ISO 20022: Translate or embrace?
ISO 20022 Webinar: We recently hosted a webinar on Practical Preparations for ISO 20022, where we were joined by Peter Hoogervorst, Head of Transaction Banking Products Asia, Credit Agricole Corporate and Investment Bank, and Convenor of the ISO 20022 Standards Evaluation Group for Payments. The session provided a great opportunity for us to take questions and comments from members of the community.
Banks and corporates alike are operating – like everyone – in a challenging environment right now and with ISO 20022 deadlines pushed back, it can be tempting to put the project to one side. However, what came out of the webinar was that whether banks wish to take a transformational approach and really embrace the standard, or find a short term translation work around until they are in a position to launch a bigger project, they simply do not have the luxury of delaying. For banks which are struggling to devote bandwidth to the ISO 20022 question, I believe there are three priorities:
Decide on your approach: As alluded to above, there are two roads which banks can choose to go down when it comes to ISO 20022 solutions. Translate or embrace? The first is fast, pragmatic, and likely to be highly tempting for banks facing pressure from time or resource constraints or just consumed by other priorities in today’s challenging and unpredictable environment. Banks have the option – at least for now – to use translation tools which enable them to interpret messages sent and received in the new standard. SWIFT itself offers such a solution, although we are finding that many firms are choosing to work with independent vendors instead out of a reluctance to be too reliant on the organisation. Whilst this approach may be appealing, it also means missing out on many of the rich benefits which ISO 20022 brings.
Identify key stakeholders: With payments being such a core part of what banks do on a day to day basis, it stands to reason that a diverse array of functions would be affected by the ISO 20022 migration. The biggest changes will impact the payments centric departments but given their fluency in the lingua-franca of finance they are well placed for the changes ahead. It is other functions, which have less hands on payments interaction, that are more likely to struggle. Banks should begin work now to identify these areas of the business, engage with them to understand their ISO 20022 messaging related needs and challenges, and educate key stakeholders on the new standard and what it means for them.
Assess the practical implications: Whichever path you choose – fully embrace the new standard or simply translate from the new to the old – there will be practical challenges to overcome, some of which will require significant allocation of resources. At a time where banks are expected to do more with less, it is important to really understand what the systemic changes of ISO 20022 messaging mean for your organisation and assess whether or not you have the resources to tackle them. Large scale changes to your architecture will require specialist skills and these will need to be drawn from a pool of experts who are likely to find themselves increasingly in demand as migration ramps up. International banks which are heavily reliant on complex legacy systems may also discover that even relatively small changes consume a great deal on bandwidth due to the complications of legacy.
Whether you are looking to start an ISO 20022 transformation project or are searching for a fast, easy translation solution for ISO 20022 format messages, we can help. Contact our team below to discuss.