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How will ISO 20022 formats simplify messaging between parties?

ISO 20022 will simplify messaging between parties thanks to the implementation of the ISO 20022 Data Dictionary, regardless of the syntax/format the messages would be represented in, enabling interoperability.

Indeed, the development of the ISO 20022 standard is based on the articulation of three layers:

  • The business layer that defines the business meaning of a business concept;
  • The logical layer that defines the logical messages to perform a specific business activity;
  • The physical layer that is the syntax used to represent the logical message. This syntax independent standard enables the selection of the appropriate syntax for each context and reduces ambiguity when information is transferred from one context to another. For example, XML is most commonly used in the context of Payments Clearing and Settlement, while ASN.1 is used for Card Payments, and JSON for APIs.

Due to its formal, machine-processable language enabling users to store, share and transport structured information independent of specific hardware or software requirements, XML (eXtensible Markup Language) is the most used syntax to represent ISO 20022 messages.

What has been standardised when it comes to ISO 20022 messages?

ISO 20022 aims to overcome the barriers linked to the use of different syntaxes and semantics when exchanging financial information. Specialists in different domains or countries have developed their own jargon and can use different words to refer to the same concept. The ISO 20022 standard describes the agreement on what information is expressed and does away with differing interpretation of terms.

The ISO 20022 methodology starts with the creation of the business model. This is the definition of the activity or business process, the business roles and actors involved in that activity and the business information needed in order for the activity to take place. The second step builds upon the first by defining logical messages using the previously defined business concepts, and describing all the information that is needed to perform a specific business activity, independent of the syntax. Note that some business concepts such as 'PostalAddress' used to identify a party's or a financial institution’s address can be used whether the message is related to a credit transfer, a credit card payment, securities or a foreign exchange transaction. Individual elements such as ‘InterbankSettlementAmount’ and ‘InterbankSettlementDate’ can also be reused. Finally, the syntax (physical representation) of the logical message will be specified. 

What is ISO 20022 and how will they support global business needs?

ISO 20022 is a methodology to develop common financial messaging standards, based on a business dictionary. It is an open, neutral, syntax-independent global standard, freely implementable by anyone and supported by an open governance process.  ISO 20022 follows a specific registration, development and maintenance process that is governed by four main groups, composed of technical experts and senior industry experts, who together represent all sectors of the financial industry.

They ensure that ISO 20022 messages address the needs of the widest range of future users, reusing and grouping common data objects into ISO 20022 syntax-neutral, independent messages, and that these remain compliant with ISO 20022 technical specifications.

How does the ISO 20022 Data Dictionary define financial messaging?

Along with the ISO 20022 Business Process Catalogue, the ISO 20022 Data Dictionary composes the ISO 20022 Central Repository,  which is key to the ISO 20022 standard and is publicly available on iso20022.org.  The ISO 20022 Data Dictionary contains all items that can be re-used during the business modelling and message definition activities:

  • Business concepts: items with a business meaning (business associations, business components, business elements or business roles)
  • Message concepts: derived from business concepts (message components, message constraints and message elements)
  • Data types: describe the various formats or code values to express data in business concepts or message concepts (amount, time, date, quantity)

What is the format pacs and where is it used?

pacs (Payments Clearing and Settlement) is a specific XML (eXtensible Markup Language) syntax used for the clearing and settlement of credit transfers between financial institutions.  Over SWIFT, messages belonging to Cash Management (camt) and payments initiation (pain) are also commonly represented using the XML syntax or the JSON syntax if sent over APIs.

When using the translation tool from MX to MT, is there a way to retrieve missing/truncated information?

When using the SWIFT Translator locally, truncated elements can be collected and reused.

Will there be any changes to the CBPR+ Usage Guidelines as a result of the change in the ISO 20022 adoption approach?

No - the CBPR+ usage guidelines that are already published on MyStandards are final. As the community begins to work with them, there may occasionally be a need to correct small errors. Those corrections will normally be handled via the annual update, in line with the annual Standards Release, with which the community is already familiar. Of course, it is always good practice to maintain a regular check on the collection in MyStandards in order to be sure you are working on the latest versions. 

Will I be able to use ISO 15022 messages as well as MXs for SRD II (Shareholders Rights Directive II) and CSDR (Central Securities Depositories Regulation)? And for how long?

Yes - although there are two SRD II scenarios which are ONLY supported by ISO 20022 messages. Please see the relevant pages on MyStandards for more details on these. There is no plan, at the moment, to retire any ISO 15022 messages in favour of ISO 20022 equivalents.

Is there a deadline for securities we must adhere to to migrate to ISO 20022?

You will be able to start doing that as soon as the securities ISO 20022 messages are provisioned on the live FINplus service. However, there is no organised migration, nor is there any "sunset" date as yet on securities MTs. You can carry on using MTs for securities operations indefinitely.

Will I be able to use FINplus as well as FIN for payments and cash reporting?

Yes - The platform will specify the rules on how users can organise the mix of standards and channels they wish to use, but indeed it will support a mix of standards for those users who need it.

Do I need to order FINplus? Or will it be automatically provisioned?

Yes - you will need to order FINplus. The previous plan to provision it automatically to every bank on the network is no longer in place. FINplus can be ordered in exactly the same way that any SWIFT product or service can be ordered, from swift.com.

Will all the pilot services carry all messages?

Yes - FINplus will eventually carry all ISO 20022 messages required by the community in banking, payments, securities, trade, foreign exchange, treasury and regulatory domains. 

When will Deployment Packs be ready for Alliance Access users for CBPR+?

Late summer of 2020, and they will be incremented as new CBPR+ usage guidelines are defined.

When there is an API channel available, which Interfaces will be ready to support it and when?

The API channel with the new Transaction Management Platform will be published in March 2021; details of how the Interfaces will support it will be issued after that.

What is AMH’s Deployment strategy for ISO 20022 packages?

AMH users have been used to receiving a single standards release pack, containing MT and MX definitions for each year, in July ahead of deployment in November. This will change. This year, for example, there will be separate packages for MT and MX definitions, and in future, these packages will be issued by business domain, so that users have more choice as to which set of updates to load and maintain.

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