How to prepare for migration to ISO 20022?

How to prepare for migration to ISO 20022?

How to prepare for migration to ISO 20022? 577 450 Quanteam

What are the challenges of ISO 20022?

  • Marc After several years of discussions, delays and piecemeal deployment, ISO20022 is set to become the global international standard for the transmission of electronic flows between market infrastructures, financial institutions and end-users. It will also provide the framework for a new, better-structured data format. For market infrastructures, the stakes are an improvement in large-value payments, such as RTGS, and even an improvement in major currencies, whether domestic or international; for cross-border payments, or cash payments, the improvement and optimization of anti-money laundering measures and applicable sanctions."

What are the expected benefits of this migration?

  • Marc In addition to unifying current payment standards, the benefits will be :
    • The ability for all banks, whatever the country, to work without technological barriers
    • Optimize processes
    • Optimize and improve exception tracking
    • Enhance payment efficiency".

How to prepare for migration to ISO 20022?

  • Marc First of all, there's no desire on the part of the institutions to have a single model. To get started, we obviously need to start with an adhoc transcoding procedure from MX to MT, and from MT to MX, either incoming or outgoing. The second possibility is to make a big bang and switch directly to the MX model. The solution recommended by the swift environment would be a hybrid model, allowing you to have both MT-managed subsets and MX-managed subsets. The last solution would be to transfer your activity to an external platform that would take care of all these issues, but you wouldn't necessarily be in control of your program.

What are the pitfalls to avoid when migrating to ISO 20022?

  • Marc : "From a global point of view, we underestimated the workload and didn't plan the associated teams for this project. In fact, it reminds me of a subject with one of my former customers during SEPA, where the entire chain had been planned, apart from the back office chain for incident processing. The change of format to XML resulted in a 20% increase in volumes and a 12% increase in costs. The team in charge of the back offices remained ISO and was unable to deal with the overall overload. This resulted in the departure of a major creditor customer from the marketplace for a year, who refused to supply new flows without certainty, and also in the setting up of a ten-strong task force team and dedicated management, leading to additional costs and, above all, anxiety.From an organizational point of view, underestimating the testing load with your partners.From a compliance point of view, not anticipating the risk of data loss or the risk of errors.

    From a
    technical point of view, being subjected to transcodifications and having your entire process slowed down, or even worse, having made technical decisions that would have to be changed in the middle of the game in order to comply with compliance requirements".

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