A critical aspect of this change is the shift from unstructured to structured postal addresses.
Banks must prepare for ISO 20022 compliance, even if they do not actively use hybrid addresses. You must be able to accept hybrid address formats from other financial institutions and offer customers the ability to send them.
This requires updating customer-facing systems to collect, process, and validate hybrid addresses across multiple banking channels, including:
File-based bulk payments for corporate banking
Fraud and sanctions screening
APIs and Open Banking integrations
Online and mobile banking
Customer support platforms
Impact Analysis: What Systems Will Be Affected?
The transition to hybrid addresses impacts multiple components of your payment infrastructure. Key areas to assess include:
Customer-Facing Systems: Ensure seamless client onboarding and smooth transaction processing.
Enterprise Resource Planning (ERP) & Treasury Management Systems (TMS): These systems typically store customer data in unstructured formats, requiring upgrades to support hybrid addresses.
Back-Office Payment Processing: Payment engines, core banking systems, and compliance solutions must be adapted to accommodate hybrid validation rules.
Risk & Compliance: Fraud detection, sanctions screening, and regulatory reporting mechanisms need to align with new address standards.
Assessing & Updating Your Systems
ERP & TMS Limitations: Most ERP and treasury management systems rely on unstructured address fields, necessitating updates to support hybrid or structured formats.
Validation Rule Adjustments: If your current validation settings only allow structured or unstructured addresses, they must be reconfigured to support hybrid formats.
Compliance & Processing Updates: Transactions from correspondent banks and clearing houses must meet updated compliance requirements.
The Challenge of Updating Customer Data
Migrating existing client addresses to a hybrid or fully structured format is an immense task. Altering customer data could disrupt key postal processes, including checkbook and statement deliveries. Therefore, a strategic, phased approach is necessary.
Download Our White Paper for Expert Guidance
Our white paper, "The Role of Structured Postal Addresses in ISO 20022," provides actionable insights to simplify your transition. Inside, you will learn:
✅ Why Structured Postal Addresses Matter: Improve transaction accuracy, enhance regulatory compliance, and mitigate financial risks.
✅ Hybrid Addresses: A practical approach that balances current banking practices with future industry requirements.
✅ Key Deadlines: Prepare for the critical compliance milestone in November 2026.
✅ Machine Learning Solutions: Learn how Nucleus ISO 20022 Data Fabric can automate and streamline your migration process.
