In 2017, the Federal Reserve announced plans to migrate the Fedwire® Funds Service to ISO® 20022. Since then, the migration has been delayed to allow for industry readiness.
Now, we’re looking at the potential for the final migration: Fedwire with ISO 20022 is set to go live on March 10, 2025. But the industry may still not be ready—and the Federal Reserve Board of Governors needs to make that call.
The Fed will announce on February 21, 2025, whether it and the industry are adequately prepared to transition Fedwire to ISO 20022 on March 10. This announcement will be a “go/no go” decision based on an assessment of industry readiness and the Fed’s preparedness, and it’s yet to be determined which way the pendulum will swing.
The stakes behind the Board of Governors' 'go/no go' decision are even higher now due to significant changes since the last postponement in 2022. Since then, FedNow®, the Clearing House CHIPS®, and SWIFT have all either launched or implemented ISO 20022 domestically or internationally
However, regardless of the outcome, FIs must continue their preparations to ensure they are ready if the Fed signals a flip of the proverbial switch on March 10. When the Fedwire ISO 20022 migration goes live, the Fed will no longer support the legacy format of the Fedwire Application Interface Manual (FAIM), and it will be a single-day migration without translation services.
As you plan your institution's next steps, review the following measures to ensure you're thoroughly prepared.
How FIs Can Prepare for ISO 20022
To prepare for the ISO 20022 migration, financial institutions should:
- Upgrade their infrastructure to support the new standards. The Fed plans to stop using the FAIM format on March 9, 2025, and switch to IS0 20022 on March 10, 2025. Financial institutions may consider partnering with qualified vendors that offer products and services to facilitate migration. The Fed has compiled a list of vendors that provide such products and services as a resource.
- Consider a phased approach to migrating data from previous standards to ISO 20022 over the next month. In addition to infrastructure upgrades, this may include finalizing translation tools, working with outside vendors, and learning from the experiences of others in the industry.
- Train staff on the new data format and compliance requirements. Deloitte points out that staff will also require training in end-to-end processing, managing payments messaging across multiple lines of business, and ensuring the full ISO 20022 dataset can be retained according to regulatory guidelines.
- Realign payments operations to support ISO 20022. Financial institutions will need to assess current operations and make final changes to support ISO 20022 formatting and compliance. This will include revising internal processes, tools, transaction reporting, and chargebacks, to name a few. Additionally, ensuring that downstream partners are adequately prepared is crucial for success.
- Educate yourselves about the migration to ISO 20022. The ISO 20022 Implementation Center is a good place to start. It includes preparedness checklists, educational opportunities, frequently asked questions, and more.
What if My FI Isn’t Ready for the ISO 20022 Migration?
If your financial institution is not ready for the March 10 ISO 20022 migration, the Fed ISO 20022 Implementation Center says this: “Fedwire Funds Service customers should make contingency arrangements if they are not ready to cut over to ISO 20022 messages on March 10, 2025. Customers who have access to the FedPayments® Manager—Funds application as a backup will be able to manually send and receive their Fedwire Funds messages if their primary method of accessing the Fedwire Funds Service is not ready or if they experience an issue on or after the March 10, 2025, implementation.”
The February 21 Go/No Go Decision
Per the Fed ISO 20022 Implementation Center, “The Federal Reserve Banks will notify all customers about the ‘go/no go’ decision on February 21, 2025. If a ‘go’ decision is made, the Federal Reserve Banks will be subject to a two-week freeze period during which no further changes will be made to the ISO 20022 software and production infrastructure. If the Federal Reserve Banks decide to delay the implementation date for any reason, the notification will provide customers with two weeks’ advance notice to adjust their plans.”
For specific questions about the Fedwire ISO 20022 migration and what you need to do to prepare, reach out to NEACH payments experts at 781-321-1011 or email at info@neach.org.
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AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.
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