ISO 20022 XML – the story so far is more than just SEPA!
by Mark Sutton, Head of Client Integration Consulting Global Transaction Banking, HSBC
Whilst the ISO 20022 XML journey only really started in June 2003, at SWIFT’s offices in La Hulpe, the progress in terms of harmonisation, coverage and most importantly adoption, has been amazing. Initially driven by a section of the corporate community under the RosettaNet PMP (payment milestone program), it embraced contributions from all of the major stakeholders – the banks, the software vendors, the standards organisations and the corporate community. The primary objective was to drive a single payment standard that could be used globally by any corporate, irrespective of size and sector and by any servicing bank regardless of location.
So what challenges did this collaboration on standards seek to address?
In the beginning and before the revolution in the corporate to bank environment, there was significant complexity. This was a direct consequence of the implementation of proprietary standards and proprietary banking technology.
It is widely acknowledged that there are three core components in the customer to bank space, which cover the following aspects:
- Connectivity: This covers the physical connection to your banking partners, which could be browser or host to host based.
- Security: This covers the physical security around the file transfer process. This is a key requirement to protect the integrity, authenticity, confidentiality and non-repudiation of the underlying file.
- File Format: Which covers the message structure that is used to support the transfer of the payment initiation data.
Figure 1 provides a simple overview of the customer to bank challenge for the multi-banking corporate customer: multiple connections, with each interface typically requiring a different file format and sometimes a different security protocol.