ISO 20022 and Harmonization

“The standard is not standard” – ISO 20022 is in a certain sense similar to EDIFACT, ANSI X12 or other multi-purpose standards. These standards can and are used in different contexts (corporate to bank mixed payables, domestic and cross-border payment systems, etc.). All have unique requirements for a variety of reasons based in regulation, market practice, end-user expectations, etc.

Post-development of the standards, harmonization efforts are underway to address the common interests of various user groups:

  • Corporates for mixed payables: CGI-MP (Common Global Implementation-Market Practice) commenced operation in 2009, an outgrowth of earlier industry efforts to harmonize the corporate to bank standards. CGI-MP addresses transaction initiation and advising, eBAM and BSB for domestic, cross-border and multi-country. Most corporate implementations, the specifications developed by NACHA and the ISO 20022 payments interface developed by SAP, all use this version of the standard.
  • Real-Time Payments – Founded in 2015 to address the rapidly growing interests in real-time payments. Current developments in the real-time payments space, US and elsewhere have resulted in the creation of a Real-Time Payments Group working to harmonize the use of the ISO 20022 standards.
  • High-Value Payments – Founded in 2016, under the auspices of SWIFT, wire payment system operators (e.g. the Federal Reserve Bank and the Clearing House, for Fedwire and CHIPS) are working to harmonize use of the standard to promote domestic and cross-border interoperability and consistency.

Industry interest and engagement in these harmonization efforts, especially end users (e.g. corporate treasurers) will make a big difference in outcomes.

Q – What can financial professionals do to enhance the value of these developments?

A – Advocate for your interests through:

  • Industry organizations such as AFP (Association of Financial Professionals?), NACHA, X9 and others
  • Providers such as banks and tech cos