by Helen Sanders, Editor
XML ISO 20022 and the benefits
The ISO 20022 standard provides the financial industry with a common platform for the development of messages using standardised XML syntax. Currently, corporates that operate internationally typically have multiple formats for exchanging data with their banks. This means that interfaces are cumbersome to maintain (even if using a single channel such as SWIFT, as banks require/provide data in different ways). Automated processes such as reconciliation are impeded as rules cannot be applied consistently and banks provide and require different levels of detail.
By standardising the way that data is exchanged between banks, between banks and corporates, and between corporates’ own internal systems, integration of systems and processes is far easier, and greater automation can be achieved. It also prevents companies becoming too reliant on an individual bank if their data and processes become entrenched.
SEPA payment products are based on ISO 20022 so by the migration deadline, all corporations in Europe will be using ISO 20022 for at least some of their payments; however, the standard has far wider applicability and can be used as a standard for payments globally.