I so want to know about ISO 20022

Transcription

1 I so want to know about ISO Please feel free to select the slides you need depending on objective and audience. Notes have been added to notes pages. If you have questions, suggestions or need further information, contact us at our internal address When sharing the presentation with customers, thanks for sending PDF not PPT (to avoid notes become public)

2 Agenda Introduction: ISO Refresher Who is using ISO ISO Harmonisation Version and Release Management process Global Market Practices SWIFT for ISO Q&A

3 Why ISO 20022? Payments Treasury & Trade 1973 Securities only 1984 Securities only Proprietary MT ISO 7775 ISO ISO Paper-based Proprietary syntax Point-to-point One size fits all SWIFT only FIN MT: Computer-processable versions of telexes Reference standard Electronic Open, neutral syntax End-to-end transaction Market practice SWIFT + other organisations 3

4 What is ISO 20022? single standardisation approach (methodology, process, repository) to be used by all financial standards initiatives Recipe to create financial standards Body of content Business / Conceptual Defines business meaning of financial concepts, e.g., Credit Transfer Logical Defines e.g. credit transfer messages, to execute the business process Physical Defines physical syntax, e.g. XML Business models Data dictionary Catalogue of messages 4

5 Maintenance process built on strict business justifications and review process - leading to new versions of the messages ISO message catalogue + SWIFT User Handbook More than 20 submitting organisations, besides SWIFT 18 Business Areas - EXAMPLE PAIN = Payment initiation = used in Corporate-to-bank PACS = Interbank clearing and settlement = used in HVP and LVP MI SESE = Securities settlement = used in Securities MI SEMT = Securities management = used in Securities MI MyStandards More than 320 messages, covering payments, securities, trade services, FX, cards 5

6 Standards are created globally and used locally: market practice and variants PACS -pacs FI to FI Customer Credit Transfer HVP-guidelines T2 implementation guidelines Bank s T2 implementation with customers/bank s internal specification ISO messages Global market practice Local market practice Bankspecific practice 6

7 Standards are created globally and used locally: market practice and variants How to create, share and test market practice? Removing optional elements Make optional elements mandatory Limit options Restricting data types Reducing code lists Based on community needs MyStandards Readiness Portal 7

8 A summary : The power of ISO Open, neutral methodology to develop standards Everyone can participate Greater automation Rich, structured data Ease of integration Scenario-based standards facilitating market practice Re-usable message components, electronic message formats (XML Schema s), character set End-to-end business-centric approach The standard is being used! Syntaxindependent model Future-proof Allows for interoperability Data dictionary approach allowing referencing by other standards 8

9 Agenda Introduction: ISO Refresher Who is using ISO ISO Harmonisation Version and Release Management process Global Market Practices SWIFT for ISO Q&A

10 Who is using ISO 20022? A free IOS tablet app, (also as PDF and high-level slide presentation) that provides an overview of initiatives adopting ISO ISO Brought to you by the ISO Registration Authority > 65 initiatives Facilitating adoption and fostering dialogue Information provided by initiative* owners Covers all regions & business segments Easy to use, contribute to and maintain * Initiatives who plan to adopt the official ISO messages registered on 10

11 ISO is being used MIs around the globe lead the way Compliance with regulation/harmonization ENTER Globalization/alignment with other major initiatives Modernization/upgrade of [end-to-end] services Renewal of legacy systems Reputation Interoperability for MI-members with multiple MI-connections 11

12 ISO Adoption Payments MI & initiatives (some examples) From discussion to implementation FI CPA, CA UK DK BY SEPA,EU US retail division of FRB Fed & TCH, US T2, EU JO CH XK CNAPS2, CN Zengin, JP BOJNet, JP EC Live IPFA CO PE CL BR ZA SADC SA IN BD MY SG ASEAN CIPS, CN KH VN BN TH AU PG NZ Snapshot Dec

13 Zoom in: SEPA and TARGET2 / EURO1 Migration to ISO is either complete or soon to come Europe SEPA Integration of Euro area payment schemes Development of new pan-european schemes began in earnest in 2001 after Regulation 2560/2001 ISO selected as a politically neutral Migration was forced through regulation Still some integration barriers to overcome TARGET2(ECB) / EURO1 Moving from MT to MX messages with big bang Before: Synchronized migration, using like-forlike messages// Migration postponed HVP + Cost savings through standards harmonization (SEPA, T2, T2S, EURO1) Source: Lipis Advisors 13

14 Zoom in : China has settled on ISO Lack of legacy and language issues have made ISO an obvious choice Asia Pacific Domestic payments China is using ISO for its major payment systems CNAPS2 (HV&LV) live in 2013 Drivers are unique to China Renewal of legacy systems To be in line with international standards and practices to improve STP and RMB internationalisation (for domestic transactions, CMT (the CNAPS phase I standards developed based on MT messages) was used but had difficulty to map to MT messages for cross-border transactions and hampers STP) ISO provides more flexibility to fulfill local market regulations and practices, at the same time supports Chinese character (local regulation requires strict match of account name and account no. for settlement which requires Chinese character in messages) Export driven economy needs to deal with western alphabets and Chinese Little use of ability to carry extended remittance data Domestic system limit data to 60 characters There is also high demand to adopt ISO for corporate to bank communications Source: Lipis Advisors 14

15 High value payments in USA headed to ISO Low value payments are likely to follow Fedwire / CHIPS High-value payments The Federal Reserve and The Clearing House have agreed to migrate from their legacy format to ISO Timeline 2015/ TBD Detailed planning Finalize planning & announce specs Develop & test Customer testing Begin rollout Rollout complete & sunset legacy NB: The Clearing House -> Real Time Payment in ISO20022 (EU: Instant Payment/UK Faster Payment) Pilot Q ACH Low value bulk payments Americas NACHA has an XML-ACH Remittance Opt-in program that allows participants to transmit ISO payment remittance information for B2B transactions via the ACH network. RTP Real-time retail payments TCH s RTP solution is fully ISO based and enters into pilot phase Q Drivers for adoption Global momentum Global competition Cost savings and processing efficiency Consistent and rich data Interoperability Agility to meet evolving needs New, innovative products Source: Lipis Advisors 15

16 Status overview Payments MI some examples Initiative Status (Planned) live date EU-SEPA (33 countries) Live Singapore - FAST Live 2014 IPFA Live 2010 IN - RTGS Live 2013 SADC (LVP) Live 2016 DK Intraday and Real-time Live 2013 JP - New-BOJNet Live 2015 Brunei LVP Live 2014 ASEAN Under discussion To be determined TH ITMX e-payments - LVP Under discussion To be determined CH Planned (phased) ( ) AU-LVP Planned (2017) CA-all payment systems Planned (2020) CN (HV and LV) Live 2013 RTGS Bangladesh Live 2015 Kosovo Live 2016 T2 Planned To be determined UK Planned To be determined USA (Fed and TCH) Planned (2020) G Treasury SS, Snapshot LLC 2008 Jan

17 ISO Adoption Real Time Payments initiatives From discussion to implementation (some examples) Finland Sweden - Bankgirot Payments Canada TCH, US TIPS - ECB France and Belgium Denmark - Nets EBA Instant Payment Poland Elixir Express Hungary SEPA SCT Inst Spain Netherlands Honk Kong SG - FAST AU- NPP Snapshot Jan

18 Status overview RTP initiatives some examples Initiative Status (Planned) live date SEPA SCT Inst (33 countries) Planned (2017) Singapore - FAST Live 2014 DK Intraday and Real-time Live 2013 AU- NPP Planned (2017) CA-all payment systems Planned (2020) Spain Planned (2017) TCH Planned (2020) Finland Planned (2017) Sweden (Bangkirot) Live 2012 TIPS - ECB Investigation (2018) EBA Instant Payment Planned (2017) Honk Kong Planned (2018) Poland Live 2012 France Planned (2017) Belgium Planned (2017) The Netherlands Planned (2019) G Treasury SS, Snapshot LLC 2008 Jan

19 ISO adoption in the corporate-to-bank space (some examples) NO CA BE IE NL DK SE DE FI RU MX PA CO Over 100 members (corporates and banks) defining common global implementation guidelines US UK BM MQ FR MC IT PT BR SEPA ES Based on CGI guidelines AT LU LI HU KW SA ZA SK CH AE LB MU QA OM SWIFT for Corporates Cash management HK CN SG KR JP PH MY AU NZ 19 G Treasury Snapshot SS, Jun LLC

20 ISO Adoption Securities MI & Treasury MI (some examples) From discussion to implementation VP Norway DTCC, US T2S, EU Euroclear, ESES NBB-SSS, BE LCH.Clearnet, UK VP Lux Euroclear FI VP Sec DK OeKB, AU TR KDPW CCP, PL IR CSD, LI EVK, EE CSD, LT CN NSD, RU HK JASDEC, JP [Post-trade] JASDEC & TSE, JP [Corp.Act] SGX [Corp.Act] SGX [Post-trade] MY BN Galgo, BR SADC IDX [Corp.Act] ASX [Corp.Act] CLS KSEI [Post-trade] Securities MI Treasury MI 20 Snapshot July

21 Status overview Securities & Treasury MI Initiative Status Planned live date FR-Euroclear / Funds Live Live Clearstream/Funds Live Live US- DTCC/Corporate Actions Live Live BR-Galgo Live Live AU- ASX-Corporate Actions CA - Live Live ID IDX Corporate Actions ID KSEI Post-Trade IDX Live KSEI - Planned IDX KSEI JP- JASDEC Post-Trade Services Live 2014 CLS Live 2015 T2S Planned SG - SGX Corporate Actions SGX Post-Trade Corporate Actions - Live Post-Trade Live CA Post-Trade - Jul 2016 HK HKMA CMU Corporate Actions Live Aug 2016 Euroclear ESES Live Nov 2016 Euroclear FI Live 2015 DK - VP Securities CA Live S&R phased CA 2015 S&R 2016 Domestic settlement BE - NBB-SSS Live Jan 2015 KDPW Live 2013 Snapshot Jan

22 ISO Adoption Non MI, Regulator initiatives SFTR CTCCR, RU EMIR SMMD & MMSR MiFID II / MiFIR 22 Snapshot July

23 Status overview Regulatory Reporting Initiative Status Planned live date MiFID II / MiFIR Planned Jan 2018 MMSR & SMMD Live Apr 2016 Securities Financing Transaction Regulation (SFTR) Planned Jul 2018 EMIR Live Aug 2016 Cross-border Transactions Currency Control Reporting (CTCCR) in Russia Live 2016 Snapshot July

24 ISO Adoption SWIFT for Funds LU BE NL DK NO SE FI GB IE EE PL RU CA GG JE FR CZ SK US MX BM LC ES PT AD CH MC LI IT AT SM SI MT GR HU RO DE IL CN TW KR JP CP BB BH AD HK PH SN SG SB ST BI ID This map shows countries where one or more players are sending/receiving ISO based Funds transactions. This includes major MI Funds hubs such as Clearstream, Euroclear, Benefit Trust Company Funds Messaging, Hong Kong (HKMA), Korea (KSD), Taiwan (TDCC)* etc. * Indirect SWIFT adoption via service providers: BBHi, Calastone, Euroclear ZA AU Snapshot Jul G 2016 Treasury SS, LLC

25 ISO for Trade - SWIFT BPO/TSU DK SE FI US PE CA CL AR BR GB NL FR ES MA GH BE SI IT NG DE SO KE ZA CH AT BG GR OM QA TR LB JO KW IN UAE MU SA PK LK MY CN VN TH SG KR HK ID JP TW PH AU This map shows countries where one or more banks are sending/receiving ISO based 25 BPO/TSU transactions. Snapshot Mar 2016

26 ISO for Cards nexo A.I.S.B.L CA FR DE PT ES Snapshot Jul

27 Agenda Introduction: ISO Refresher Who is using ISO ISO Harmonisation Version and Release Management process Global Market Practices SWIFT for ISO Q&A

28 Towards a harmonised use of ISO Call made by global and regional Financial Institutions 1 2 Less variation, more global market practice on ISO Provide a predictable environment for MI communities (versions, release mgmt..) 3 Best practice sharing for community adoption & implementation

29 The ISO Harmonisation Framework Principles the answer of the MI Summit Publication Publish your standards information in a consistent format on MyStandards [messages/versions used, release timeline, market practice] Market Practice Adherence Define and document further market-or service-specific usage guidelines (using global MP as basis) Adhere (where possible) to global ISO market practice Market practice Remain up-to-date with ISO standards release Synchronize standards upgrades with industry MT release cycle Adopt latest message version for any new project Version & release management Information sharing Share information on ISO messages, versions and market practice used with other Market Infrastructures

30 The ISO Harmonisation Framework Endorsement and Support Market Practice Release management MyStandards Endorsing MIs Supporting MIs* Nov 2016 Payments markets Securities markets FX markets ACH Colombia Bank of Canada Central Bank of Kosovo Hong Kong Interbank Clearing National Bank of Ukraine Payments Canada SADC ** Endorsing Supporting APCA Banca d Italia Bank of England Deutsche Bundesbank EBA ECB Supporting Reserve Bank of South Africa The Clearing House US Federal Reserve * MIs that are part of the MI Summit, except PMPG and SMPG ASX Barbados Stock Exchange & Barbados Central Securities Depository Clearstream Euroclear Hong Kong Exchanges and Clearing Jamaica Exchange/CSD KDPW LCH National Bank of Belgium NSD OeKB CSD SGX VP Lux VP Securities Denmark VPS Norway Endorsing Ukrainian National Securities and Stock Market Commission DTCC Jasdec Supporting CLS SMPG PMPG Endorsing Supporting ** SADC Banking Association is representing the following countries: Angola, Botswana, Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, G Treasury Zambia, SS, Zimbabwe LLC

31 Agenda Introduction: ISO Refresher Who is using ISO ISO Harmonisation Version and Release Management process Global Market Practices SWIFT for ISO Q&A

32 Positioning version and release cycle alignment in the Harmonisation Charter The pure ISO standard leaves too much flexibility, preventing consistency and cost efficiencies Versions: several versions of a same message can be used forever, at discretion of FMI for its community Release cycle: each FMI can decide independently when to adopt new message versions A call for alignment ISO Best Practice Upgrade with every 1 Categorise MCR 2 new message 3 version Apply annual release cycle 32

33 Best practice 1: Categorising Change Requests SWIFT analyses impact of MCRs on ISO base messages 1 No impact 2 Mandatory impact 3 E.g. Add mandatory field Unclassified impact E.g, Reduce length of optional field or Add optional field Yes Used by selected community? FMI analyses impact on its community No change Business change Technical change Version increase No Yes Yes Back-office update No Yes No No 33

34 Best practice 2: Upgrade with every new message version. to allow Financial Institutions to use 1 version across FMIs FMI to upgrade to every new message version If and When it arrives Independent of the reason for the new message version (technical/business) Applies to steady state situation only, so not during migration 34

35 Best practice 3: Apply annual release cycle Illustration of Release cycle for SR 2016

36 Conclusion ISO Best Practice recommendations. approach requested by FIs, approved by FMIs Alignment with FIN/MT release Minimise annual implementation cost Bundling of ISO CRs Effective as of Standards Release

37 Agenda Introduction: ISO Refresher Who is using ISO ISO Harmonisation Version and Release Management process Global Market Practices SWIFT for ISO Q&A

38 Payments Securities ISO market practice for securities and payments Available Ongoing Future Investment Funds - Defined by the Securities Market Practice Group (SMPG) - Published on and MyStandards Settlement and related services used by TARGET2 Securities (T2S) - Published on MyStandards Collateral management for communications between CCP and CMs - Published on MyStandards Settlement and reconciliation Creation of generic settlement templates (for use outside T2S markets) => 90% done - Work will be finalised by Q Corporate actions Work will start end of 2016/early 2017 (CA Notification as a start) Proxy Voting Cash management Post-trade High Value Payments - Sponsored by the Payments Market Practice Group (PMPG) - Like-for-Like approach - Published on MyStandards Real Time Payments - Ongoing work by ISO Real Time Payments Group (RTPG) 70 stakeholders from 17 countries - Covers payments initiation, Clearing & settlement and investigation handling - Published on the ISO Website High Value Payments Plus - Sponsored by the PMPG - Beyond like-for-like - Phase I ongoing and work to be published on MyStandard (By Q1, 2017) Low Value Payments No demand to-date Status: Nov 2016

39 HVPS+ HVPS Context of HVPS+ HVPS available today! Why? How & Who? What? MyStandards > Ensure interoperability and that ISO based RTGS implemented consistently > Like-for-like backward compatibility with existing (MT) standard > Kick-started as of ISO harmonisation initiative > New wave of HVP MI initiatives > Taking into account benefits of ISO > Sponsored by Payments Market Practice Group (PMPG) > Taskforce group consisting of MIs and FIs > 3 different membership categories > 7 formal usage guidelines > Translation rules to/from MT > Communication flows > Build on existing HVPS and deliver additional guidelines to support global interoperability > Phase 1 First set of 7 implementation guidelines > Published on MyStandards > Documentation (PDF, XLS) > Processable formats (XSD) HVPS+ planned for Q1 2017

40 HVPS+ positioned in the standards sphere Generic ISO message set: - eg pacs FI to FI Customer Credit Transfer Scope of HVPS+ workshop: creation of global implementation guidelines for generic message set that reflect current and evolving requirements of HVPS space Local communities can use the HVPS+ guidelines as a basis to further define their local guidelines (taking into account specific local requirements) Generic ISO payments clearing and settlement messages Global ISO HVPS+ market practice/impleme ntation guidelines Local ISO HVPS+ market practice /implementation guidelines HVPS like-for-like guidelines: existing set of guidelines that guarantee interoperability with FIN MT in crossborder space ISO HVPS implementation guidelines [like-for-like] 40

41 HVPS+ - Scope of delivery and timeline Ensure a common roll-out and implementation of ISO for HVPS communities who wish to move beyond the existing pure like-for-like HVPS guidelines Phase 1 Revisit existing HVPS Market Practice & Implementation Guidelines (pacs.008, pacs.009) & new requirements: > camt refund request > camt answer to camt.056 > pacs status > pacs return Planned end date: Q Phase 2 Additional messages such as for Liquidity Management and Reporting, as well as the Business Application Header Date to be determined in Dec 2016

42 HVPS+ contributors Taskforce consisting of MIs with ISO adoption plans (moving prom proprietary or FIN MT) and MI member banks (> PMPG member banks, also involved in GPI) Market infrastructures APCA - Australia Banca di Italia - Italy Bank of England EBA Clearing - France European Central Bank Deutsche Bundesbank - Germany Federal Reserve Bank of New-York - US Hong Kong Interbank Clearing Limited Payments Canada South African Reserve Bank The Clearing House - US Banks First Rand Bank Ltd South Africa Société Générale - France Standard Bank South Africa PMPG Member representing The Netherlands PMPG member representing the UK PMPG Member representing the US

43 New membership as of September 2016: Term Of Reference 1. Core members > > 2. Advisers 3. Observers Fixed group of ISO MI Summit members with ISO migration plans & PMPG sponsored Banks > Participation at HVPS+ meetings > Advise on discussed content > Voting right MIs that have already adopted ISO and accept to share their experience > Participation at HVPS+ meetings > Advise on discussed content > No right to vote or to influence Parties (MIs, Banks, Vendors, Standardisers, Market Practice Setters) who want to be kept informed > Consultation of HVPS+ specifications > Opportunity to provide feedback to core members for discussion by core group Membership requests:

44 Agenda Introduction: ISO Refresher Who is using ISO ISO Harmonisation Version and Release Management process Global Market Practices SWIFT for ISO Q&A

45 SWIFT: your one-stop-shop for ISO ISO Standards Platform/infrastructure Migration enablers P r o d u c t s S e r v i c e s 45

46 SWIFT standards and ISO Complete portfolio of ISO standards All relevant business domains Registration authority Contributor to content SWIFT is the golden source of ISO knowledge In-depth knowledge of models, data dictionary and messages SWIFT has unparalleled expertise in ISO adoption Supports communities with adoption Contributes to market practice groups Insights into global adoption SWIFT has tools and services for standards & market practice management MyStandards & Readiness Portal 46

47 SWIFT standards and ISO How to manage market practices? Collaboration and best practice sharing in market practice groups SWIFT has unique market practice expertise and tools to mitigate risk MyStandards Tools (MyStandards & Readiness Portal) to create, compare, publish, share, harmonize, implement and test market practices Services to help communities assess, analyse, map, create and maintain practices 47

48 SWIFT standards and ISO Expertise from the source Get access to experienced standards experts who: have developed the ISO standards Are up-to-date on global and local market practice Know the tools and methodology inside out - Strategy and impact assessment - - Standards analysis - Message and market practice design Reduce time & cost for ISO standards adoption, specification and implementation More than 100 standards projects for more than 70 clients. Involved in all major ISO initiatives around the world 48

49 SWIFT : your one-stop shop to support your ISO project B A S I C S Messaging FileAct InterAct SWIFTNetCopy Interfaces Access Lite2 Solution Management / CUGs User administered Integration AMH IPLA Converter SWIFT administered Message version management Access management ISO S T A N D A R D S S t a n d a r d s V A L U E A D D S Services ISO consulting and training services Tools and content MyStandards MyStandards Base Library On-boarding portal MI test portal (T2S) Packaged content Re-usable, customisable mapping logic, e.g. for Funds 49

50 Questions? 50