ISO 20022 Standards - An Opportunity to Change
by Brian Wedge, Global Product Manager, JPMorgan Treasury Services
It’s hard for most people to get excited about a standard - especially when it rejoices in the title of ISO 20022 - but this new standard for financial messaging is quietly gaining acceptance, and does have the potential to bring significant efficiency gains to all of the stakeholders involved in our payments ‘ecosystem’.
Messaging standards developed under ISO 20022 have been published and are indeed in use today.
Many of us in the payments business have recognised for some time that our current standards have severe limitations and have failed to keep up with changes which our industry has seen in the past 10 to 20 years. In addition, many of them are country-specific and not well-suited to the volume of cross-border activity we see today and which will only increase further in the future. With this in mind, a dedicated group of standards-enthusiasts have been hard at work - mostly on a voluntary basis - to create a set of standards appropriate for (at least the first decade of) the 21st century.
Whilst ISO 20022 is a broad family of standards covering the financial services industry, here we will only consider the subset which relates to making and reporting payments.
What is the scope?
In the payments-related domain, ISO 20022 covers the initiation of payments (in both the customer-to-bank and the bank-to-bank arenas) as well as bank account reporting and transaction advising. Payments can be divided into Credit Transfers and Direct Debits - the standard covers both of these, as well as additional related activities such as returns, mandates, cancellations, etc. Reporting can be broken down into payment status, account balances and transaction details in both intra-day and end-of-day situations - again the standard covers all of these. Thus it is an alternative to (or replacement for, depending on your perspective) all or parts of existing standards including SWIFT MT messages, EDIFACT, BAI, AFB, ANSI and also some proprietary standards such as SAP’s iDOC.