Correspondent banking is undergoing a data revolution. In coming years the community will make significant investment in improving the quality and richness of data in domestic and cross-border payments. Together we will reduce manual interventions and costs, improve automation and speed of settlement, better mitigate risks of financial crime compliance, and support our clients with faster reconciliation and business solutions.
Welcome to our first edition of “ISO 20022 in bytes”, a new publication featuring best practices and insights from practitioners and partners in their journey to better data and better payments.
Better data from Down Under
Greg Johnston, Head of Payments Settlements, Reserve Bank of Australia
Migration to the ISO 20022 standard is an important strategic step forward for the Australian payments system. It will modernise the way high value payments are exchanged and enable broader changes that will support the efficiency of the overall payments system.
Australia’s domestic migration project commenced in February 2020 following a period of industry consultation. It is a major undertaking for the industry that will require significant cooperation and leadership to meet the start of a two year co-existence period that begins in November 2022. All stakeholders, including system participants, AusPayNet and the Reserve Bank of Australia will play a key role in its success. Accordingly, an Industry Steering Committee comprising executives from each stakeholder group has responsibility, accountability and authority for the project’s delivery. I look forward to working with members of the Industry Steering Committee and their broader project teams on this important project.
Once implemented, the benefits of the migration will extend beyond the efficiencies of harmonised message formats, and enable the high value payments system to be more responsive to new technologies and more resilient. The welcome support from industry to adopt enhanced message content will also help efforts to combat financial crime and foster innovative new services.
Andy White, CEO of Australian Payments Network
The migration of Australia’s high value payments to ISO 20022 provides an important strategic opportunity. Domestically we aim to harmonise the messaging standard with our real-time, retail payments system, the NPP. With that comes the potential for payment flow to be determined by business needs (for liquidity, for immediacy) rather than by the messaging infrastructure itself. With it also comes the potential for the two systems to provide overarching redundancy for the transactions that traditionally flow through each of them, thereby increasing overall systemic resilience.
Internationally, it also offers an opportunity to harmonise with the messaging used cross-border. And with that comes the potential for simpler, more efficient, lower risk cross-border payments which ultimately feed into those domestic systems. Importantly in realising this opportunity, the industry in Australia has already agreed to align our project timeline with the one for the cross-border migration. This will ensure data can be carried end-to-end and is facilitated by a co-existence period with the current MT service to allow banks to adopt the standards at a time that suits them within that co-existence period.
More generally the richer, more structured data enabled by the ISO 20022 standard will improve solutions around fraud, scams, KYC, AML and sanctions screening. It will also enable innovation, in ways we haven’t yet thought of!
The project is already well underway and resourced both in terms of the project management office and subject matter experts across the industry. AusPayNet looks forward to driving the project forward and realising the strategic opportunity it presents.”
ISO Programme status update
CBPR+ Phase 1 & Phase 2 specifications published
The Cross Border Payments and Reporting (CBPR+) working group members are experienced correspondent banking practitioners and country representatives from around the globe. They advise SWIFT and with consensus, define how ISO 20022 should be used to transition from current MT to the new language of payments.
The group has completed Phase 1 and Phase 2 specifications for the CBPR+ market practice and published in MyStandards. These are the specifications that will be used to launch ISO 20022 in correspondent banking in November 2022. The specifications are being tested and the group continues to review maintenance and potential new functional change requests. Financial institutions should plan their projects based on these specifications and prepare now for adoption.
First FI-to-FI messaging service is live
The first general purpose FI-to-FI messaging service since FIN was launched on the TCP/IP network in 2003 is now live, supporting exchange of structured ISO 20022 messages. FINplus uses SWIFT’s most advanced messaging technology and provides non-repudiation, more space for structured data, message validation, copy services and more. The service is live and supporting European regulations and will be used for CBPR+.
Hungry for more?
- The ISO 20022 Programme Hub on swift.com links you to every resource you need
- Check out SWIFTSmart for courses on ISO 20022/CBPR+ content
- Visit MyStandards CBPR+ group for usage guidelines, User Handbook and other resources
- Get ready for ISO 20022 messaging and order FINplus
Budget and plan your implementation
To support you in budgeting and planning your projects for 2021 and onwards the ISO 20022 Programme 2021 Budget Reference is available on swift.com. The tool provides status of the current cross-border implementation roadmap, upcoming SWIFT releases and guidance to structure and plan your own adoption.
SWIFT’s Partner Programme continues to provide everything that a third-party Payments application and/or connectivity provider needs to adopt ISO 20022 in compliance with the CBPR+ usage guidelines. All the information, specifications and details of compatibility labels can be found on the Vendor Readiness section of the Programme Hub.
Registered providers that have successfully uploaded CBPR+ compliant messages to the Vendor Readiness Portal can self-attest that their product is ‘ISO 20022 CBPR+ ready’. Self-attestation is free and is the best way to promote a product’s CBPR+ readiness to the global payments community. To date, 10 registered providers have self-attested readiness with a further 58 currently performing testing. Self-attested CBPR+ ready providers are listed on the CBPR+ self-attestation page.
Progress in the regions
It is no surprise with Asia’s diversity ISO 20022 was early adopted by domestic market infrastructures to support regional harmonisation and integration. Major economies such as China, India, and Japan started the adoption of ISO 20022 in 2012. Today most of the regions’ financial centres have announced their plans to go live on ISO 20022 for high value payments, including Singapore, Philippines, Thailand, Australia, New-Zealand, Hong Kong and Malaysia. Alignment of cross-border and domestic practices is essential to ensure that data is interoperable end-to-end.
Over the last months, SWIFT has been actively engaged with domestic communities, including China, Japan, Australia, to present the new ISO 20022 roadmap and the benefits of the Transaction Management Platform to support the upcoming coexistence period. SWIFT also joined forces with Standard Chartered bank, Infosys or EY to promote the ISO programme through academy or webinars, reaching about 700 delegates through virtual and engaging round tables.
Americas and UK
Given the challenges of the global COVID19 pandemic, the AMUK region has continued to reach out to our member community remotely in order to continue to drive ISO 20022 awareness of CBPR+ adoption beginning November 2022.
As updates to adoption plans come from major market infrastructures such as the ECB, Bank of England, and others, as well as SWIFT’s updated adoption plan and Transaction Management Platform, our teams in the UK, North America and Latin America continue to engage our customers with bilateral meetings and focused community events, including a recent update to the Puerto Rican Banking community and participation in ISO 20022 related events hosted by our member banks.
With SEPA, SCT Instant and T2S already using ISO 20022, SRDII going live this year, T2 and CBPR+ now both aiming to adopt ISO 20022 in 2022, the whole continent is now en route for a structural shift towards a large scale adoption of the standard. From a regulatory standpoint, ESMA is also ISO 20022 enabled.
Data remediation and the leveraging of ISO 20022’s richer and more structured data for new value added services will be key priorities for the continent over the coming years.
Over the last months, SWIFT has been actively engaged with individual customers, vendors and domestic communities to present and collect valuable feedback on the updated ISO 20022 roadmap and the Transaction Management Platform. We have produced webinars on ISO 20022 in various languages, all of which are available on the swift.com.
SWIFT has been actively collaborating with the Payment Association of South Africa and SARB on the RTGS renewal and the ISO 20022 adoption which are due to go live in November 2022.
We have also been engaged on the ISO 20022 awareness campaigns in Kenya, Ghana and Nigeria, with the support of the local Central Banks. The three countries are looking into a common implementation of ISO 20022 to mutualise the costs.
Over the last months, SWIFT has also been actively engaged with domestic and regional communities, including Zambia, Botswana, Namibia, Lesotho and Seychelles, to name a few, to present the updated ISO 20022 roadmap and to consult on ISO 20022 topics. CBPR+ is the main driver for the domestic adoption of ISO 20022 within those countries.
Sibos is digital this year; go to www.sibos.com to register for a week of compelling and fascinating insights from leaders across our landscape. The ISO 20022 Programme will host one session, discussing progress so far, as well as exploring how the ISO 20022 Programme and the new transaction management concept will deliver enhanced benefits and reduced disruption to the community.
We will shortly start posting a series of briefings, each of which is designed to provide details of the programme and its expected impacts for the entire community. The first of these will be published on the ISO 20022 Programme Hub on swift.com in September.
There is also a new case study by Citi on the ISO 20022 Document Centre. Citi and other leading banks are seeing ISO 20022 as a platform for improving the quality of the payments process, and for innovation of new and valuable customer outcomes. Download and read it here and watch for more thought leadership pieces from global and regional banks over the coming weeks!
Meet SWIFT’s ISO Programme Team
The global ISO 20022 Programme team at SWIFT is led by Saqib Sheikh, based in the US. Other team members are based all over the world - in the UK, Belgium, Australia, Hong Kong. It is truly a challenge to bring everyone together for checkpoint calls !