: “Part of what the bank is doing is making sure that we've got the access to data in a golden source, reusable, structured way so that as it's pulled from our chat into our channels to our customers, we're making sure we're giving them the right information at the right time.”
• The ISO migration is not a payments programme alone: it needs to be approached as a “whole organisation” programme to ensure the migration delivers improvements for the whole business
• NatWest is investing in strategic partners for its payment engines, orchestration layers, APIs, and ISO 20022 testing tools to ensure compliance not only over the next 18 months but also for the journey beyond.
• The future direction of payments beyond ISO 20022 will depend on the outcome of the UK government’s National Payments Vision which is expected to be published later in the year.

Learn more about ISO 20022 and how we can support you

To listen to the full webinar, please click here. And you can find the slides presented during the event here.

You can also visit our dedicated ISO 20022 website with plenty of information about ISO 20022, how best to approach the implementation, and how NatWest can support you.  Our website also features our Brochure series and recordings of all previous ISO 20022 webinars.

Of course, if you are a customer, you can get advice and practical support through your relationship manager, one of our ISO 20022 migration managers or contact us via ISOSupport@natwest.com