Over time, the financial industry has established different sets of standards to handle, and process data flows. Capital markets use the Financial Information Exchange (FIX) protocol to communicate information related to securities transactions. Payment providers and financial institutions are well versed in the use of MT messages which convey payment information throughout the SWIFT network.
ISO 20022 is an ambitious and flexible standard ‘methodology’ to supplement, and even supplant, many different types of existing financial messages across the industry. The extensibility of the standard also means that new business process types and datasets can be added quickly and easily.
These characteristics enable an entirely new set of potential functionalities and features that financial institutions across the industry have only begun to explore. The implications and impact of ISO 20022 on the global financial industry are large and offer new opportunities for companies to streamline and optimize existing business models, and create new ones, thus unlocking additional business value in payments beyond just better, cheaper, and faster.
It is in this context that we are pleased to present the Unlocking Business Value in Payments report by Kapronasia, in conjunction with FIS. We start the report with a look at standards in the financial industry including ISO 20022 and what is driving its development. We then look at some industry examples of where the ISO 20022 standard is finding traction. The report then explores the key benefits that banks are deriving from the new standard and what to expect in the future.