By Roy Urrico
The Federal Reserve Financial Services (FRFS) announced a revised timeline for the transition to the ISO 20022 message format for the Fedwire Funds Service. The implementation’s postponement permits extra time for industry participants to prepare for the conversion.
“The industry has made significant progress and accomplished many key milestones. However, after careful consideration of industry requests and assessment of customer readiness, FRFS has decided to reschedule the Fedwire Funds Service ISO 20022 implementation from March 10 to July 14, 2025. This will provide customers and vendors who are not ready, additional time to better prepare for the transition to the new ISO 20022 format,” the February 13, 2025 announcement stated.
On that Monday (July 14, 2025), barring any further delays, every bank and credit union processing Fedwires, will have to use the ISO 2022 format. The FRFS will sunset the existing proprietary Fedwire Application Interface Manual (FAIM) format and replace all FAIM messages with ISO 20022 messages.
Ryan Waterman, senior product manager at Plano, Texas-based digital banking solutions provider Alkami Technology, provided analysis of the Fed's delayed ISO 20022 implementation for Fedwire.
ISO 20022 Background
The financial services industry’s necessity for a shared “language” led the Geneva, Switzerland-based International Organization for Standardization to launch its ISO 20022 messaging standard in 2004.
Financial services organizations in more than 70 countries currently use the ISO 20022 standard for areas such as payments, securities, trade services, cards and foreign exchange, Waterman explained. These include The Clearing House’s RTP network, which has used the standard since the payment platform launched in 2017. Additionally, the Federal Reserve’s Fedwire Funds Service and The Clearing House Interbank Payments System (CHIPS) plan to roll out the ISO 20022 standard across their systems.
“Broad industry adoption of the ISO 20022 messaging standard and the benefits of its highly structured data made it the logical choice for the FedNow Service, the Federal Reserve’s instant payments infrastructure,” claimed the Fed on its ISO 20022 information Web page. “And because ISO designed the standard to meet the needs of future innovation, it can support the FedNow Service as it evolves and adds capabilities.”
Surprised By Delayed Implementation
“There has been uncertainty within the banking industry for the impending implementation of the ISO 20022 standards,” said Waterman. “In discussions with financial institutions, digital banking leaders and service providers, many have shared their concerns about a lack of preparedness, including not having internal procedures and technology stacks ready to support the new format." Waterman noted some ambiguity regarding the interpretation of how some specific wire transfer instruction information translate from the legacy FAIM format to the ISO 20022 standard. “Given these realities, it is understandable that the Fed chose to delay the implementation.”
Factors Contributing to the New Timeline
“A general lack of preparedness within financial institutions and third-party service providers across the digital banking and financial ecosystem is driving the decision to delay the implementation,” explained Waterman. For example, financial institutions needed to provide an attestation of preparedness to the Fed on January 15, 2025. “However, we have heard that many institutions, varying in size, were unable to meet this deadline.”
Financial Institutions Catching Up?
Waterman assessed how prepared regional and community financial institutions (RCFIs), such as credit unions and banks, are for the Fedwire’s ISO 20022 transition.
“With more time to holistically assess how to approach the transition, financial institutions and vendors alike will now be far more prepared,” said Waterman. “At Alkami, we continue to focus on supporting our digital banking clients through the transition, helping them manage changes in wire information requirements, terminology, and other key areas.”