The Paytech Show 6:05: A Watershed Moment for Payments – The ISO 20022 Deep Dive

The introduction of ISO 20022 marks a watershed moment for the financial services industry. This rapid migration to this new standard will mean institutions will finally be able to track exactly where their transactions are in the payments journey and that corporates and small businesses alike will have access to an equal and interconnected system in which to communicate freely. 

Heading stateside in this episode of The Paytech Show, the FF News team get acquainted with banking’s biggest financial leaders and infrastructure experts who are working to make ISO 20022 a successful transition for businesses. In the energetic city of Chicago we talked to Ravi Sharma, the Business Manager of the global safety science company, UL Solutions, and over in New York City we virtually met with Isabel Schmidt, the Co-Head of Payments Products at BNY Mellon. We discussed the different needs institutions have in their banking operations and why the adoption of the new standard will ultimately benefit the end customer the most. 

“Financial messaging is all about this massive amount of data and information exchange, where there is a sender and a receiver and they share a common language,” said Sharma. “When we look at ISO 20022, it was originally launched in 2004, and compare it with the most widely accepted message today, ISO 8583 – that came in 1993.” 

Often institutions have had to develop additional components to add to the function of the old 8583 standard. With years in the making, ISO 20022 is finally being integrated into systems with the hopes that it will remedy the current banking ambiguities in transparency and speed. 

“Legacy payment experiences were about moving money from A to B, and not worrying about anything else,” said Schmidt. “We cannot take that approach today, it must be centred on giving clients solutions that are simple, quick and transparent and keeps them in control. That means the payment solutions today must be conceived end-to-end, and in many cases, span across multiple product vertices within a bank.” 

ISO 20022 not only attempts to repair antiquated banking systems but challenges financial institutions to stretch to new technological heights in the realms of high-volume transactions and real-time cross-border payments. By developing ISO 20022, institutions now have the space to get creative.