Payments evolution with ISO 20022

The move to ISO 20022 is reaching a key milestone. From November 2026, fully unstructured address data will no longer be allowed in international payments.

Banks and corporates will need to adopt hybrid or fully structured formats, with direct implications for processing efficiency, screening, settlement predictability, and customer experience.

This is not a late-2026 issue to defer. Institutions that treat the change as a narrow compliance exercise risk higher exception volumes and weaker straight-through processing. Those that act early can use the transition to strengthen data quality, automation, and resilience.

KPMG’s view is that fully structured addresses are the strategic end-state. Hybrid can be an effective route to compliance, but fully unstructured data will not remain a viable option beyond November 2026.

Explore the insights below to understand further why the upcoming deadline is important for banks and corporates, and why structured data remains the most sustainable path forward.

Shane Garahy

Partner, Risk Consulting

KPMG in Ireland

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The problem – and what changes in November 2026

ISO 20022 is raising the standard for payments data. It is designed to improve interoperability, automation, and data quality across the payments ecosystem, with one of the clearest impacts seen in how party and address information is captured and processed.

Historically, international payments have relied heavily on unstructured address data. While flexible, this has also driven inconsistency, manual intervention, weaker screening, and lower straight-through processing. Banks have often compensated through repair and exception handling, absorbing cost and risk in the process.

In practice, institutions have operated with three address models: fully unstructured, hybrid, and fully structured. The key change is that from November 2026, fully unstructured addresses will no longer be permitted in international payment messages. Banks and corporates will therefore need to ensure payment flows are supported through one of the remaining models:

Fully structured addresses, where address information is provided in a clearly structured format.
Hybrid addresses, where key address information is structured and the remaining detail is provided in limited free text.

This deadline places new obligations on both originators (corporates) and intermediaries (banks). While schemes and market infrastructures may differ in implementation detail, the direction of travel is consistent globally: payment data quality is increasingly enforced rather than left to manual repair and interpretation.

The impacts of ISO20022 address migration

The move away from fully unstructured address data has implications across the payments value chain. For corporates, it increases the importance of payee data quality, ERP and treasury readiness, and closer alignment with banking partners. For banks, it requires stronger client education, better controls at initiation, and changes across channels, validation, screening, and operations.

The direct consequences of inaction are clear: more friction, lower straight-through processing, higher repair volumes, and greater operational and compliance risk. ISO 20022 does not just improve payments data; it shifts responsibility for data quality closer to the point of origin.

The three strategic response options for banks

Banks have three broad response options, each with different cost, risk, and client impact.

Option	Description	Benefits	Challenges	KPMG view
Option 1 – Mandate fully structured addresses	Banks require corporate clients to submit fully structured address data at source.	Maximises STP uplift and operational efficiency Improves screening accuracy and reduces compliance risk Fully aligns with the long‑term ISO 20022 vision	Significant change and investment required from corporates Demands strong client engagement, tooling and transition support	Target end‑state. This is the right destination, but many institutions will not reach it in a single step.
Option 2 – Hybrid model with validation and enrichment	Banks mandate a minimum level of structured data and apply validation and enrichment to improve remaining address data	Faster route to compliance with improved data quality Protects STP rates during transition Limits disruption for corporate clients	Requires investment in enrichment, data quality and monitoring capabilities Does not remove the need for longer‑term structural remediation	Pragmatic middle ground. This approach helps institutions manage the transition while improving data quality.
Option 3 – Absorb the change within the bank	Banks continue to accept inconsistent client data and manage impacts internally.	Minimal short‑term disruption to clients	Lower STP rates and higher repair volumes Increased operational cost and compliance risk Missed opportunity to modernise data foundations	Highest‑risk option. Not sustainable in an ISO 20022 environment.

KPMG’s recommendation

We see fully structured addresses as the strategic end-state. For many banks, the most effective path will be phased: stabilise ahead of November 2026 through hybrid approaches where needed, strengthen data quality and control, and move clients progressively towards fully structured submission. Hybrid can work, but it should sit within a clear target-state for client adoption and data quality.

The question is not whether banks move away from fully unstructured addresses, but how quickly and how confidently they do so.

Why the time to act is now

November 2026 is a clear deadline, but the bigger risk is delay. Corporate remediation, testing, channel changes, and client education all take time. Institutions that act early retain control; those that wait risk being pushed into reactive and sub-optimal solutions.

How KPMG can help

KPMG has supported ISO 20022 and payments modernisation programmes globally across clearing systems, correspondent banking, and corporate channels. Our approach combines:

Proven accelerators for ISO 20022 impact assessment and remediation
Data and implementation specialists with deep payments expertise
Validation, enrichment and data quality frameworks
End‑to‑end delivery, from strategy through build and implementation

We can help you design practical responses that protect today’s operations while improving long-term data quality and control.

Get in touch to prepare for ISO 20022

The end of fully unstructured address data in November 2026 is more than a compliance milestone. It is a strategic forcing function for banks and corporates to improve data quality, reduce friction, and strengthen resilience. Those that act now will be better placed to capture the value of ISO 20022.

At KPMG we understand the pressure business leaders are under to get it right on payments. To find out more about how KPMG perspectives and fresh thinking can help your business please contact our team today. We’d be delighted to hear from you.