What is ISO 20022?
ISO 20022 is an international standard developed to facilitate electronic data interchange between financial institutions.
Its business modelling approach allows users and developers to represent financial business processes and underlying transactions in a formal but syntax-independent notation. These business transaction models are the ‘real’ business standards. They can be converted into physical messages in the desired syntax. The current standard accommodates XML and ASN.1 syntaxes. The standard was developed within the International Organization for Standardization (ISO) Technical Committee 68 (TC68) which specialises in developing technical standards for financial services.
The first focus of ISO 20022 is on international (cross-border) financial communication between financial institutions, their clients and the domestic or international ‘market infrastructures’ involved in the processing of financial transactions. There is, however, a strong opportunity to use ISO 20022 for the development of new domestic financial messages as well, thereby streamlining all communications for financial institutions.
What are the benefits of ISO 20022?
ISO 20022 is a single, common ‘language’ for all financial communications – no matter where the business is based. It allows participants and systems in different markets to ‘talk’ to each other using consistent terminology and formatting.
This has particular benefits for international financial communication between financial institutions, their clients and the domestic or international ‘market infrastructures’ (like payment schemes) involved in the processing of financial transactions. Work is focused in this area first. There is also a strong opportunity to use ISO 20022 for the development of new domestic financial messages between financial institutions here in the UK.
What is the UK doing to roll out ISO 20022?
The UK payments industry has a long history of being committed to common industry standards and this commitment will continue. The payments industry has spent time working to ensure that any future collaborative change or innovation by the collaborative UK payments industry must consider the opportunity to invest in ISO 20022 – making it the default future choice. In this vein, we expect to see many more use cases of ISO 20022 in the UK payments industry for domestic and cross-border transactions.
The UK has already deployed ISO 20022 messages for the Cash ISA Transfer Service, the Image Clearing System, and for the Current Account Switch Service. In addition, there are plans for the implementation of ISO20022 in the near future. For example, the Payments Strategy Forum, the Bank of England’s Real TimeGross Settlement (RTGS) service renewal, and the re-procurement of the Faster Payments infrastructure have all committed to using ISO 20022.
Who handles the ISO 20022 Registration process?
The ISO20022 approval and registration process involves three kinds of registration bodies: the Registration Management Group (RMG), the Registration Authority (RA) and the Standards Evaluation Groups (SEGs), which work together to validate and process the registration requests from users, according to the ISO20022 Registration Procedures. The Secretariat and Convenorship of the RMG are currently held by the UK and operated by Pay.UK.