Two stops: Singapore and Beijing
The scores of initiatives sprouting up in the Asia Pacific region present an excellent occasion to raise awareness about ISO 20022 and to engage with the local community. Below is an abstract of the topics that were debated at Standards Forums held at two venues in Asia earlier this year: Singapore and Beijing.
11 March 2014: Singapore Standards Forum
David Soh, United Overseas Bank and Eddie Haddad, SWIFT opened the session and welcomed a packed room of over 80 participants from banks, corporates, market infrastructures, financial and software vendors to the Standards Forum.
ISO 20022 high on the agenda
In the post trade session, which was the highlight of the event, Nico Torchetti, Singapore Exchange – SGX, explained that SGX is adopting ISO 20022 to develop a new state of the art clearing and depository system. “Adopting ISO 20022 will make SGX one of the first movers in the market”, he said. Peter Shen, SGX, told the audience that SGX is also adopting ISO 20022 for corporate announcements.
Who is driving ISO 20022 adoption? Harry Rana, Sungard and Chueh Jyi-chen, Standard Chartered Bank, confirmed that ISO 20022 adoption is mainly driven by market infrastructures.
During the panel discussion about ISO 20022 adoption by corporates, delivered by Peter Hoogervorst, Standard Chartered Bank and Chung Chee Kai, Maybank, complemented this view and added that corporates are also in the driving seat: “Client demand to use XML in messaging has led banks to agree on one standard: ISO 20022”, they said.
Kiyono Hasaka, a member of SWIFT’s standards team in Singapore, delivered an update on ISO 20022 payments adoption in the APAC region. In the context of the growing importance of the Chinese Yuan (CNY) off-shore market, Zhang Yi, ICBC Bank said “it will help to reduce transaction cost for RMB settlements and enlarge Singapore’s RMB cash pool.”
Regulation and compliance opportunities
On the regulatory side, Alexandre Kech, SWIFT, discussed the Legal Entity Identifier (LEI). This was echoed by Peter Tierney, DTCC, who explained that there has been a push in the adoption of standard international identifiers (eg: LEI, UTI, UPI) and that there is a need for standards to handle trade reporting requirements. Simona Catanescu, SWIFT shared how SWIFT can assist institutions in the regulatory area.
ISO 20022 is a reality in Singapore
The concluding debate circled around ISO 20022 as the future standard in this region. It resonated unanimously that “ISO 20022 is happening. It is a reality.”
14 August 2014: Beijing Standards Forum
The Standards Forum returned to Beijing, China after its inaugural event four years earlier. Michael Cheung, SWIFT, welcomed close to 100 participants from various major financial institutions, corporates, regulators and software vendors to the event.
ISO 20022 adoption trends
Kineth Yuen, SWIFT, explained what ISO 20022 is and what its merits are, stressing the importance of market practices. Following suit, Eric Yang, SWIFT, stated that initiatives such as SEPA, T2, CPA, India RTGS, RBA NPP and SGX post-trade were evidence that ISO 20022 adoption appeals to market infrastructures who are keen to renew legacy systems, modernise their services and offerings, and to remain aligned with international standards.
Jackie Xu, Citibank, and George King, Bank of America Merrill Lynch, presented how ISO 20022 permits corporates and banks to achieve significantly greater efficiency. Mr King presented a case study featuring SAP, who pioneered ISO 20022 XML for payments in Asia and EMEA and created a single payment format that can be used across its business units globally using CGI-MP (Common Global Implementation - Market Practice), an industry collaboration involving standards bodies, banking associations, vendors, corporates, etc.
Kineth Yuen, SWIFT, spoke about two industry initiatives that go hand in hand: a first one to define off-shore CNY guidelines and another to build an electronic equivalent of the Chinese Commercial Code (CCC) tables. Via translation, this will allow institutions to use Chinese calligraphy in SWIFT MTs.
Moderated by Angeline Tan, SWIFT, a panel consisting of Li Shuo, Bank of China, Thomas Ng, Bank of Tokyo-Mitsubishi UFJ, and Kathy Tan, ANZ, shared their experiences with the Bank Payment Obligation (BPO), which offers an alternative and very efficient means of settlement in international trade.
Yang Qi Yan, Bank of China, presented the business highlights behind a number of SWIFT's Category 7 standards updates, which are under preparation by a working group of industry experts. The SWIFT community will determine when these enhancements will go live, which will be Standards Release (SR) 2016 at the earliest. Ms Tan summarized the highlights of the SR 2014, which will impact almost all message categories.
In conclusion, as aptly put by Mr Eric Yang in his earlier session, all organizations have common challenges, such as upgrading their systems, meeting regulatory needs, modernizing infrastructure. "SWIFT", he said "is delivering unique solutions to these common challenges."
Next stop: Boston
The Standards Forum is now heading to Boston, Sibos, from 29 to 2 October 2014.
More than 60 industry voices will share insights, experiences and opinions on how standards can help tackle some of today's most pressing challenges, such as regulatory compliance, risk management and the need for innovation. Additionally, the Forum will undertake a comprehensive ISO 20022 industry scan, focusing on ISO 20022 concepts, strategies, adoption plans and implementation approaches.
Explore the full programme on sibos.com.