The global migration to ISO 20022 has transformed how payment data is structured and exchanged. While the standard introduces richer, more granular information, it also creates new challenges for AML and sanctions screening systems that were designed around older message formats.

For compliance teams, the issue is not simply adopting a new standard, but ensuring that screening controls can correctly interpret, extract, and apply risk logic to ISO 20022 data without increasing false positives or missing risk.

What The Challenge Is

ISO 20022 payment message screening refers to the difficulty of accurately screening payments that use the ISO 20022 messaging standard. These messages contain more structured fields, nested data elements, and optional information compared to legacy formats such as SWIFT MT. 

If screening systems cannot reliably parse and contextualise this data, critical risk indicators may be ignored or misinterpreted.

Why It Exists

This challenge exists because many screening engines were built for flat, predictable message structures. ISO 20022 introduces flexible schemas that vary by payment type, market practice, and implementation phase.

Inconsistent adoption across payment rails and jurisdictions further complicates screening, as firms may need to support multiple formats in parallel during migration periods.

Operational Impact

Poor handling of ISO 20022 messages increases investigation time and operational complexity. Analysts may be forced to review alerts with incomplete context or miss relevant data that was not screened correctly.

At scale, this leads to higher alert volumes, inconsistent outcomes, and increased regulatory risk, particularly as real-time and cross-border payments rely more heavily on ISO 20022 data.

Why Legacy Approaches Fail

Legacy approaches often rely on fixed field mappings and rigid parsing logic. When applied to ISO 20022 messages, these systems struggle to identify where relevant names, identifiers, or narrative information reside.

This results in partial screening, duplicated alerts, or blind spots that are difficult to detect until issues emerge during audits or supervisory reviews.

What Effective ISO 20022 Screening Looks Like

Effective ISO 20022 screening correctly interprets structured and unstructured data elements, applies consistent risk logic across message variants, and maintains full traceability of screening decisions.

Compliance teams can demonstrate that richer data improves risk insight rather than increasing noise, supporting both operational efficiency and regulatory confidence.

How It Can Be Solved (Process And Technology)

From a process perspective, firms need clear ownership of payment data standards, documented field usage, and close coordination between payments, technology, and compliance teams. 

From a technology perspective, capabilities associated with Payment Screening and Transaction Monitoring support schema-aware parsing, field-level screening, and consistent audit trails across ISO 20022 messages.

Learn More

For authoritative context on the ISO 20022 standard, review the SWIFT ISO 20022 Programme and payment system migration guidance published by the Bank Of England On CHAPS ISO 20022.