Executive Summary
The financial industry is transitioning to the ISO 20022 standard, impacting cross-border and domestic high-value payment schemes. This migration mandates the use of structured postal addresses to replace the currently used unstructured formats in MT/FIN messages by November 2026. The adoption of structured addresses enhances transaction efficiency, security, and regulatory compliance, aiding in AML, KYC, and sanctions screening. Key aspects of the whitepaper include:
1. Importance of Structured Postal Addresses: Structured addresses are essential for accurate identification and processing in financial transactions.
4. Implementation Timelines: By November 2025, SWIFT will update message sets to include hybrid address options, with a one-year grace period allowing all address formats. From November 2026, unstructured addresses will be discontinued, favoring fully structured addresses and allowing hybrid addresses.
2. Hybrid Address – A new concept: Hybrid addresses combine structured elements (Town Name and Country) with limited unstructured elements (AddressLine), facilitating a transitional phase towards fully structured addresses.
5. Complexities and Risks: The flexibility of hybrid addresses result in a lack of standardisation which introduces complexity and risks due to factors like variations in guidelines and implementation methods across different market infrastructures, and entities impacting multinational corporations and retail accounts.
3. Industry Drivers: Compliance with FATF Recommendation 16, BIS & G20 Cross Border Program, and Wolf Berg Payment Transparency Standards necessitates the inclusion of structured postal addresses in payment messages.
6. Machine Learning Solutions: Machine learning models, such as Nucleus ISO 20022 Data Fabric, can facilitate the migration by parsing and standardizing unstructured address data into hybrid and fully structured formats.
Structured Postal Addresses
The payments world is in the process of migrating to ISO 20022 for both Cross-Border (Swift CBPR+) and Domestic HVPS+ schemes, with support for the widely used unstructured address formats in todays MT / FIN messages scheduled to be discontinued from November 2026.
The role of accurately structured addresses is critical for ensuring efficient and secure transactions. In addition to obvious improvements in Transaction Processing, the incorporation of structured address fields in ISO 20022 messages will play an essential role in accurately identifying the parties involved in payments by verifying Debtor (Sender) and Creditor (Recipient) identities, in turn aiding regulatory compliance such as AML, KYC & Sanctions Screening.
Structured Postal Addresses
While the immediate size, must now adhere to either on the SWIFT network.
This mandate is expected to extend to the trade sector in the coming years.
Hybrid Addresses – A New Concept
The CBPR+ and HVPS version of ISO 20022 as outlined in the market practice guidelines on structured customer data prohibits mixing of different data elements in one structured element. However, most corporates and financial institutions have their customer address data elements in an unstructured database format. For example: postal addresses. This has led to the creation of a new model called “hybrid addresses”.
Unstructured vs. Hybrid vs. Fully Structured Addresses
Definitions of the different levels of structure in postal addresses in the context of ISO 2002 and key timelines.
Structured Address
To align with HVPS+ and CBPR+, where a fully structured address is used it must contain a minimum of Town Name and Country. A fully structured address cannot contain the (unstructured) ‘AddressLine’ element.
Hybrid Address
A hybrid address must include the Town Name and Country elements, but it will also allow the (unstructured) ‘AddressLine’ element to be included, subject to a maximum of two occurrences, with up to 70 characters permitted within each occurrence.
A fully unstructured postal address uses only the Address Line element. Three occurrences of the AddressLine element with up to 35 characters are permitted. This format will completely be discontinued from 2026.
Unstructured Address
Industry Drivers
FATF Recommendation 16 on Payment Transparency
BIS & the G20 Cross Border Program
Wolf Berg Payment Transparency Standards
The FATF, in line with the R16/INR.16 revisions, plans to enhance the quality and content of originator and beneficiary information in payment messages. The key proposed change is the mandatory inclusion of addresses for both originators and beneficiaries.
Requirements 9 and 10 of CPMIs report emphasize the standardized, structured, and detailed identification of entities and individuals.
Requirement 11 focuses on ensuring a common minimum level of structured postal address information.
In 2023 Wolfsberg updated their payments transparency standards, directing all institutions to embed the usage of ISO 20022 terms with specific focus on postal addresses with a view to improving Sanctions Screening, AML and CTF monitoring.
Industry Drivers
In-country / Currency Specific Regulations
Industry Timelines
Industry Timelines
As part of its ISO 20022 release schedule SWIFT will update the current CBPR+ pacs, camt and pain message sets in November 2025 and introduce hybrid (semi-structured) postal address options.
During the one-year grace period, beginning November 2025 a fully unstructured address or fully structured address or hybrid address will be allowed, except for ultimate debtor, ultimate creditor and initiating party where only fully structured address or hybrid address is allowed. The unstructured
Address Line element within the hybrid address can be up to 2 lines of 70 characters (2*70).
Industry Timelines
Statements (camt.052, camt.053) and debit/credit notifications (camt.054) will also be updated to accommodate all address options but will not restrict usage of the three options at any stage. Other address formats will also be permitted on statements and debit/credit notifications. This change is mandatory for all users of CBPR+ usage guidelines.
Effective November 2026, fully unstructured address will no longer be permitted. These changes will be part of the SR 2026 changes.
Complexities & Risks in Adoption
While Hybrid addresses offer a transitional solution for financial institutions worldwide, the long-term objective should be the migration to fully structured addresses. The flexibility of Hybrid addresses, which allows for free-text fields, results in a lack of standardization. This lack of standardization impedes accuracy and eventually undermines many of the benefits provided by ISO 20022, particularly in areas such as automation and data intelligence.
Complexities & Risks in Adoption
Corporate Migration to pain.001
Version 9: Most corporations have adopted pain.001 version 03 and have yet to transition to version 9.
Variation in Address Options
Implementation: Implementation methods for address options will differ across entities.
Multinational Corporates Seek Simplified
To avoid complexities, multinational corporates are expecting ERP/TMS providers and account operators to provide a solution.
Retail accounts: The complexity extends
beyond corporates, as the mandate also applies to retail customers.
Diverse RTGS / ACH Guidelines: Market infrastructures and Automated Clearing House (ACH) guidelines vary regarding
Implications of Failing to Implement
From November 2025, a ‘hybrid’ address will be enabled for all agents and parties where an address can be included, but fully structured addresses will be encouraged by most market infrastructures.
From November 2026, unstructured addresses will be rejected. Hybrid and structured addresses will continue, and fully structured addresses will be encouraged.
Simplifying The Move With Machine Learning
Global address restructuring is a complex task, with multiple common complexities affecting financial institutions.
As the complexities of migrating addresses to both Hybrid
/ Fully Structured variants are significant, financial institutions around the world are now looking at options that will allow them to undertake the migration in one-go to both formats.
Simplifying The Move With Machine Learning
Machine learning models and applications such as Nucleus ISO 20022 Data
Fabric, trained on millions of data points, across countries, and from different formats can (amongst other things) help meet the requirements to restructure
postal addresses to both Hybrid and Fully Structured formats with minimum
Simplifying The Move With Machine Learning
Address Parsing & Standardization
Nucleus is pre-trained on vast amounts of address data, following different formats, allowing its Structured Address Parser module to:
• Connect to multiple unstructured address sources within a bank / financial institution.
• Read and parse free-format addresses.
• Identify the country that a specific address belongs to, and align the parsers mapping engine
accordingly to country-specific address formats, accurately identifying ISO 20022 specific granular address tags.
• Generate structured output addresses in ISO 20022 specific Hybrid and Fully Structured formats.
In addition to fixing global address problems, Nucleus also helps financial organisations with other structured data mandates and data truncation management risks related to ISO 20022 migrations.
Improving Data Quality
• Machine Learning can be used to identify inconsistencies and missing information in addresses. By identifying country-specific patterns, ML can suggest corrections and even predict missing elements based on context.
• Nucleus has the ability to execute real-time address lookups for data enrichment, however for the purposes of fixing / meeting global Hybrid and Structured Address requirements, this feature should be considered as optional.
About Delta Capita
Delta Capita, the Financial Services business of Prytek, is a leading Consulting, Managed Services and Technology provider with a unique combination of FS experience and tech innovation capability.
Reinventing
Services: We provide solutions ranging from Resource Augmentation through to fully tech-enabled, Mutualised Managed Services. We currently provide services in Client Lifecycle Management, Post Trade, Structured Products, Pricing & Risk and Market Infrastructure.
Mutualised Managed Services: Our vision is to reinvent the Financial Services Value Chain. We leverage our industry expertise, proprietary technology & investment capital, and work with our clients to:
► Replace high-cost, non-differentiating in-house platforms with our Mutualised Managed Services to reduce costs and improve efficiency.
► Identify valuable technology assets, supporting non-differentiating functions, which can be commercialised in a joint venture.
► Consulting: We provide a proven advisory and transformation execution capability, which can accelerate the delivery of change programmes from inception through to benefits realisation.
About Nth Exception
• Nth Exception is a boutique payments technology and consulting firm, specializing in ISO 20022. Our payments-anchored capabilities are designed to assist banks in providing their corporate and financial institution customers with greater efficiency, control, and value from payments.
• As specialists in SWIFT messaging, ISO 20022, and alternative payment methods, we work with customer organizations worldwide to help them navigate complex messaging standards and meet the intricate requirements of different schemes and market infrastructures.
• Our expertise enables customers to better manage uncertainty, improve business connectivity and continuity, reduce operational costs, and eliminate barriers to profit in the fast-changing payments landscape.
Supriya Dahiwelkar / Michael Levens
Delta Capita Limited,
#40 Bank Street, Canary Wharf, London, E14 5NR
Email: supriya.dahiwelkar@deltacapita.com
michael.levens@deltacapita.com
Hannah Davis / Akhil Rao
Nth Exception Limited, # 71-75 Shelton Street, London, WC2H 9JQ
Email: hannah@nthexception.com akhil@nthexception.com