Unlocking new opportunities in payments
The changeover from the legacy MT messaging standard to the data-rich ISO MX standard is a positive step forward for all participants in the payments value chain. The adoption of ISO 20022 allows for additional, enriched data to be transferred within the payment instruction. This new format has more granular and better organized data elements across the payments chain to speed processing and improve compliance. The rich data enabled by ISO 20022 will feed into a wide range of new use cases for players in the payments value chain.
Benefits of ISO 20022
Wide user community
This means that a variety of technical solutions have been developed and can be bought and used at relatively low cost and time to market.
Due to the well documented ISO 20022 data dictionary, the data model can be reused for other key industry programs such as API development.
Improved industry interoperability
It also reduces the complexity, cost and risk of data manipulation and conversion in the interbank space and between banks and their customer.
Migration challenges and opportunities of ISO 20022
In addition to the transition of cross border payments to SWIFT (MT to MX), there are many domestic RTGS schemes that are adopting ISO 20022 over the coming years (e.g., CHAPS, Fedwire, CHIPS, CHATS) – by 2025 it is projected that around 80 will have made the move. This represents a challenge for systems built around proprietary message formats (including SWIFT’s MT) as they cannot store the full information in the data-rich ISO standard. Even where schemes are adopting a period of like-for-like, or there are workarounds such as storing a copy of the ISO data which can be re-attached for onward transmission, the lack of an ISO-native data model means that some Banks will miss out on the data insights and high-levels of automation (e.g., use of purpose codes and invoice reconciliation) possible with the new standard. And of course, any loss of data increases the risk of regulatory breaches in areas such as compliance, AML, and Fraud.
How can Finastra help?
Our payment products are ISO 20022-native and so are ready OOTB to deliver both compliance and the revenue-generating opportunities that come from embracing the new data insights and levels of automation that come with the transition.
Harnessing the value of ISO 20022
Finastra enables the National Bank of Greece (NBG) to harness the richness of the new ISO 20022 standard.
Watch the replay of this webinar to find out:
- How can banks benefit from the implementation of ISO20022?
- How will it enable the improvement of security (e.g. fraud detection)?
- What are the challenges for banks when moving to ISO20022?
- How can financial institutions control and use the new data gained?
Fusion Payments To Go
A fully ISO native payments solution built in the cloud. With Fusion Payments To Go easily meet upcoming scheme deadlines whilst adopting an evergreen solution that supports your long term payment ambitions.
- Instant access to global schemes
- An ‘always compliant’ solution built in the cloud
- Open architecture to stay at the forefront of innovation
Pre-packaged, AML screening solution
To screen enriched ISO 20022 data, we partnered with Fincom.co to offer a pre-packaged, AML screening solution that provides better compliance at lower operational costs. It is easily integrated with our range of payment solutions through our FusionFabric.cloud marketplace.