Overcoming Key Challenges in ISO 20022 Migration

The transition to ISO 20022 is a pressing task facing financial institutions, with the November 2025 deadline fast approaching. However, ISO 20022 is just one of many significant changes reshaping the financial industry. Banks and financial institutions are also grappling with various other regulatory and strategic demands, such as Anti-Money Laundering (AML) regulations, SEPA, and the shift towards instant payments. During a recent webinar, Paul Darby, Delivery Lead at Roq, shared invaluable insights on how Quality Engineering (QE) can help financial institutions successfully navigate these challenges.

Key Challenges from a Quality Engineering Perspective

Paul Darby discussed several challenges that institutions face from a Quality Engineering perspective, particularly concerning ISO 20022 migration. With compliance being mandatory by November 2025, the stakes are high, those missing the deadline face regulatory fines and potential exclusion from the cross-border payments landscape. The transition to ISO 20022 involves not only a change in messaging standards but also the need to maintain compliance, ensure data quality, and integrate seamlessly with existing systems.

Furthermore, there is a need to balance the urgency of meeting the ISO 20022 deadline with the ongoing operational demands of the institution. While financial institutions deal with multiple complex transformational requirements, they are also under pressure to maintain their day-to-day operations. According to McKinsey, 70% of bank’s IT budgets are consumed by just "keeping the lights on". Darby highlighted that these dual pressures can sometimes lead to senior leaders making snap decisions to meet immediate deadlines, which can jeopardise long-term quality. This is where the principles of Quality Engineering come into play.

Adding to these challenges, the banking industry has witnessed several widespread technology failures in recent months. Customers have been locked out of online banking services, unable to send or receive payments, and left unable to pay for goods and services at shops and supermarkets. These incidents underscore the critical importance of a solid approach to Quality Engineering. With the right QE practices in place, such outages could have been prevented, ensuring seamless service delivery and maintaining consumer trust.

Strategic Planning and Decision-Making: 
Darby emphasised that institutions must prioritise strategic planning from the outset. Tactical, short-term decisions often lead to complications down the road, particularly when juggling multiple regulatory requirements. By embedding QE practices early, institutions can ensure that their ISO 20022 migration aligns with long-term strategic goals, including ongoing compliance with AML regulations and the transition to SEPA and instant payments.

Automation and Efficiency: 
Another key point Darby made was the importance of leveraging automation in testing and implementation. Automation enables financial institutions to manage their resources more effectively, reduce manual errors, ensure consistent compliance and ultimately deliver a high quality solution on time and on budget. With the right automation tools in place, institutions can meet multiple regulatory requirements simultaneously without sacrificing quality.

Ongoing Compliance and Readiness: 
It is important to remember that ISO 20022 is not a one-off project; it is part of a broader, ongoing journey because the messaging standard will continue to change over time. Darby stressed that the tools, processes, and procedures established during this transition should be designed not only to meet the immediate ISO 20022 requirements but also to support long-term compliance as the standard continues to evolve. By adopting a QE mindset, institutions can ensure they remain agile and responsive to future regulatory changes while maintaining operational excellence.

Navigating Multiple Regulatory Demands Simultaneously

It is important to acknowledge the broader context in which financial institutions operate. Beyond ISO 20022, banks are facing mounting pressure to comply with a variety of other regulatory frameworks, including AML regulations and SEPA within the wider payments landscape. The convergence of these demands creates a complex environment where the effective management of resources, time, and budgets becomes crucial to success.

For technology leaders, the challenge lies in balancing these various initiatives while ensuring that each one is delivered on time, within budget, and to a high-quality standard. Darby pointed out that a robust QE approach is critical in this context, as it enables institutions to optimise their resources and streamline processes across all projects. By focusing on quality from the start, banks can avoid the pitfalls of rushed, poor quality implementations and ensure they are well-positioned to meet both current and future regulatory requirements.

Advice for Institutions Managing Transformational Change

According to Darby, strategic and thorough planning from an early stage is key to managing the scale of such widespread transformational change. Institutions should start by identifying the critical information they need to maintain compliance and operational readiness. This involves selecting the right tools, defining clear communication channels, and establishing robust testing processes that support long-term objectives.

Second, Darby recommended investing in automation and simulation wherever possible. Automation not only accelerates testing but also ensures repeatability and consistency, which are essential for ongoing compliance. By making strategic investments in QE now, institutions can create a solid foundation that will support future regulatory changes and reduce the risk of non-compliance.

Finally, Darby emphasised the need for collaboration and community engagement. ISO 20022 migration, like many other regulatory initiatives, is a community effort. The success of the migration will depend on the ability of institutions to work together, share insights, and adopt best practices that benefit the entire financial ecosystem.

IN SUMMARY

The road to ISO 20022 compliance is complex, especially when financial institutions must also manage multiple other regulatory demands such as AML and SEPA. However, by embedding Quality Engineering practices into their strategic planning, institutions can overcome these challenges, maximise the use of resources and deliver a robust, high quality solution. The proper application of QE not only ensures a seamless ISO 20022 migration but also positions organisations to meet future regulatory requirements and maintain a competitive edge in the ever-evolving financial landscape.

For institutions struggling with the scale of these transformational changes, Darby’s advice is clear: adopt a quality-first mindset, plan strategically and invest in automation. By doing so, financial institutions can navigate the complexities of regulatory compliance while setting themselves up for long-term success.