Introduction to iso 20022 universal financial industry message scheme
This presentation is the property of its rightful owner.
Sponsored Links
1 / 52

Introduction to ISO 20022 – Universal financial industry message scheme PowerPoint PPT Presentation


  • 42 Views
  • Uploaded on
  • Presentation posted in: General

ISO 20022. Introduction to ISO 20022 – Universal financial industry message scheme. Agenda. ISO 20022: Value proposition The standard The actors The registration process The Repository ISO 20022 registration platform Cross industry harmonisation

Download Presentation

Introduction to ISO 20022 – Universal financial industry message scheme

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Introduction to iso 20022 universal financial industry message scheme

ISO 20022

Introduction to ISO 20022 – Universal financial industry message scheme

ISO_20022_LV_v64


Agenda

Agenda

  • ISO 20022:

    • Value proposition

    • The standard

    • The actors

    • The registration process

    • The Repository

  • ISO 20022 registration platform

  • Cross industry harmonisation

  • Interoperability within the financial industry

  • Q&A

ISO_20022_LV_v64


The iso 20022 value proposition 1 5

The ISO 20022 value proposition (1/5)

Objective

To enable communication interoperability between financial institutions , their market infrastructures and their end-user communities

Major obstacle

Numerous overlapping standardization initiatives looking at XML financial messages:

MDDL, FIX, FinXML, VRXML, RIXML, XBRL, FpML, IFX, TWIST,

SWIFT, RosettaNet, EPC, OAGi, ACORD, CIDX, etc.

ISO_20022_LV_v64


The iso 20022 value proposition 2 5

The ISO 20022 value proposition (2/5)

Proposed solution

A single standardisation approach (methodology, process, repository) to be used by all financial standards initiatives

ISO 20022

ISO_20022_LV_v64


The iso 20022 value proposition 3 5

The ISO 20022 value proposition (3/5)

Convergence into ONE standard is the long term objective…

… but in the interim several standards need to coexist to enable quick response to competitive pressures and regulatory demands

ISO_20022_LV_v64


The iso 20022 value proposition 4 5

The ISO 20022 value proposition (4/5)

Growth adds exponential complexity and expense…

  • Without common building blocks:

  • Point-to-point connection

  • Data is mapped directly from one application to another

  • Costly, unscalable and difficult to implement and maintain

  • Process, routing, rules logic needs to be coded to specific message types

EDIFACT

RosettaNet

IFX

SWIFT

Proprietary format

OAGi

TWIST

42 interfaces = n * (n-1)

Source: John Mersberg, IBM Corporation

ISO_20022_LV_v64


The iso 20022 value proposition 5 5

The ISO 20022 value proposition (5/5)

Standardized implementation reduces cost, time to effect change and improves overall performance…

  • Canonical message model =

  • True process integration

  • Reduced brittleness, faster to respond to change

  • Shared message services – single/shared parser, message independent rules engine, etc.

  • Unified monitoring / audit trail

RosettaNet

EDIFACT

SWIFT

IFX

Proprietary format

Canonical

Message Model

(i.e. ISO 20022)

OAGi

14 interfaces = n * 2

TWIST

ISO aims at long term convergence,

while facilitating short term coexistence…

ISO_20022_LV_v64


Iso 20022 illustrating business modelling

Date

Account

Order

All institutions have their own sets of data objects

Order

Date

…and groups them into ‘syntax-neutral’ message models, which...

Date

… can be ‘transformed’ in message formats in the desired syntax

ASN.1

XML

ISO 15022

FIX

ISO 20022Illustrating business modelling

ISO standardizes common data objects…

ISO_20022_LV_v64


The iso 20022 recipe main ingredients 1 2

The ISO 20022 recipeMain ingredients (1/2):

  • Modelling-based standards development

    • Syntax-independent business standard

    • Validated by the industry

  • Syntax-specific design rules for XML

    • Predictable and ‘automatable’

    • Protect standard from technology evolution

  • Reverse engineering approach

    • Protect industry investment and ease interoperability

    • Prepare for future migration

ISO_20022_LV_v64


The iso 20022 recipe main ingredients 2 2

The ISO 20022 recipeMain ingredients (2/2):

  • Development / registration process

    • Clearly identified activities and roles

    • Business experts and future users involved upfront

    • Technical experts involved when required

  • Repository on the ISO 20022 website

    • Business Process Catalogue & Data Dictionary

    • Outside of official standard (maintained by registration bodies)

www.iso20022.org

ISO_20022_LV_v64


The six parts of iso 20022

The six parts of ISO 20022

Copies can be obtained from www.iso.org

ISO_20022_LV_v64


Iso 20022 the actors 1 2

ISO 20022: The actors (1/2)

Submitting organisations

Communities of users or organisations that want to develop ISO 20022 compliant messages to support their financial transactions

Could be

ISO_20022_LV_v64


Iso 20022 the actors 2 2

ISO 20022: The actors (2/2)

  • Registration Management Group, RMG

    • Overall governance, court of appeal

    • Approve business justifications for new standards

    • Create Standard Evaluation Groups (SEGs)

  • Standards Evaluation Groups, SEGs

    • Represent future users in specific financial areas

    • Validate candidate message standards

  • Registration Authority, RA

    • Ensure compliance

    • Maintain and publish ISO 20022 Repository

  • Technical Support Group, TSG

    • Assist RMG, SEGs, RA and submitting organisations

ISO_20022_LV_v64


Iso 20022 the registration process 1 3

Financial industry group or standards body

Submitting

organisation

R

M

G

m

o

n

i

t

o

r

s

Project approval & allocation to a SEG

RMG

Development & provisional registration

Submitter

& RA

SEG

RA

Repository

Dictionary

Catalogue

ISO 20022 The registration process (1/3)

Business justification

Business

justification

Business validation

Official registration

and publication

Optional pilot testing

or first implementers

Submitter

& users

www.iso20022.org

ISO_20022_LV_v64


Iso 20022 the registration process 2 3

Financial industry group or standards body

Submitting

organisation

R

M

G

m

o

n

i

t

o

r

s

Project approval & allocation to a SEG

RMG

Development & provisional registration

Submitter

& RA

SEG

RA

Repository

Dictionary

Catalogue

ISO 20022 The registration process (2/3)

Business justification

Business

justification

Candidate ISO 20022 messages

Business validation

ISO 20022 messages

Official registration

and publication

Optional pilot testing

or first implementers

Submitter

& users

www.iso20022.org

ISO_20022_LV_v64


Introduction to iso 20022 universal financial industry message scheme

ISO 20022 The registration process (3/3)

1

Registration

Management

Group

Business justification

Registration

Authority

Standards Evaluation

Groups

IFX

FPL

Securities

ISO 20022 Financial Repository

2

CLS

Business models

Payments

ISO 20022 users

Data Dictionary

SWIFT

Trade services

3

Candidate ISO 20022 messages

4

Euroclear

Forex

ISO 20022 messages

Business Process Catalogue

Cards

EPASOrg

www.iso20022.org

ISO_20022_LV_v64


Iso 20022 the financial repository

ISO 20022 - The Financial Repository

  • Data Dictionary

    • Business Concepts

    • Message Concepts

    • Data Types

  • Business Process Catalogue

    • Financial business process models

    • Financial business transactions, including messages

    • XML message schemas

www.iso20022.org

ISO_20022_LV_v64


Iso 20022

Continuing with today’s agenda…

ISO 20022

ISO 20022 Registration Platform

ISO_20022_LV_v64


Iso 20022 the deployment

ISO 20022 - The Deployment

  • Approval of the international standard 

  • Selection of the Registration Authority 

  • Set-up of the www.iso20022.org 

  • Creation of Registration Management Group 

  • Creation of the first Standards Evaluation Groups 

  • Registration and publication of first ‘ISO 20022 messages’ 

Ongoing: promotion to developers (standardizers, industry bodies) and users (vendors, end-users)

ISO_20022_LV_v64


Iso 20022 how does it fit into the iso structure

ISO 20022 How does it fit into the ISO structure?

ISO Technical Committee TC68

Financial Services

SC2

Security

SC4

Securities

SC7

Banking

ISO 20022

RMG

WG4

ISO 20022

Review

TSG

RA

RMG members nominated by P-member countries and A-liaison organisations

TSG & SEG members nominated by all member countries and liaison organisations

SEG

Securities

SEG

Trade Services

SEG

Payments

SEG

FX

SEG

Cards

ISO_20022_LV_v64


Iso 20022 registration management group rmg

ISO 20022 Registration Management Group (RMG)

  • Members - 70 senior managers from:

    • 22 countries: AT, AU, BR, CA, CH, CN, DE, DK, FI, FR, GB, IT, JP, KR, LU, NL, NO, RU, SE, SG, US, ZA.

    • 12 liaison organisations: Clearstream, ECB, Euroclear, FISD, FPL, FpML, IFX, ISITC, SWIFT, TWIST, UN/CEFACT/TBG5, VISA

  • Convener:Gerard Hartsink, ABN Amro (NL); Vice-convener: Bob Blair, JPMorgan Chase (US); Secretary: Cynthia Fuller, X9 (US)

  • Meetings:twice a year

  • Key decisions:

  • Creation of five SEGs: Payments and Securities in 2005, Trade Services and Forex in 2006, Cards & Related Retail Financial Services in 2008

  • Approval of 42 development projects

ISO_20022_LV_v64


Iso 20022 the payments seg 1 3

ISO 20022 – The Payments SEG (1/3)

  • Members – 55 experts

    • 17 countries: AT, AU, CH, DE, DK, FI, FR, GB, IT, JP, KR, NL, NO, RU, SE, US, ZA

    • 6 liaison organisations: Euroclear, IFX, ISITC, SWIFT, TWIST, UN/CEFACT/TBG5

  • Convener:Thomas Egner, Commerzbank (DE); Vice-convener: Bob Blair, JP Morgan Chase (US); Secretary:Deb Hjortland, FRB (US)

  • Approved:C2B payment initiation (SWIFT/ISTH), Interbank credit transfers and direct debits (SWIFT), Exceptions and investigations (SWIFT), B2C advice & statement (ISTH/ISITC), Mandates (SWIFT) , Change/verify account identification (GUF), Bank account management (SWIFT), Creditor payment activation request (CBI Consortium)

  • Under evaluation: Cash account reporting request and notification (SWIFT)

  • Next:Cash management (SWIFT), Cash lodgement and withdrawal (NBB), Card clearing payments (Berlin Group), Real time payments (Payments Council Ltd – UK)

ISO_20022_LV_v64


Iso 20022 the payments seg 2 3

ISO 20022 – The Payments SEG (2/3)

Covering instruments such as:

Payments

Credit transfers

Covering actors such as:

Cheques

Financial institutions

Direct debits

Clearing houses & RTG systems

Private & corporate customers

Central banks

ISO_20022_LV_v64


Iso 20022 the payments seg 3 3

ISO 20022 – The Payments SEG (3/3)

Clearing & settlement

Including business areas such as:

Interbank transfers via correspondent banking or ACHs, high value payments, low value bulk payments, RTGS, etc.

Payment initiation

Communications between the ordering customer and its bank, etc.

Payments

Cash Management between various actors:

…to the ordering & beneficiary customers, reconciliation, exceptions & investigations handling.

Account opening, standing orders, transaction and account information, advices & statements from …

...the account servicing institutions to account owners, including reporting from the financial institution…

ISO_20022_LV_v64


Iso 20022 the securities seg 1 3

ISO 20022 – The Securities SEG (1/3)

  • Members – 75 experts

    • 20 countries: AU, BR, CA, CH, DE, DK, FI, FR, GB, IE, JP, LU, NL, NO, RU, SE, SG, TR, US, ZA

    • 8 liaison organisations: Clearstream, ECB, Euroclear, ISDA/FpML, ISITC, FISD, FPL, SWIFT

  • Convener: Kevin Wooldridge, Standard Logic (UK); Vice-convener: Amod Dixit, Standard Chartered (SG); Secretary: Chad Spitler, BGI (ISITC)

  • Approved: Investment funds (SWIFT), Transaction regulatory reporting (SWIFT), Proxy voting (SWIFT), Issuer’s agents communication for CA (Euroclear), FPP report (SWIFT) , Corporate actions (SWIFT), Settlement & reconciliation (SWIFT)

  • Under evaluation: Pre-trade/trade (SWIFT/FPL)

  • Next: Total portfolio valuation statement (ISITC), Post-trade (SWIFT/Omgeo), Registration & holder identification (Euroclear), Market claims & automatic transformations (Euroclear), Securities issuance (Euroclear), Triparty collateral management (SWIFT), Alternative funds (SWIFT) , Modification/replace & allegement response (SWIFT), Target2-Securities (SWIFT/Bundesbank on behalf of 4CB), CCP Clearing (FPL/SWIFT), Collateral Management (FPL, FpML, ISITC, SWIFT), Investment Fund Prospectus (ANBIMA)

ISO_20022_LV_v64


Iso 20022 the securities seg 2 3

ISO 20022 – The Securities SEG (2/3)

Covering instruments such as:

Securities

Equities

Service bureaux

Covering actors such as:

Fixed income

Investment managers, distributors, transfer agents, fund administrators

Broker / dealers

Funds

Custodians

Deriva-tives

Regulators

CSDs, ICSDs

Stock exchanges, ETC providers

Market Data Providers

Clearing houses, CCPs

ISO_20022_LV_v64


Iso 20022 the securities seg 3 3

ISO 20022 – The Securities SEG (3/3)

Including business areas such as:

Clearing & settlement

Trade, post-trade

Trade Initiation, pre-trade

Securities Issuance

Securities

Custody

Income, corporate actions, market data, proxy voting

Account opening, standing orders, transaction and account information, advices & statements, queries & investigations

Collateral management

Collateral, repos, securities lending & borrowing

ISO_20022_LV_v64


Looking at the advantages iso 20022 brings over iso 15022

Looking at the advantages ISO 20022 brings over ISO 15022

ISO 20022:

  • Builds on the ISO 15022 data dictionary concept and registration infrastructure, but strengthens the monitoring by the industry

  • Uses a more robust, syntax independent development methodology based on UML modelling of business processes and transactions

  • Uses XML as the syntax for the actual physical messages

  • Has a wider scope than ISO 15022, which is only for securities messages

  • Is in line with directions taken by other industries (UN/CEFACT)

Syntax independent business modelling

is key to the ISO 20022 standard !

ISO_20022_LV_v64


Iso 20022 the fx seg 1 3

ISO 20022 – The FX SEG (1/3)

  • Members – 29 experts

    • 13 countries: AU, CA, CH, DE, FI, FR, GB, NL, NO, RU, TR, US, ZA

    • 4 liaison organisations: FISD, FPL, ISITC, SWIFT

  • Convener: Ludy Limburg, ABN Amro(NL); Vice-convener: Tony Smith, JP Morgan Chase (UK); Secretary: vacant

  • Kick-off meeting: in September 2006

  • Approved: Forex notifications (CLS)

ISO_20022_LV_v64


Iso 20022 the fx seg 2 3

ISO 20022 – The FX SEG (2/3)

Covering instruments such as:

Foreign eXchange

Spot

Trading portals, matching services providers

Covering actors such as:

Swaps

Hedge funds

Investment managers

Forward

Custodians

Currency Options

Dealers

Application providers

CLS and CLS settlement members

Industry associations (ISDA)

Money brokers

ISO_20022_LV_v64


Iso 20022 the fx seg 3 3

ISO 20022 – The FX SEG (3/3)

Including business areas such as:

Trade:

order, execution, allocation, affirmation, etc.

Pre-trade:

IOI, quotes, etc.

Post-trade:

confirmation, matching, assignment, novation, etc.

Foreign eXchange

Notification of trades to third parties

Clearing and Settlement, including netting and related reporting

Trigger events, option exercises

ISO_20022_LV_v64


Iso 20022 the trade services seg 1 3

ISO 20022 The Trade Services SEG (1/3)

  • Members – 29 experts

    • 14 countries: AU, CA, CH, DE, DK, FI, FR, GB, IS, IT, JP, NL, US, ZA

    • 2 liaison organisations: ISITC, SWIFT

  • Convener: Tapani Turunen, Tieto (FI) Vice-convener:Peter Potgieser, ABN Amro (NL); Secretary: Jim Wills, SWIFT

  • Kick-off meeting: in September 2006

  • Approved: Invoice Financing Request (CBI Consortium), Trade Services Management (SWIFT)

  • Under evaluation: Financial Invoice (UN/CEFACT TBG5)

ISO_20022_LV_v64


Iso 20022 the trade services seg 2 3

ISO 20022 The Trade Services SEG (2/3)

Covering products…

Trade Services

Collection

…and services such as:

Reconciliation

(A/R, A/P), remittance data

Documentary credit

Open Account Trading

Letter of credit

e-Invoicing

EBPP

Guarantee

Purchase order, transport documents

Invoice financing

ISO_20022_LV_v64


Iso 20022 the trade services seg 3 3

ISO 20022 The Trade Services SEG (3/3)

Including actors such as:

Financial Institutions

Private and corporate customers (treasurers)

Associations providing rules and master agreements (eg IFSA, ICC)

Trade Services

Risk management entities

Trade facilitators: chambers of commerce, insurance co, freight forwarders, carriers, customs, factoring co

Application providers

ISO_20022_LV_v64


Iso 20022 the cards related retail financial services seg 1 3

ISO 20022 – The Cards & Related Retail Financial Services SEG (1/3)

  • Members – 30 experts

    • 14 countries: AT, AU, CH, DE, FI, FR, GB, JP, KR, NL, RU, SE, US, ZA

    • 4 liaison organisations: IFX, Mastercard, SWIFT, VISA

  • Convener: Chris Starr, APACS (GB); Vice-convener: William Vanobberghen, Groupement des Cartes Bancaires (FR); Secretary: Reinhard Herwig, SRC (DE)

  • Kick-off meeting: on 23-24 October 2008

  • Under evaluation: Card payments exchanges (EPASOrg)

  • Next: Acquirer to Issuer Card Messages (TC68/SC7/WG9), ATM interface for transaction processing and ATM management (IFX Forum)

ISO_20022_LV_v64


Iso 20022 the cards related retail financial services seg 2 3

ISO 20022 – The Cards & Related Retail Financial Services SEG (2/3)

Covering instruments…

Cards and Retail

Debit card

Charge and credit card

…and actors such as:

Acceptor (merchant, retailer)

Card holder

Prepaid card

Card issuer

Hard- and Software providers

Card scheme

Acquirer

Intermediary agent

ISO_20022_LV_v64


Iso 20022 the cards related retail financial services seg 3 3

ISO 20022 – The Cards & Related Retail Financial Services SEG (3/3)

Including business areas such as:

Transactions between merchants and acquirers, and cardholders and issuers that support authorization, clearing, reversal, chargeback, dispute processing, etc.

Transactions between acquirers and card issuers

Similar messages transacted on internet or from mobiles or other personal devices

ATM processes such as authorization, processing, ATM management and inventory

POI messages for payments, administrative and device related services

ISO_20022_LV_v64


Iso 20022 technical support group

ISO 20022 – Technical Support Group

  • Members – 29 experts

    • 11 countries: BR, CN, FI, FR, GB, JP, KR, NL, RU, US, ZA

    • 5 liaison organisations: Euroclear, FPL, Mastercard, SWIFT, VISA

  • Convener: Derek Lasalle, JP Morgan Chase (US); Vice-convener: Paul Hojka, APACS (GB); Secretary: Kris Ketels, SWIFT

  • Kick-off meeting: on 23-24 October 2008

  • Mission: help RMG, RA, SEGs and Submitting Organisations with technical matters

ISO_20022_LV_v64


Continuing with today s agenda

Cross-industry harmonisation

Continuing with today’s agenda…

ISO 20022

ISO_20022_LV_v64


Harmonising across all industries with un cefact

Harmonising across all industries with UN/CEFACT

United Nations/CEFACT –

Centre for trade facilitation and e-business

  • Created in 1997 to improve world-wide co-ordination of trade facilitation across all industries

  • Focusing on international standards for electronic transactions (e.g., ebXML venture with OASIS)

  • Promoting technology neutral business modelling and a central library of core components

Goal is to establish interoperability between ISO 20022 and UN/CEFACT repositories

ISO_20022_LV_v64


Harmonisation between iso and un cefact

Harmonisation between ISO and UN/CEFACT

  • 2004: TC68, TBG5 and SWIFT sign a MoU to investigate harmonisation

  • 2005: Trial submission from ISO 20022 to UN/CEFACT

  • 2006: ISO TC68/WG4 takes over technological alignment

  • 2007: Official submission from ISO 20022 to UN/CEFACT

  • 2008: Customer-to-bank payment components harmonised and accepted in UN/CEFACT core component library

  • 2009: The cooperation is placed under the umbrella of the ‘MoU on e-Business’

  • 2010: Official submission of a financial invoice message from UN/CEFACT to ISO 20022

ISO_20022_LV_v64


Introduction to iso 20022 universal financial industry message scheme

A single ISO-UN/CEFACT approach

ISO 20022

Registration

Management Group

ISO 20022 users

ISO 20022

Registration

Authority

ISO 20022 Standards Evaluation Groups

IFX

UN / CEFACT

(all industries)

TBG5

UN/CEFACT

Registry/Repository

Securities

ISO 20022 Financial Repository

CLS

TBG5

Finance

and

TBG17

Harmo-

nisation

Payments

Business models

Core Component

Library

Data Dictionary

SWIFT

Trade services

Candidate ISO 20022 messages

Euroclear

Forex

Common Business Processes

Business Process Catalogue

EPASOrg

Cards

www.iso20022.org

ISO_20022_LV_v64


Continuing with today s agenda1

Interoperability within

the financial industry

Continuing with today’s agenda

ISO 20022

ISO_20022_LV_v64


Introduction to iso 20022 universal financial industry message scheme

Date

Account

Order

All institutions have their own sets of data objects

Order

Date

…and groups them into ‘syntax-neutral’ message models, which...

Date

Using ISO 20022 modelling to reach interoperability

ISO standardizes common data objects…

… can be ‘transformed’ in message formats in the desired syntax

ISO 20022

ASN.1

FpML

FIX

ISO_20022_LV_v64


Iso 20022 compliance at model level

ISO 20022 compliance at model level

Repository

ISO 20022 Dictionary

Dictionary

Catalogue

Payments clearing

& settlement

ISO 20022 message models

Card payments

physical message representation

ASN.1 syntax

ISO 20022 XML syntax

ISO_20022_LV_v64


Iso 20022 compliance at model level1

ISO 20022 compliance at model level

Repository

ISO 20022 compliant

ISO 20022 Dictionary

Dictionary

Catalogue

Payments clearing

& settlement

ISO 20022 message models

Card payments

physical message representation

ASN.1 syntax

ISO 20022 syntax

ISO 20022 compliant

‘using a domain specific syntax’

ISO 20022 compliant

ISO_20022_LV_v64


Investment roadmap for iso fix xbrl and fpml syntaxes

“Investment Roadmap” for ISO, FIX, XBRL and FpML syntaxes

The Investment Roadmap is maintained by the Standards Coordination Group including the following organisations:

Download the Investment Roadmap and related FAQ

ISO_20022_LV_v64


Interoperability in the customer to bank payment domain

Interoperability in the customer-to-bank payment domain

Bank A

IFX format

Proprietary format

Bank B

Customer A

SWIFT

MT 101

Bank C

Let us look at a concrete example from payments area:

a customer may need to adapt to the format of the banks…

ISO_20022_LV_v64


Interoperability in the customer to bank payment domain1

Customer A

Customer B

Customer C

Interoperability in the customer-to-bank payment domain

IFX format

Proprietary format

Bank A

SWIFT

MT 101

…or banks may need to accept many formats…

ISO_20022_LV_v64


Introduction to iso 20022 universal financial industry message scheme

Interoperability in the customer-to-bank payment domain

Proprietary

OAGi

TWIST

ISO 20022

Core Payment

Kernel model

SWIFT MT

IFX

The reverse engineering produces a canonical ISO 20022 message model

ISO_20022_LV_v64


Interoperability in the customer to bank payment domain2

Interoperability in the customer-to-bank payment domain

IFX

Core

Payment

Kernel

MT 101

MT 101

ISO 20022

Core

Payment

Kernel

IFX

Adopting ISO 20022 facilitates convergence and co-existence

ISO_20022_LV_v64


Introduction to iso 20022 universal financial industry message scheme

www.iso20022.org

uestions

&

Answers

[email protected]

ISO_20022_LV_v64


  • Login