ISO20022: global messaging standard takes centre stage at Sibos

Since its launch more than 40 years ago, SWIFT’s international banking operations seminar (Sibos) has become renowned as the go-to gathering for anyone seeking to understand the latest developments in financial services. And this year’s event in Amsterdam between October 10 and 13 didn’t disappoint.

 Understandably, digital innovation was high up the agenda, with the business critical ISO20022 messaging standard forming one of the hottest programme topics. A consistent thread running through the conference programme, sessions ranged from exploring whether delegates were ready to adopt the standard to advising how to make the most of its rich data potential. If you were looking for a 360 view of ISO20022, this year’s Sibos was as good a place as any to get it. 

 As far as Iliad Solutions is concerned, ISO20022 has been a core area of our work for a number of years and it’s one of the reasons I went to the Netherlands on behalf of Iliad Solutions earlier this month. Reflecting on the event, it’s clear to me that a couple of important general trends are emerging, underpinning the standard’s vital role in modernising global payment systems.

Firstly, the pace of ISO20022 adoption is now significant. Financial institutions understand that if they don’t talk in ISO20022 language, they’re effectively restricting how they transact. These businesses are also acutely aware that constraints are only set to increase as time goes by.    

Secondly, financial institutions know that huge demand for ISO20022-powered end user experiences is creating new pressures. For instance, adopting ISO20022 involves upskilling IT teams. But this requirement is repeatedly butting up against the internal battle for resources, as implementation competes with myriad technology initiatives, not to mention the day-to-day work of keeping the lights on in terms of maintaining legacy systems.

In short, overcoming the ISO20022 challenge requires a high degree of system modernisation which, in turn, loads ever more pressure onto stretched IT teams.

However, in my view it’s vital that the industry faces up to the conundrum of ‘the need to act’ versus ‘cutting through prohibitive system complexity’. At Iliad Solutions, we’ve learnt from our experience of working on 10 major ISO20022 projects across seven countries that distinct implementation differences exist from organisation to organisation.

Modifications are often unique to each business and not always obvious when initial programme specifications are being drawn up. Crucially, the earlier deviations can be identified, the quicker businesses can move to integration testing and ultimately avoid having to rework a programme. I believe that this problem is very solvable with the right attention to detail and perhaps more openness on the part of the specification owners. 

For that very reason, Iliad Solutions is in the process of defining a ‘generic’ ISO20022 standard for industry use. This won’t be for use in production; instead it creates a baseline to immediately identify issues. It will give banks and financial institutions an instant picture of the elements that need the most attention when new ISO20022 standards are published.

As vendors, we must develop products that simplify and assist with digital transformation, whether that’s the adoption of ISO20022, Open Banking or OpenAPIs.

As for this year’s Sibos delegates, many are sure to have returned to their organisations with renewed enthusiasm to move forward with ISO20022 adoption. They won’t want to be travelling to next year’s event in Toronto without having made a start. Because delaying implementation will eventually result in loss of market share, as customers turn to banking providers who demonstrate an ability to meet their expectations of the kinds of modern digital experiences ISO20022 enables.