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Chinese central bank urges local banks to embrace international financial standards

SWIFT and People’s Bank of China collaborate to facilitate China’s integration in the international financial market

Published on 22 Jun 2010
“The adoption of ISO 20022 is a strategic move for the entire Chinese financial community to achieve interoperability across systems, efficiency, information sharing and to allow better collaboration and competition with international financial institutions worldwide,” said Li Dongrong, Assistant Governor, People’s Bank of China (PBOC), in his opening speech at the Standards Forum in Beijing on 19 May.

As Kineth Yuen, Standards Manager, SWIFT explains, “The Chinese are particularly interested in the issue of standardisation, and they look to SWIFT as their on-the-ground experts to make sure both domestic market practice and international interoperability are defined and integrated within the domestic industry.”

“This event was an important symbol, showing publicly that the Chinese are engaging in the global standardisation discussion, through SWIFT, and in turn are leading the entire Chinese domestic industry in this direction,” says Michael Cheung, Head of North Asia, SWIFT.

In his speech, Mr Li explained how the implementation of financial standards was a key element to the healthy development of the domestic financial industry in the long term. “At the moment,” he said, “China's financial sector is gradually integrating into the international financial market environment.” He therefore urged Chinese banks to accelerate the pace of their standardisation as it will allow them to improve their overall competitiveness on the international stage.

“PBOC decided to adopt ISO 20022 in its core systems including CNAPS II, ACS and bond systems, which set an example for the whole financial industry,” he told the audience.

Mr Li also stressed how in recent years, PBOC actively promoted the development and implementation of national financial standards. “Today China has 41 national standards for the financial industry and PBOC has published another 77 industry standards. We are also keeping track and are following international standards,” he said. According to Mr Li the next challenge for PBOC will be the practical application of ISO 20022. He further reinforced the central bank’s commitment to promote financial standardisation to relevant stakeholders.

Supporting our community to implement standards

Sponsored by the central bank and organised by SWIFT’s Beijing office, the Standards Forum Beijing attracted 139 senior delegates from the State Administration of Foreign Exchange, domestic banking institutions, China Union Pay (the only domestic credit card organisation in China), and several trading and clearing centres. The goal of the all-day event was to increase the community’s understanding of ISO 20022, highlight the leadership of the PBOC in terms of ISO 20022 adoption, and encourage ISO 20022 implementation and usage by financial institutions in China.

Standards experts from SWIFT, as well as ISO experts from the industry — Karla McKenna, Chair of ISO TC68 – Financial Services, Robert J. Blair, Vice Convener of the ISO 20022 RMG and Payments SEG, and Masayuki Tagai, Japan representative to the ISO 20022 Payments SEG — updated participants on the ISO 20022 organisation, its methodology and benefits and the latest development in payments. They also presented a case study about the adoption of global standards in the Japanese Zengin system through user collaboration and explained how SWIFT supports the financial community in adopting ISO 20022.