Ron van Haeff
Director Interim Services
There is currently a lot of discussion regarding the migration from MT940 to XML, also known as ISO 20022. I can explain what is happening, why it matters, what challenges exist, and what this means for companies and banks.
What is ISO 20022 and why the migration
ISO 20022 is a modern messaging standard for financial communication, covering payments, reporting, cash management, and more. Unlike older MT (SWIFT-FIN) messages, ISO 20022 is XML-based, allowing much more structured data, including additional fields, hierarchy, and metadata. This richer data enables easier automation (for example, reconciliation), better compliance (sanctions screening, etc.), and more robust reporting. SWIFT is decommissioning certain MT message types, particularly categories 1, 2, and 9 on the interbank network. After this migration, ISO 20022 will become the main standard for interbank communication, such as reporting and payments.
Specifically: Migration of MT940
MT940 is the old SWIFT message for “customer statements,” which shows bank account balances and transactions at the end of the day. Its ISO 20022 replacement is mainly camt.053 (Bank-to-Customer statement). Other MT formats are also migrating:
- MT942 (interim report) → camt.052
- MT900/910 (debit/credit confirmations) → camt.054
Some banks, like Deutsche Bank, have deadlines around November 2025 for certain messages. Some camt versions, such as camt.053 v08, define thousands of tags, meaning that much more information can be transmitted but the complexity increases.
Challenges and points of attention
Technical impact on systems
ERP systems and Treasury Management Systems must handle the new XML structures. Mapping old codes (like Business Transaction Codes in MT) to new ISO codes is required. In SAP systems, XSLT transformations may be needed to read camt.053 XML. Some older accounting systems cannot process or store the additional data from camt.053.
Data quality / master data
Address fields often need to be structured. Unstructured addresses are less accepted in ISO 20022. Companies may need to clean master data to ensure that new mandatory fields, such as LEI or structured addresses, are correctly processed.
Operational risks
During the transition, there is a risk of disruptions: parsing errors or incorrect mappings can lead to payment errors or reconciliation issues. Some companies adopt a phased migration, where banks send both MT940 and camt.053, allowing internal systems to handle both formats and gradually transition. Consolidators that aggregate statements from multiple banks may also face migration challenges. Some banks offer “backward conversion,” converting camt.053 back to MT940 for clients not yet ready, but this is not guaranteed.
Regulatory / compliance
The richer data in camt messages provides better opportunities for compliance, such as anti-money laundering monitoring, because more structured fields are available. Automation can reduce human intervention and thus lower risk.
Change management
Migration is not just an IT project: it affects processes, people (treasury, finance, operations), and governance. Testing is crucial: sample files from banks must be used, and internal systems must be tested thoroughly. Stakeholder management is essential, coordinating IT, treasury, accounting, and banks regarding timing and approach.
Benefits of the migration
- More data and transparency: ISO 20022 provides more structured information than MT, improving visibility of individual transactions, payment sources, and details per invoice.
- Better reconciliation: With more information, payments can be automatically matched to invoices or other records, improving efficiency.
- Future-proof: ISO 20022 is the new standard for financial messaging, preparing organizations for future developments.
- Improved compliance and risk management: structured data supports screening and monitoring better than the old MT messages.
- Better integration with modern systems: contemporary treasury, ERP, and reporting systems can leverage XML for dashboards and analysis.
Critical points
Not all banks deliver “native” camt.053; some convert MT internally, meaning not all extra data is available. Version differences exist (camt.053 v02, v08) with different fields, requiring flexibility. Costs and time must be considered, as the migration requires investment in IT, project management, testing, and training.
Conclusion
The migration from MT940 to ISO 20022 (camt.053) is part of a broader effort in the financial industry to phase out legacy MT messages and replace them with modern, structured XML messages. This offers many advantages, particularly more data, better automation, and improved compliance, but also brings technical and organizational challenges. Companies must act proactively: initiate migration projects, inventory systems, test with banks, and ensure processes are ready for the new reality. For many organizations, this migration will provide strategic benefits in treasury, reporting, and risk management.
If your organization is preparing for this transition and could benefit from specialized expertise, I can connect you with highly experienced interim treasury professionals. experts I have recently collaborated with on a similar ISO 20022 migration assignment.
