Sibos 2024: Future-proofing data and the promise of ISO 20022
Future-proofing data took centre stage on day three of Sibos 2024, which is currently unfolding this week in Beijing, China, when payment experts took to the stage to discuss the industry’s ongoing transition to ISO 20022.
Sibos’ Big Issue Debate this year focused on ISO 20022
The Big Issue Debate, a highlight of Wednesday’s agenda, brought together panellists from Crédit Agricole CIB, Deutsche Bank, Standard Chartered Bank and the ICC Digital Standards Initiative, with Peter Harmston of KPMG serving as moderator.
As ISO 20022 gives rise to more frictionless operational and compliance processes in payments, the debate sought to determine how providers could best position themselves to reap the biggest benefit of an industry in transition.
Adoption and adaptation
In his opening statement, Harmston asked whether the industry’s pursuit of the international messaging standard, first introduced in 2004, would result in a truly enhanced experience for both banks and the customers they serve.
Responding to this, Tsvetanka Nankova, Deutsche Bank’s global head of sales, institutional cash and trade finance, emphasised how the Frankfurt-based bank is “definitely seeing certain benefits with going live with ISO”.
She highlighted several key benefits, including improved straight-through processing speed, quicker payment transactions, and a “significant reduction” in false positive hits during sanctions screening.
Providing insight into Standard Chartered’s ISO 20022 journey, Michael Spiegel, the bank’s global head of transaction banking, said the benefits “will be there”, but that “they’re not quite there yet”.
Spiegel expressed the importance of cross-organisational collaboration in accelerating the standard’s global adoption, adding that he believes there’ll be “a much wider application once we’re there”.
Panellist Etienne Bernard, global head of cash management and regional head of Europe at Crédit Agricole CIB, suggested much of the unrealised potential of ISO 20022 can be unlocked through operating models.
He explained how the standard’s promotion of structured data models can perpetuate the benefits already outlined by the panel, including stronger fraud defences and faster settlement times, through the smoother running of operating systems internally.
This efficiency, he added, will in turn lend itself to reduced operating costs, a linkage he currently sees as a “virtual circle” across the industry “if we do it right”.
The European Central Bank (ECB) has mandated a migration deadline for banks operating in the European payments area of November 2025, with data presented by Nankova suggesting that only 27% of banks have met this requirement.
Bernard cited the rate of adoption as a “key point” of the success of ISO 20022, viewing this adoption figure as “far too low” and urging the industry to “pick up” its efforts.
The digitisation of trade finance
In relation to the panel’s agreement on the broad application of the standard beyond the payments sector, Pamela Mar, managing director of the ICC Digital Standards Initiative, elaborated on the benefits it would serve other banking functions, namely trade finance.
“The biggest problem is the lack of harmonisation of trade standards,” she remarked, adding that adoption can be hindered even when clarity exists. “Sometimes their buyer doesn’t want to, sometimes they’re just not able to,” she explained.
Noting the need for solutions able to ensure interoperability, she stated that the benefits of digitising trade lie primarily within “data aggregation at scale and the insights it can provide”.
According to Mar, without the means to connect fragmented data points, many of these advantages would go unrealised, and that ultimately, the decision to digitise can be framed as a pragmatic calculation: “Can I save labour, time or money by digitising this specific process?”
To facilitate this, she outlined the ICC’s focus on ISO 20022, AI plugins and optical character recognition (OCR) technology to connect corporate back-end systems and public domain exchanges.
“The finance aspect is actually far ahead from a digitalisation perspective,” she says, pointing to a broader hesitance in the trade sector.
She concluded her remarks by asserting that demonstrating the security and transparency of digital finance could inspire a new level of confidence across the supply chain.
“If we can show that digital is safer,” she comments, “it’s not only about saving money and labour but also ensuring greater security for everyone involved.”
As Sibos 2024 progresses throughout this week, the conversation around ISO 20022 and its potential for all functions relied upon in banking continues to resonate, setting the stage for a more interconnected and efficient future in global finance and trade.
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