This summer, the Fedwire Funds Service will introduce a common global language for the remittance data accompanying its wire transfers. Hancock Whitney is ready for the transition.
Fedwire is adopting the ISO 20022 standard message format in a single-day implementation scheduled for July 14*. At Hancock Whitney, we’ve been readying ourselves for this transition for some time now. We invested in systems and staffing to facilitate message conversions and have been engaged in due diligence testing of our systems with the new format over the last two years. As a result, we are compliant and ready for the July 14 transition.
So, what should clients who use our wire transfer services expect following the implementation of ISO 20022? You may have seen changes to wire templates, where the Bank-to-Bank fields were removed. Additionally, domestic wire payments and templates will require a beneficiary address going forward. But please note that we will provide additional information on those changes in a separate communication.
Why the Change?
The new Fedwire message format is part of a larger, global effort to enhance financial communications.
In the financial industry, messaging standards enable systems and networks around the world to communicate with each other. To improve this communication, in 2004, the Geneva-based International Organization for Standardization launched its ISO 20022 messaging standard. Financial organizations in more than 70 countries currently use the standard for business areas that include not only payments, but also securities, trade services, cards and foreign exchange.
In the payments arena, the standard provides a structured and data-rich common language that is readily exchanged between corporates and banking systems. And now, in the U.S., that common language will be used for wire transfer remittance data.
How the New Standard Impacts You
Initially, the primary benefit of this new messaging standard for our business wire transfer users is that the data-rich message format ensures addenda information accompanying payments is reliably transmitted between banks. Additionally, it enables consistent, robust reporting across all banks.
However, longer term, according to the Federal Reserve, “for corporates and financial institutions alike, broad adoption of the ISO format will lead to operational efficiencies, including the ability to exchange detailed remittance information along with a customer payment; support for straight-through processing; and a reduction in errors and the need for manual processing steps.”
To learn more about the upcoming transition, visit the Fedwire® Funds Service ISO® 20022 Implementation Center or call your Hancock Whitney treasury sales representative.
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