Technology necessitates change in the ISO 20022 messaging standard
In a recent interview with PaymentsSource, SWIFT’s Head of Standards Stephen Lindsay reflected on the ISO20022 journey and how messaging standards need to keep up with the rapid pace of technological change. This comes as SWIFT is collaborating with a number of international banks and market infrastructures not just to harmonise current messaging standards, but also to advance ISO 20022 deeper into financial frameworks.
Developed 14 years ago, ISO20022 was designed to evolve with technology and business needs – and yet more changes are needed as more open banking standards evolve, such as PSD2 in Europe. "We refer to ISO 20022 as a messaging standard, and indeed it is, but it's based on a common set of business definitions that can be deployed in messages," Lindsay said. "And now what we are working on is to deploy those same business definitions in APIs."
We refer to ISO 20022 as a messaging standard, and indeed it is, but it's based on a common set of business definitions that can be deployed in messages.
In his remarks to PaymenytsSource, Lindsay went on to talk about the push for global adoption of the ISO20022 standard at every point in the end-to-end payment processing chain, and how it is fast becoming the standard for real-time and cross-border payments schemes. In addition, ISO20022 contains richer data to make it clear what the payment is for, who it is for and who sent it, making it easier to spot potentially fraudulent abnormalities.
"The data definitions are much more precise and granular. If you are looking for specific data elements to detect fraud, then you are looking at much higher quality data and you are more likely to spot differences in it."
Although global adoption is gathering speed, banks and other financial institutions need to consider looking beyond treating ISO 20022 as an additional format to be mapped into their legacy formats, and use it instead as the foundation for payment applications.
David Heun - 16 July 2018 - PaymentsSource