They will also offer an additional channel for reporting she says.
What Is 20022 Full Effect InISO 20022 is set to come into full effect in November 2025, across banks, clearing infrastructures and intermediaries.While the adoption of ISO 20022 for cross-border payments is set to create a common standard for payment data across the globe, implementation is likely to have differing implications for corporates and financial institutions alike.According to Shirish Wadivkar, Global Head, Correspondent Banking Products, there will be costs associated with the implementation of ISO 20022, but the benefits are wide ranging and if banks were to limit the project to just minimum standards of compliance, they will remain oblivious to the potential that ISO 20022 has to truly transform the payment experience for all participants in the payment ecosystem.We will miss this opportunity if we classify ISO 20022 as just a bank-to-bank, correspondent banking project, he says. Under the current system manual intervention and regulatory reviews adds to the cost of the payments, and detracts from the speed and efficiency, that we can truly offer our clients. The adoption of ISO 20022 will expand on what is missed in the existing MT messages. Currently, SWIFT estimates that 10 of payments over the SWIFT network require manual intervention. Many large market infrastructures (like the local RTGS and immediate payment networks) across the world are moving towards ISO 20022 in lockstep of the SWIFT migration to ISO 20022 by 2025. When banks, clients and market infrastructures transact using ISO 20022, the data standardisation and uniformity throughout the banking ecosystem, creates a transformative impact for all, says Wadivkar. These are the new rails for commerce to move faster, better and stronger. Why ISO 20022 and why now Indeed, the overarching benefits of implementing ISO 20022 are compelling when compared to the fragmented systems currently being used. Collecting money is easy but reconciling it is much harder says Ankur Kanwar, Regional Head of Cash Management Products, Singapore ASEAN. ISO 20022 will address this issue according to Saqib Sheikh, Global Head of the SWIFT ISO 20022 Programme. Corporates want a single, rich data standard and a uniform experience across banks that they deal with and ISO 20022 facilitates just that, at a minimum. SWIFT has spent the past three years working with industry working groups to ensure that the ISO 20022 cross-border payments market practice will address current limitation. This means improvements not only to reconciliation, but also to visibility and tracking, automation, efficiency and of course, improvements to data capture. Clients are demanding more structured data, quality data, something that is meaningful for them, says Sheikh. And it is not just clients who are set to benefit from ISO 20022, regulators globally also want more data about transactions occurring in their jurisdictions, to facilitate visibility of the nature of payments. ISO 20022 allows for more data with which to uniquely identify parties in the payment chain, adds Sheikh. As global transactions continue to increase, the need for more structured and richer standards has become more pressing, particularly as domestic payment systems in many jurisdictions have moved or have active plans to adopt ISO 20022 in the next couple of years. Enriched and harmonised data is also key to automation says Marion Reuter, Regional Head of Transaction Banking Sales, Europe and Head of Transaction Banking, Germany and Nordics. And while a move towards ISO 20022 standard was the first step in that evolution to automation, a new element has emerged offering even more efficiency and standardisation in the payment ecosystem: Application Programming Interface also known as API. Corporates and Financial Institutions are keen to make the flow of information more real time, and APIs can facilitate this says Reuter.
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