Presentation is loading. Please wait.

Presentation is loading. Please wait.

ISO The success of ISO – Universal financial Industry

Similar presentations


Presentation on theme: "ISO The success of ISO – Universal financial Industry"— Presentation transcript:

1 ISO 20022 The success of ISO 20022 – Universal financial Industry
message scheme ISO_20022_SV_v43

2 ISO 20022 The ISO recipe for all financial messages
ISO Universal financial industry message scheme, the recipe: syntax neutral business modelling methodology syntax specific design rules industry led development/registration process financial repository on reverse engineering approach to ease coexistence ISO is not a suite of message standards but a recipe proposed by ISO to develop message standards for all domains of the financial industry. The recipe contains the ingredients shown. The most innovative characteristic of ISO is its modelling methodology which decouples the business standard from the physical message formats. The models evolve with the business, while the formats evolve with the technology to benefit from the latest innovations with regard to automation, ease of implementation, openness and cheapness of products, etc. This ISO recipe offers a better, cheaper and faster way of developing and implementing message standards. The business modelling is done in the Unified Modelling Language (UML). The syntax specific design rules cover the conversion of UML to XML (eXtended Markup Language). The combination of the first and last ingredients (the business modelling methodology and the reverse engineering approach) makes the ISO recipe a unique development tool kit. It proposes a single target (convergence) while offering at the same time a tool to ease interoperability with other existing message sets (coexistence). ISO_20022_SV_v43

3 Why ISO 20022? Supports convergence and co-existence
IFX ISO 15022 MDDL TWIST FIX FpML Message model IFX TWIST Message model MDDL FpML FIX When standards are developed independently of each other, ‘translating’ from one standard to another requires to map data directly from one application to another and vice-versa. This is costly, unscalable and difficult to implement and maintain. Each time you add a new standard to support, it increases the complexity and cost exponentially. Using a single message model as a master model reduces the translation effort since each standard only needs to translate to the master to ensure a link with any other standard. Such an approach of developing syntax-independent business models is the core of the ISO standard… Longer term, the physical ISO messages generated from the model would become the one and only standard we are looking for. While getting there, the message model helps co-existence. Furthermore, if it is more efficient to use another syntax for a particular business area or a particular market segment, starting from the ISO message models to generate the messages in this other syntax ensures that the business information will flow smoothly from one message to another whichever the syntax used to transport this business information. Long term we want one standard, but in the interim several standards need to co-exist… ISO_20022_SV_v43

4 Why ISO 20022? Convergence in the cooperative space
Competitive Space Cooperative Space Competitive Space High Value Payments: RTGS, EURO1 and CHIPS Financial Institutions Financial Institutions FX and Money Markets: Rule Books, CLS Public Admini- strators Commercial Payments: Rule Books, Clearing Houses, Processors Public Admini- strators Bank A Bank B Cards: Rule Books, Card Schemes, Cards Processors Corporates Corporates Tradefacilitation: ICC Rule Books, e-invoicing SME’s SME’s Cash: NCB rules, Industry Standards Merchants The ISO standardisation effort takes place in the cooperative space. As such it allows all financial players to maintain their competitive edge. Merchants Securities: Rule Books, Exchanges, CCP’s CSD’s, Standardisation Consumers Consumers Certification & Networks: SWIFT Cooperative space for business rules Cooperative space for standards ISO_20022_SV_v43

5 The ISO 20022 recipe - For whom? Potential users and developers
communities of users looking for interoperability and more cost-effective communications Message development organisations: CBI Consortium, FIX, RIXML, FpML, IFX Forum, TWIST, SWIFT, RosettaNet, OAGi, ACORD, XBRL, EPASOrg, Berlin Group, ANBIMA, etc. Market Infrastructures (MIs): DTCC, FED, EBA, Target, CLS, Euroclear, Omgeo, ECB, NBB, etc. International or national standards setters: ISITC, ISO TC68 WGs, UN/CEFACT TBG5, OMG, EPC, UK Payments Council, etc. To whom is the ISO recipe targeted? The ISO platform is available to all developers of message standards (they don’t need to be affiliated to ISO). And the ISO message standards are freely and publicly available to all communities of users. The goal is to attract all developers of financial message standards. They will continue to focus on their domain of expertise and keep their Intellectual Property Rights (IPR) on the ISO compliant messages they develop while all together offering the community a range of messages in the same language, as if they were developed by a single body. The organisations ‘in yellow’ on the slide have already engaged in ISO message development. Market infrastructures (ACHs, RTGS, [I]CSDs, etc.) are adopting and pushing developers to embrace the ISO standard for the benefit of their common customers. Industry initiatives and regulatory requirements, such as the European e-Invoicing initiative, SEPA, Target2-Securities, Giovannini and MiFID, which all look for open standards to support their harmonisation of business practices, are all recommending adoption of ISO 20022… There are also catalysts for interoperability and convergence, such as SEPA, T2S, Giovannini, MiFID, e-Invoicing ISO_20022_SV_v43

6 ISO 20022 The registration bodies
Registration Management Group - RMG (Overall governance) 70 senior managers from 22 countries and 12 international organisations Standards Evaluation Groups – SEGs (User representatives) Payments (55 experts,17 countries, 6 organisations) Securities (77 experts, 20 countries, 8 organisations) Forex (29 experts, 13 countries, 4 organisations) Trade Services (29 experts, 14 countries, 2 organisations) Cards and related retail financial services (30 experts, 14 countries, 4 organisations) Technical Support Group – TSG (ISO technical advisors) 29 experts from 11 countries and 5 international organisations Registration Authority – RA (Maintaining ISO repository) The industry is directly involved in the acceptance, review and evaluation of candidate ISO messages submitted by the submitting organisations. The Registration Management Group (RMG) is the highest registration body. It is made up of senior industry experts nominated by ISO countries and international organisations in liaison with ISO. All together, they represent all sectors of the financial industry. The RMG monitors the overall registration process. It approves the business justifications introduced by submitting organisations that want to develop new ISO messages. It also initiates the creation of the Standards Evaluation Groups (SEGs). The Standards Evaluation Groups (SEGs) are groups of industry experts nominated by ISO countries and liaison organisations, which each represents the future users of ISO messages in a particular financial domain. Their role is to ensure that the candidate ISO messages actually address the needs of the future users. The Technical Support Group (TSG) is composed of technical experts nominated by ISO countries and liaison organizations, who can advise the submitting organizations and the other ISO registration bodies on technical matters related to the use of the ISO recipe, eg, modelling guidelines, usage of XML, repository management, impact of innovations, etc. The Registration Authority (RA) is the guardian of the ISO financial repository. SWIFT has been nominated by ISO to provide the RA services. The RA supports the submitting organisations in their development effort, ensures compliance of the developed models and performs the transformation of message models into compliant XML schemas. The RA is also responsible for the maintenance of the ISO website ( which contains detailed information on the ISO message portfolio and the status of all ISO projects. The RMG and the first two SEGs were initiated in 2005 and the next two SEGs in 2006, while the last SEG and the TSG were created in As you can see from the figures on the slide, ISO is quite successful in attracting the interest of the industry worldwide. ISO_20022_SV_v43

7 ISO 20022 The registration process
M G m o n i t r s Submitting organisation Financial organisation or standards body Business justification Business justification RMG Project approval & allocation to a SEG Candidate ISO messages Submitting organisation & RA Development & provisional registration SEG Business validation ISO messages This is an illustration of the process for development and registration of new sets of messages. There is a more detailed description of it on The entry point of the registration process is the preparation of a ‘Business Justification’ by the organisation that wants to develop the messages (the “submitting organisation”). The Business Justification must describe the high level scope of the messages to be developed and the reason why they are expected to benefit the industry. The Business Justification is reviewed by the SEGs and the RMG. The RMG will decide whether the proposed development fits into the ISO spectrum, does not duplicate the already existing messages and is indeed beneficial to the community. If the request is approved, the RMG decides which SEG(s) will be in charge of the evaluation of the messages, once developed. The submitting organisation develops ISO compliant business and message models. The RA assists the submitting organisation during this phase in order to ensure that the models are compliant and use the right components from the Data Dictionary. If need be, the RA may create additional dictionary items. When the development is completed, the RA generates the XML schemas and prepares a comprehensive documentation for the SEG. Based on this documentation, the SEG(s) evaluates the candidate ISO messages. The main goal of the SEG(s) is to get the buy-in of the future users from a business perspective. The submitting organisation is participating to the evaluation to help the SEG understand the proposed solution and address any question that would be raised by the SEG members. When/if the SEG approves the messages, the RA proceeds to the official registration of the message components in the ISO Data Dictionary and publishes the new ‘ISO messages’ in the Business Process Catalogue on When messages are first piloted or implemented, first users are invited to comment on the ‘technical implementability’ of the messages and the accuracy of the documentation published on the website. Possible changes or corrections requested by first implementers will be evaluated by the SEG, the RA and the submitting organisation and may lead to changes to the messages and/or documentation. All along, the RMG monitors the work and if need be, arbitrates any disputes. Once the Business Justification is approved by the RMG, and as long as the messages have not been approved by the SEG, the messages are called ‘candidate ISO messages’. Once they are approved by the SEG for publication, the messages are called ‘ISO messages’ or ‘ISO compliant messages’. Official registration and publication RA Repository Dictionary Catalogue Optional pilot testing or first implementers Submitter & users ISO_20022_SV_v43

8 The ISO 20022 recipe is used! (1/11) Payments
Credit Transfers / Direct Debits / Mandates Exceptions & Investigations Creditor’s financial institution Debtor’s financial institution Change/Verify Account Identification Creditor Payment Activation Request Cash Management Exceptions & Investigations ISO 20022 Advice & Statement Change/Verify Account Identification Bank Account Management Creditor Payment Activation Request Account Reporting Request Notification to Receive Mandates Cash Management Credit Transfer Initiation Advice & Statement Exceptions & Investigations Creditor Payment Activation Request Direct Debit Initiation Candidate ISO (in development) This is an overview of the current ISO offering to support the Payments market. The picture shows the various flows of information exchanged by the parties to initiate, execute and report the execution of a payment. The yellow arrows are already covered by approved ISO messages, while the blue arrows are still candidate ISO messages. In September 2005, the Payments SEG approved the very first set of ISO messages covering the area of ‘customer to bank credit transfer initiation’, which included the so-called ‘core payment kernel’ developed jointly by SWIFT, TWIST, IFX and OAGi. In June 2006, the SEG approved a new version of the payment initiation messages, including direct debits as well as the interbank direct debit and credit transfer messages. The interbank messages were developed by SWIFT and will be used in the new SEPA environment. In July 2006, the SEG approved a set of messages developed by SWIFT to cover exceptions and investigations in the payments area. In March 2007, the SEG approved 3 bank to customer advice and statement messages developed jointly by SWIFT, TWIST, IFX, OAGi and ISITC. In March 2009, the SEG approved a new version of the whole ISO Payments message set, to accommodate change requests received from the user base. In August 2009, the SEG approved four Mandate messages developed by SWIFT to initiate and maintain payment mandates. In December 2009, the SEG approved a set of 3 messages developed by the the French SWIFT Users Group to inform payment initiators of a change in the account identification of their counterpart or verify the account of the beneficiary before instructing a payment. In March 2010, the SEG approved 15 Bank Account Management messages developed by SWIFT to enable corporate clients to open a bank account with their bank and maintain related data. In September 2010, the SEG approved a set of 2 messages developed by the CBI Consortium to enable creditors to request debtors to initiate a credit transfer in their favour. In November 2010, the SEG approved a set of 4 Cash Account Reporting Request and Notification to Receive messages developed by SWIFT. The following business justifications have been approved by the RMG and will complement the approved messages: a whole suite of candidate cash management messages developed by SWIFT. They will include ‘query/answer’ messages to retrieve information about cash accounts and transaction, as well as interbank statement and advice messages Cash Lodgement and Withdrawal by the National Bank of Belgium Card Clearing Payment messages (CCPay) by the Berlin Group Real Time Payments by the Payments Council Ltd – UK The last three projects are not represented on the slide. A business justification for Remittance Advice messages has been introduced by IFX, TWIST, SWIFT and OAGi, and a business justification for a Bank Services Billing message has been introduced by TWIST and SWIFT. Cash Management Debtor Creditor ISO_20022_SV_v43

9 The ISO 20022 recipe is used! (2/11) Payments message portfolio is growing!
58 ISO messages approved: Customer payment initiation Interbank payment clearing and settlement Payments exceptions & investigations Bank-to-customer cash management Mandates Change/verify account identification Bank account management Creditor payment activation request Cash account reporting request & notification messages Candidate ISO messages under evaluation: none Candidate ISO messages approved for development: Cash management Cash lodgement and withdrawal Card clearing payment messages (CCPay) Real time payments New development proposals: Remittance advice messages Bank services billing ISO_20022_SV_v43

10 The ISO 20022 recipe is used! (3/11) Card message portfolio is growing
Authorisation (ATICA) Acquirer Issuer POI transaction authorisation (CAPE) POI terminal Management (CAPE) ATMI transaction authorisation (IFX) ATM terminal Management (IFX) ISO 20022 Candidate ISO (in development) In October 2010, the Cards and Related Retail Financial Services SEG approved a first set of 15 Card Payments Exchange (CAPE) messages developed by EPASOrg to support Acceptor to Acquirer POI activities, including authorisation, completion, batch transfer, cancellation, reconciliation, diagnostic and rejection. Under the same CAPE business justification, EPASOrg is developing two additional candidate message sets to cover: - the Sale Management at the retailer (Sale to POI) - the Terminal Management including status report, management plan and acceptor parameters. Two other business justifications were approved by the RMG: Acquirer to issuer card messages (ATICA) proposed by ISO TC68/SC7/WG9 as a reverse engineering of ISO 8583 card messages in ISO ATM interface for transaction processing and ATM management messages proposed by the IFX Forum. Acceptor Sale Management (CAPE) ISO_20022_SV_v43

11 The ISO 20022 recipe is used! (4/11) Cards and related retail financial services
15 ISO messages approved: Card payments exchanges (CAPE) – Acceptor to Acquirer Candidate ISO messages under evaluation: None Candidate ISO messages approved for development: ATM interface for transaction processing and ATM management (IFX) Acquirer to issuer card messages (ATICA) Card Payments Exchanges (CAPE) - Sale-to-POI management Card Payments Exchanges (CAPE) - Terminal management New development proposal: ISO_20022_SV_v43

12 The ISO 20022 recipe is used! (5/11) Securities - equities and fixed income
Buyer Seller Pre-trade / Trade (FIX/SWIFT) Post-Trade (Omgeo/SWIFT) CCP Clearing (FPL/SWIFT) Regulators Transaction Regulatory Reporting (SWIFT) Corporate Actions (SWIFT) Settlement (SWIFT) Settlement (SWIFT) Corporate Actions (SWIFT) ISO 20022 Reconciliation TPV Statement (ISITC/SWIFT) Candidate ISO (in development) Reconciliation (SWIFT) ISO 15022 I/CSD On the traditional fixed income and equities markets, the situation is a bit different since the securities industry is using ISO 15022, the precursor of ISO ISO (illustrated in red/orange on the slide) covers a large part of the securities business from trade to settlement and reconciliation, and corporate actions. ISO development initially focused on areas not (well) covered by ISO such as: the pre-trade and trade space (29 candidate messages submitted by FIX and SWIFT) the transaction regulatory reporting required to address MiFID (four messages developed by SWIFT) the proxy voting process (eight messages developed by SWIFT) the issuer’s agent communication for corporate actions (22 messages developed by Euroclear) the investment funds distribution (see next slide). However, under the pressure of the firms who have not invested in ISO and would prefer to invest directly in ISO 20022 the industry initiatives (Giovannini, MiFID, T2S) recommending ISO 20022 the other financial industry sectors which are moving to ISO (eg, payments/SEPA), the RMG approved the development of ISO equivalent messages in the ‘core’ areas of settlement and reconciliation (29 messages approved in December 2009), corporate actions (13 messages approved in December 20009) and triparty collateral management, which are covered by ISO SWIFT, Euroclear, Omgeo, FPL, FpML and ISITC have also started development of candidate ISO messages in a series of specific areas. A new version of the 29 Settlement and Reconciliation messages and 13 Corporate Actions messages is being developed by SWIFT for publication on 2011. NB: the slide doesn’t show the Securities Issuance project from Euroclear, the Triparty Collateral Management project from SWIFT, the Collateral Management project from FPL, FpML, ISITC and SWIFT, and Target2-Securities (T2S). Settlement & Reconciliation (SWIFT) Settlement & Reconciliation (SWIFT) Custodian Issuers’ Agent Communication (Euroclear) Registration Communication (Euroclear) Clearing agent Corporate Actions (SWIFT) Market Claims (Euroclear) Issuers’ Agent Registrar ISO_20022_SV_v43

13 The ISO 20022 recipe is used! (6/11) Securities - investment funds (CIV)
PEP/ISA/Portfolio Transfers Old plan manager Fund accountant New plan manager Price Report Order & Confirmation & Status Alternative Funds Order, Confirm & Status Transfer agent Transfer & Confirmation & Status Institutional investor Statements Account Management Fund Cash Forecast Report Request for Fund Report A full set of 67 ISO messages were developed by SWIFT in the area of Collective Investment Vehicle (CIV). 45 of them were approved in December A second release, including 22 additional messages, was approved in April 2008. Two Fund Processing Passport Report messages from SWIFT were approved in November 2009. SWIFT is developing 8 candidate messages for Alternative Funds (hedge funds). ANBIMA is developing 4 candidate Investment Fund Prospectus messages. Prospectus or FPP report user, e.g. Fund distributor FPP Report Fund Prospectus Investment manager Prospectus or FPP report provider, e.g. Fund manager ISO 20022 Candidate ISO (in development) ISO_20022_SV_v43

14 The ISO 20022 recipe is used! (7/11) Securities message portfolio is growing!
145 ISO messages approved and published: Investment funds distribution Securities transaction regulatory reporting Proxy voting Issuers’ agents communication Fund processing passport report Securities settlement and reconciliation Securities corporate actions Candidate ISO messages under evaluation: Securities pre-trade/trade Candidate ISO messages approved for development: Total portfolio valuation statement Securities registration and holder identification Securities market claims and automatic transformation Securities issuance Triparty collateral management Alternative funds Securities post-trade Settlement modification/replace and allegement response TARGET2-Securities CCP Clearing Collateral management Investment fund prospectus New development proposal: none

15 The ISO 20022 recipe is used! (8/11) Forex
Ordering party ISO 20022 MTs FpML CUG (Trade Notifications) FX order Interest rate swaps Trading party Foreign exchange and currency options Loans and deposits Trading party FX & Loan/Deposit Advice & Allocations NDF Opening and Valuation Notifications and Foreign Exchange Option Premium Notifications Settlement party custodian NDF and Foreign Exchange Option Notifications NDF and Foreign Exchange Option Notifications In March 2007, the FX SEG approved 15 Forex Notifications messages submitted by CLS. There are no additional candidate ISO messages in development in FX. The SWIFT MT and FpML messages shown on the slide are for information only. Central Settlement System ISO_20022_SV_v43

16 The ISO 20022 recipe is used! (9/11) FX message portfolio is growing!
15 ISO messages approved and published: Forex notifications Candidate ISO messages under evaluation: none Candidate ISO messages approved for development: New development proposals: ISO_20022_SV_v43

17 The ISO 20022 recipe is used! (10/11) Trade Services
Financial Invoice Buyer’s bank Seller’s bank Trade Services Management Trade Services Management TSU Invoice Financing Request Financial Invoice Financial Invoice ISO 20022 Candidate ISO (in development) Financial Invoice Buyer The Trade Services SEG approved 3 Invoice Financing Request messages submitted by the CBI Consortium in October 2007, 50 Trade Services Management (TSU) messages submitted by SWIFT in April In October 2010, it approved a Financial Invoice message developed by UN/CEFACT TBG5 that can be used to trigger payment initiation (EBPP) and for other financial purposes. SWIFT has introduced a business justification for development of messages related to Demand Guarantees and Standby Letters of Credit. Seller ISO_20022_SV_v43

18 The ISO 20022 recipe is used! (11/11) Trade message portfolio is growing!
54 ISO messages approved and published: Invoice financing request Trade services management Financial invoice Candidate ISO messages under evaluation: none Candidate ISO messages approved for development: New development proposals: Demand guarantees and standby letters of credit ISO_20022_SV_v43

19 Who is interested by ISO 20022?
Country Visits % 1 France 8,269 13% 2 USA 6,674 11% 3 UK 6,642 4 Germany 5,645 9% 5 Belgium 3,436 6% 6 India 2,491 4% 7 Finland 2,265 8 Netherlands 2,264 9 Sweden 1,996 3% 10 Japan 1,934 11 Switzerland 1,888 12 Australia 1,381 2% 13 Italy 1,250 14 Hong Kong 979 15 China 872 1% 16 Poland 871 17 Canada 772 18 Denmark 767 19 Spain 757 20 Slovenia 707 21 Singapore 680 22 Austria 635 23 Brazil 632 24 Ireland 532 25 Russia 475 54,814 88% From 1 April to 30 September 2010, had over 62,000 visits from 162 countries Continent Visits % Europe 42,037 67.4% Asia 9,199 14.8% Americas 8,676 13.9% Oceania 1,463 2.3% Africa 971 1.6% ISO_20022_SV_v43

20 & Answers uestions www.iso20022.org iso20022ra@iso20022.org
We have reached the end of this presentation. Remember, a lot of information is available on the ISO website ( which is updated on an ongoing basis, but questions and comments can also be sent to the RA: ISO_20022_SV_v43


Download ppt "ISO The success of ISO – Universal financial Industry"

Similar presentations


Ads by Google