In the other part of my virtual life, I have written about the push toward ISO20022--both the positives and the negatives around the new standard as well as the lack of a business case directed toward corporates. So if these comments seem a little familiar--don't
say I didn't warn you. Because I still think the issues that I raised are valid and speak to how the banking industry sometimes gets ahead of its customers. More importantly I think the industry has opportunties to educate to help align the needs of the industry with
the customer a little better.
In April, I attended the 2009 SWIFT Operations Forum or SOFA (for anyone reading who is not familiar with SWIFT I put the link in just for you) and noticed how often
ISO20022 was mentioned--both as a current concern and as the next big adoption wave for both the bank and its wholesale customers.
Yet, despite generating a lot of headlines and interest; many corporates haven't made up their minds about just how important ISO20022 adoption really is to the future of their business. With today's announcement, JP Morgan has put a stake in the ground.
But will their corporate customers--can their corporate customers--do the same?
ISO20022 was created by the International Organizational for Standardization (which makes me wonder why it's not IOS20022 ) and was designed to provide the financial industry with a common platform for the development of messages in a standardized XML schema. Take
note--ISO20022 is not a standard, it is a tool to develop standards. Which makes sense when you remember that the ISO20022 payment standards are just the first ones in the market. Payments are first primarily because of the
Single Euro Payments Area (SEPA) which has adopted ISO20022 as its standard to improve efficiencies around electronic cross-border payments. Nonetheless, ISO20022 is promoted as the universal financial industry message scheme which right now is really
just a marketing message no different than
A Diamond is Forever or
Have a Coke and a Smile. (Yeah Marketing!) But let's be real...adoption of ISO20022 is far from universal.
The biggest push for ISO20022 comes from Europe which is not surprising given the highly fragmented nature of the European market. Earlier this year,
Kristin White provided a great overview of the uphill battle to ISO20022 adoption outside of Europe. She notes as have
others that the people promoting ISO20022 haven't been as adept in promoting a business case that would make industry-wide investment worthwhile particularly when no can predict what the future will bring. Which makes it hard to imagine that people will
stand up in large numbers to fight for ISO20022 adoption in their organizations today. But I could be wrong. (Don't tell...but I have been wrong before.) Anyway, check out this BS&T blog post from last May, ISO20022/UNIFI
is the Answer – What was the question?, which does a great job of looking at the history of the ISO20022 and explaining why so many are thinking, talking and considering it.
I applaud JP Morgan for once again being out front but the fact remains--banks have got to do a better job of educating corporates about ISO20022. They have got to do more to explain why this standard will be a value add for the corporate community and
not just another in a long list of "to do" activities that will require corporates to adapt. Universal adoption means universal value and right now the value for corporates is unproven.