The new global language for financial commuications is very much a work in progress. In this article written for The AsIan Banker, Nancy So assesses how banks across the region measure up.
This article was first published by The Asian Banker
Across the globe, Payment Market Infrastructures (PMI) are overhauling their systems to streamline their infrastructure with a single, common “language” for all financial communications. XML ISO 20022 appears to fit the bill. It not only provides much-needed data enrichment, from both a commercial and a regulatory perspective, but could also fulfil The long-anticipated goal of greater interoperability between various settlement networks.
While major PMIs in the US (FedWire/CHIPS), the Eurozone (Target2/EBA Clearing) and the UK (CHAPS) have launched their respective ISO 20022 adoption projects, we have already seen actual live adoptions in Asia – most notably in China, Japan and India – with more to follow in the next few years. Additionally, SWIFT is pursuing its own network revamp towards ISO standards for its message categories 1, 2 and 9.
ISO 20022 migration significantly affects all banks – correspondent banking service providers and financial institution (FI) clients alike. So how are Asian banks approaching what has been dubbed “the payment industry’s greatest challenge since the introduction of the Euro – but also its greatest opportunity”? We take a closer look.