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Payments to Suppliers. accept payments. salary. FX. Cross-border payments. All of these important banking functions are affected by the modernization of the global payments industry. The new messaging standard, ISO 20022, is making the payment process more efficient for banks, markets and customers around the world.
Banks will have to adopt ISO 20022 while also addressing the growth in payment volumes through faster, real-time payments. This article describes related challenges and opportunities.
ISO 20022 is an international electronic messaging standard for relaying messages between financial institutions. As an international standard, it serves as a common language for transmitting and exchanging payment data, improving interfaces between financial institutions, payment schemes and businesses around the world. The more consistent the information shared between parties, the more efficient the payment process.
ISO 20022 messages are richer than previous standards as they can contain more structured data than previous standards. Rich data increases transparency and reduces delays caused by inconsistent or unstructured data that require manual intervention.
Today, ISO 20022 is one of the biggest challenges in the payments sector. On the one hand, the move to a standardized global payment model is a huge benefit, facilitating things like auto-reconciliation and bill payments. But for banks and businesses, ISO 20022 means upgrading all payment systems. No matter how easy and seamless the new global standard may be, getting there isn’t easy.
Without an ISO 20022 native payment system, banks would need a translation layer between the payment system and the market scheme. Not only is this slower than two ISO 20022 systems communicating directly with each other, but banks lose data in the process. When data is lost, so are some of the insights that ISO 20022 provides.
Watch this FMLS22 webinar on the future of payments: The revolution isn’t wired.
Previously served almost exclusively by SWIFT, cross-border payments pose similar challenges for banks. SWIFT Global Payments Innovation (GPI) aims to improve the experience of payments through the SWIFT network. By enabling visibility and tracking through our interbank network, SWIFT brings transparency to fees, charges, FX rates and processing times. While this has improved the efficiency of cross-border payments, it has brought another area that banks have to maintain and that is still evolving.
Professional payment providers such as Currency Cloud and Visa B2B Direct offer alternative cross-border payment solutions, allowing banks to offer more options to their corporate customers. To achieve these, banks will need to integrate with multiple payment technology providers. This is difficult and slow with traditional cores, but much easier with SuperCore by 10x Banking, our core banking platform with open APIs.
Payments evolve globally with the move to ISO 20022. Enriched payment data means less manual intervention, more resilience, the ability to perform behavioral predictions, and tighter fraud management. A successful implementation reduces IT complexity, complies with local regulatory standards, and enables seamless integration with clients and technology partners.
In the short term, adding an ISO 20022 translation layer to a complex banking infrastructure could solve the problem. However, the challenge of reducing complexity remains as ISO-native architectures become the industry-wide standard in the long term.
A cloud-native core offers banks a way to move away from monolithic architectures that slow them down and hinder them. Instead, banks can take full advantage of ISO 20022 and future industry developments to become more agile and fast-paced.
Payments to Suppliers. accept payments. salary. FX. Cross-border payments. All of these important banking functions are affected by the modernization of the global payments industry. The new messaging standard, ISO 20022, is making the payment process more efficient for banks, markets and customers around the world.
Banks will have to adopt ISO 20022 while also addressing the growth in payment volumes through faster, real-time payments. This article describes related challenges and opportunities.
ISO 20022 is an international electronic messaging standard for relaying messages between financial institutions. As an international standard, it serves as a common language for transmitting and exchanging payment data, improving interfaces between financial institutions, payment schemes and businesses around the world. The more consistent the information shared between parties, the more efficient the payment process.
ISO 20022 messages are richer than previous standards as they can contain more structured data than previous standards. Rich data increases transparency and reduces delays caused by inconsistent or unstructured data that require manual intervention.
Today, ISO 20022 is one of the biggest challenges in the payments sector. On the one hand, the move to a standardized global payment model is a huge benefit, facilitating things like auto-reconciliation and bill payments. But for banks and businesses, ISO 20022 means upgrading all payment systems. No matter how easy and seamless the new global standard may be, getting there isn’t easy.
Without an ISO 20022 native payment system, banks would need a translation layer between the payment system and the market scheme. Not only is this slower than two ISO 20022 systems communicating directly with each other, but banks lose data in the process. When data is lost, so are some of the insights that ISO 20022 provides.
Watch this FMLS22 webinar on the future of payments: The revolution isn’t wired.
Previously served almost exclusively by SWIFT, cross-border payments pose similar challenges for banks. SWIFT Global Payments Innovation (GPI) aims to improve the experience of payments through the SWIFT network. By enabling visibility and tracking through our interbank network, SWIFT brings transparency to fees, charges, FX rates and processing times. While this has improved the efficiency of cross-border payments, it has brought another area that banks have to maintain and that is still evolving.
Professional payment providers such as Currency Cloud and Visa B2B Direct offer alternative cross-border payment solutions, allowing banks to offer more options to their corporate customers. To achieve these, banks will need to integrate with multiple payment technology providers. This is difficult and slow with traditional cores, but much easier with SuperCore by 10x Banking, our core banking platform with open APIs.
Payments evolve globally with the move to ISO 20022. Enriched payment data means less manual intervention, more resilience, the ability to perform behavioral predictions, and tighter fraud management. A successful implementation reduces IT complexity, complies with local regulatory standards, and enables seamless integration with clients and technology partners.
In the short term, adding an ISO 20022 translation layer to a complex banking infrastructure could solve the problem. However, the challenge of reducing complexity remains as ISO-native architectures become the industry-wide standard in the long term.
A cloud-native core offers banks a way to move away from monolithic architectures that slow them down and hinder them. Instead, banks can take full advantage of ISO 20022 and future industry developments to become more agile and fast-paced.
