Today’s Guest Post by: Brian Phelps, Senior Solutions Consultant, Enterprise Content Management
Do you know what ISO 20022 is? If not, you should.
ISO 20022 is a set of archiving messaging standards set up for the financial sector and it will effect essentially every financial institution around the world. ISO 20022 is coming fast…are you prepared?
How it Works
In order to conduct business, financial institutions exchange vast amounts of data and information with their customers and among themselves. These exchanges work only if the sender and receiver of a message have a common understanding of how to interpret the information. That’s where ISO 20022 comes in; it defines the ‘language’ for information exchange between entities. Business transactions and messages that comply with ISO 20022 can be used among any industry participants (financial and others), independently of any specific communication network.
ISO 20022 will be felt around the globe because it is the agreed methodology used by the financial industry to create consistent message standards across all the business processes of the industry. The standards set in ISO 20022 are being used as the basis for national legislation and regional rules that financial institutions are being forced to adopt worldwide.
The first ISO 20022-related legislation of note (e.g., with teeth and penalties) is the Single Euro Payment Act (SEPA) which will govern all businesses that transact payments in Europe. According to the European Commission of Banking and Finance, the overall gains expected from SEPA for all stakeholders is $21.9 billion Euros (about USD $25 billion) per year! Underlying the bill is ISO 20022. But SEPA is just the first of many standards being set for financial and business institutions around the world. Indeed, there are 70-80 different permutations being developed and they are all based upon the ISO 20022 standard.
How Do You Know What You Don’t Know?
ISO 20022 brings profound benefits to the financial services industry, especially as it works to achieve end-to-end processing across domains and geographies that currently use vastly different standards and information formats.
In fact, IBM Content Manager OnDemand (CMOD) has a feature called, “XML Indexing,” where financial institutions can automatically batch index and archive XML transactional messages and statements into the CMOD repository. By storing ISO 20022 SEPA data in CMOD, financial institutions can meet multiple goals including:
- All data is securely retained to meet legal, compliance, and operational requirements
- Data can be reproduced for use by banking systems at any time
- Very high compression rates and a highly efficient architecture minimize storage costs and system footprints, keeping banking systems lean. This is critical since many financial institutions are experiencing a daily load of 10m – 100m messages with each message being 1k – 2k characters in length.
Want to learn more about ISO 20022 and how it might affect and benefit your organization? You can visit iso20022.org or download the Solution Brief called, “Managing the SEPA/ISO 20022 Archiving Challenge”.