Nearly half of banks are not on track to meet key ISO 20022 requirements due in November 2026, despite multimillion-dollar migration programmes, according to research from RedCompass Labs.
The study surveyed 308 senior payments professionals across Europe and North America. It examined two priorities for the next phase of ISO 20022 implementation in cross-border payments: moving to structured postal addresses in payment messages, and adopting structured messaging for exceptions and investigations.
The industry reached a major milestone in 2025 when ISO 20022 CBPR+ moved to what is commonly called the end of coexistence. Banks now face further changes that will affect how they format and process data used in cross-border payments.
From mid-November 2026, CBPR+ messages will no longer allow unstructured postal addresses. Banks must move away from free-text address fields and adopt structured address data.
Banks must also support structured ISO 20022 messaging for exceptions and investigations, replacing free-text workflows with standardised CAMT processes. Institutions that do not support the new formats risk payment failures, with knock-on disruption for customers.
RedCompass Labs found that 44% of banks are not currently on track to meet the structured address deadline. Among those behind schedule, 40% described their programme as “recoverable”, while 4% said it was “at risk”.
The research highlights a divide between the largest banks and the rest of the market on whether the deadline is achievable. One in five banks with assets of USD $250 billion or more said the structured address deadline is unrealistic, compared with 5% of smaller institutions.
Data quality and systems readiness were common barriers. On average, 32% of customer address records remain unstructured. Nearly one in ten institutions reported that more than half of their address data is still non-compliant.
Core banking platforms also appear to be a constraint. Three-fifths of respondents said their core banking systems have gaps in supporting structured address fields, suggesting remediation may need to extend beyond payments engines and messaging layers into systems of record and customer data stores.
The study also assessed readiness for changes to exceptions and investigations handling, which often affects operations teams and customer service as well as payments technology. Just over a quarter of banks (27%) said they were only partially ready to receive structured ISO 20022 exception and investigation messages.
Many institutions are taking a narrow approach. The research found that 45% are pursuing minimum-compliance changes to exceptions and investigations workflows rather than broader operational reform. Only 10% reported pursuing major transformation of these processes.
Programme structure may also be slowing delivery. A majority (61%) said they are implementing ISO 20022 reforms through multiple parallel initiatives rather than a single consolidated programme. This fragmentation can increase coordination needs across technology teams, operations, compliance and data owners.
Investment is already significant across the sector. Most banks reported spending around USD $20 million to meet the 2026 requirements, while larger institutions said they are spending more than USD $30 million.
Banks also reported adding staff. On average, they are deploying 13 dedicated team members to support delivery. Nearly two-thirds (64%) said they have allocated between six and 20 specialists to ISO 20022 programmes.
Even with that level of spend and resourcing, many banks still appear to view the work as mandatory rather than strategic. Almost half (48%) described structured address migration as purely a regulatory requirement.
Pratiksha Pathak, Partner and Head of Payments at RedCompass Labs, said banks should not treat the 2025 milestone as the end of the transition.
She warned that enforcement will bring operational consequences.
“Once enforcement begins, systems will not accommodate incomplete data. Payments can be rejected, exception volumes can increase, and operational strain will rise quickly. That could mean major disruption and unhappy customers,” she said.
Looking beyond the immediate deadlines, she described the next phase as a sector-wide effort with long-term implications for how banks manage change in payments.
“ISO 20022 is now a multi-billion-dollar transformation. It must be taken seriously. The institutions that industrialise change now will be in a far stronger position than those relying on last-minute compliance,” she said.…Read more by Shannon Williams