Benelux forum 2014 - ISO 20022
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Benelux forum 2014 - ISO 20022

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Presentation from the SWIFT Benelux Forum held in La Hulpe on 19/20 March 2014.

Presentation from the SWIFT Benelux Forum held in La Hulpe on 19/20 March 2014.

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Benelux forum 2014 - ISO 20022 Benelux forum 2014 - ISO 20022 Presentation Transcript

  • ISO 20022 for payments (and a bit more) Where are we at? Frank Versmessen Benelux Business Forum, La Hulpe, 19th March 2014
  • Agenda • ISO 20022: taking the world by storm? – Overall evolution – Impact on a global player – Impact on FIN • Implementation for HVPs – Standards – Platform – Migration enablers
  • Agenda • ISO 20022: taking the world by storm? – Overall evolution – Impact on a global player – Impact on FIN • Implementation for HVPs – Standards – Platform – Migration enablers
  • ISO 20022 seen as “convergence” standard Weeding out proprietary (domestic) standards at MI level [1 + m(any)] standards [1 + 1] standards Many market infrastructures adopt ISO 20022 in their renewal cycle Purple line = ISO 20022 4
  • Mulitlateral space: No adoption VS ‘Interest’ No adoption/migration requests, but some interest to lead Need for support in a coexistent world Need for new MX solutions (1) In the multilateral (cash, securities, fx) space, there is no ‘adoption/migration’ requested any time soon, as: • there are high levels of STP today • no business case to migrate/adopt • lack of business rules around usage of MX • MT business rules deeply ingrained in ‘old’ apps • too many other (more important) projects (2) And the advent of MX is creating new business opportunities; some institutions want to take advantage of the new features; also SEPA sets the example 5
  • Local custody role Global broker role Cash clearing roleCash correspon dent business FX Funds ISO 20022 impact A global player’s exposure Demand for ISO 20022 messages for individual payments Direct membership possibilities Move of HVP towards ISO 20022 Changing CSD services as a result of T2S Migration ending in 2015 6 YOU
  • EU EMEA (non-EU) – APAC - AME Corporate to Bank FIN traffic will move if SEPA transactions No major migration anticipated (slight SEPA impact) Bank to Bank FIN traffic will move if SEPA transactions No major migration anticipated Bank to ACH NA - Files NA - Files Bank to RTGS/HVP This FIN traffic will move as a result of T2 and EBA migrations No major migration anticipated Impact on FIN Mainly new projects Which FIN impact for Payments do we see? FIN/MT moving to ISO20022 (now – 2018) SMALL SMALL LARGE
  • EU EMEA (non-EU) – APAC - AME IM to Custodian No impact No impact Custodian to Custodian Potential move of traffic as a result of becoming Direct Member to T2S No major migration anticipated Broker to Custodian Potential move of traffic as a result of becoming Direct Member to T2S No major migration anticipated Broker/Custodian to CSD SEE ABOVE, and when domestic market is migrating (DK, FI, …) No major migration anticipated Impact on FIN Mainly new projects Which FIN impact for Securities do we see? FIN/MT moving to ISO20022 (now – 2018) SMALL ? SMALL ? LARGE ?
  • 2008 2013 2020 SEPA DTCC IPFA C2B … SADC/ JASDEC/ASX/ SGX/KDPW/ DK Paym/VP Sec /IN RTGS/ TSE/CLS/BNB 2014 T2S PASA BOJNet Funds … AU Payments T2 EBA … 2015- 2016 2017 CPA (Canadian Payments) … UK (Payments Roadmap) and CH payments will be added to the mApp US > Business case assessment ongoing ISO 20022 adoption mApp Timeline of initiatives 9
  • ISO 20022 adoption mApp adoption mApp ISO 20022 A free IOS tablet app, providing an overview of initiatives adopting ISO 20022 around the world > Information provided by initiative* owners > Covers all regions & business segments > Easy to use, contribute to and maintain Available in the App Store * Initiatives who plan to adopt the official ISO 20022 messages registered on www.ISO20022.org > 60 initiatives ISO 20022 adoption mApp Facilitating adoption and fostering dialogue 10
  • Contact anne.schroeder@swift.com or chantal.vanes@swift.com Documentation available on www.swift.com/standardsforum Public data available in pdf & ppt format for users without iPad Discover the 66 ISO 20022 initiatives Diversity across regions and business 11
  • Agenda • ISO 20022: taking the world by storm? – Overall evolution – Impact on a global player – Impact on FIN • Implementation for HVPs – Standards – Platform – Migration enablers
  • • Background – Agreement on how to use ISO 20022 for high value clearing payments • To protect global players and global interoperability as markets move at different speeds • In scope: credit transfers, FI direct debits and some reporting messages • In cooperation with the Payments Market Practice Group (PMPG) • Status – Payments ecosystem analysis – gaps fixed – Implementation guidelines – finalised • Like-for-like approach i.e. reducing richer ISO 20022 to MT functionality • Some minor outstanding questions • Used as a basis also by other jurisdictions – Mapping tables– being finalised • What’s next? – Establish maintenance process for implementation guidelines Setting global implementation guidelines Standards
  • Payments ecosystem gap analysis Standards MT Name ISO 20022 Name Payments Initiation MT 101 Request for Transfer pain.001 Customer Credit Transfer Initiation MT 104 Request for Direct Debit pain.008 Customer Direct Debit Initiation MT 207 Request for Financial Institution Transfer pain.001 Covered by Customer Credit Transfer Initiation Payments Clearing & Settlement MT 102 (+) Multiple Customer Credit Transfer pacs.008 FI To FI Customer Credit Transfer MT 102 REJT Multiple Customer Credit Transfer - Reject pacs.002 FI To FI Payment Status Report MT 102 RETN Multiple Customer Credit Transfer - Return pacs.004 Payment Return MT 103 (+) Single Customer Credit Transfer pacs.008 FI To FI Customer Credit Transfer MT 103 REJT Single Customer Credit Transfer - Reject pacs.002 FI To FI Payment Status Report MT 103 RETN Single Customer Credit Transfer - Return pacs.004 Payment Return MT 104 Direct Debit pacs.003 FI To FI Customer Direct Debit MT 107 General Direct Debit pacs.003 FI To FI Customer Direct Debit MT 200 Financial Institution Transfer for its Own Account pacs.009 Financial Institution Credit Transfer MT 201 Multiple Financial Institution Transfer for its Own Account pacs.009 Financial Institution Credit Transfer MT 202 (COV) General Financial Institution Transfer pacs.009 Financial Institution Credit Transfer MT 203 Multiple General Financial Institution Transfer pacs.009 Financial Institution Credit Transfer MT 204 Financial Markets Direct Debit Message pacs.010 Financial Institution Direct Debit MT 205 (COV) Financial Institution Transfer Execution pacs.009 Financial Institution Credit Transfer Cash management / reporting MT 210 Notice to Receive camt.057 Notification To Receive MT 900 Confirmation of Debit camt.054 Bank To Customer Debit Credit Notification MT 910 Confirmation of Credit camt.054 Bank To Customer Debit Credit Notification MT 920 Request Message camt.060 Account Reporting Request MT 940 Customer Statement Message camt.053 Bank To Customer Statement MT 941 Balance Report camt.052 Bank To Customer Account Report MT 942 Interim Transaction Report camt.052 Bank To Customer Account Report MT 950 Statement Message camt.053 Bank To Customer Statement MT n92 Request for Cancellation camt.056 FI To FI Payment Cancellation Request
  • • Stable draft of pacs.010.001.01 message available • Qualification by SWIFT IT  MX* • SWIFT to pursue ISO 20022 approval in due time • Submit business justification (BJ) now • Submit message for ISO 20022 approval later  ISO 20022** • Like-for-like (~ MT 204) implementation guideline available * Message ready for deployment across our MX based services ** After testing and live-implementation in 2017 FI direct debit gap fixed Standards
  • Implementation guidelines - MyStandards Standards
  • Participant B MT 103(+) 202(COV) 204 Participant A SWIFT Interface SWIFT Interface • Closed user group based • Message validation • PKI based security • Archival and retrieval • Copy services • Support MT MI Application Authorisation request MI Authorisation response MT 096 Payment Instruction Autorised/settled Payment Instruction Sender Notification MT 103(+) 202(COV) 204 (**) (**) with information for receiver MT 012 (***) (***) with information for sender MT 097 (*) (*) with information for sender/receiver Abort Notification MT 019 (***) SWIFT’s solution for T2 adopting ISO 20022 Platform – Today’s FIN Copy environment
  • Participant BParticipant A SWIFT Interface SWIFT Interface • Closed user group based • Message validation • PKI based security • Archival and retrieval • Copy services • Support ISO 20022 MI Application Authorisation request MI Authorisation response xsys.001 (*) Payment Instruction pacs.008 pacs.009 pacs.010 Autorised/settled Payment Instruction pacs 008/009/010 (copy) xsys.002 (***) Sender Notification (**) with information for receiver (***) with information for sender (****) out of scope migration phase 1 (*) with information for sender/receiver Abort Notification xsys.003 (***) SWIFT’s solution for T2 adopting ISO 20022 Platform – Future SWIFTNet Copy environment pacs.008 pacs.009 pacs.010 (**)
  • FIN IA S&F Security / integrity / reliability Service feature High quality of service (99.999 %) Service feature Support by R7 qualified interface Service feature Non-repudiation with trusted third party Service feature Selected for T2 Validation Service feature Selected for T2 Undelivered message report Service feature Selected for T2 Broadcast facility Optional Not supported Delivery notification Optional Message priority Optional Queue status report Optional Non-delivery warning Optional Session history report Optional Load balancing Optional SWIFT’s solution for T2 adopting ISO 20022 Messaging services
  • FIN IA S&F Y copy + fallback modes Service feature Information for use by sender or receiver Service feature Double authentication Service feature Reverse billing Service feature Individual online retrieval for 124 days Service feature (available 1Q 14 for MX) Urgent bulk retrieval for contingency 24 hours Cold start support (reconciliation) Service feature (available 1Q 14 for MX) Full/partial copy Service feature Full copy selected for T2 (partial copy will be available when required, e.g. for EBA EURO1) Copy destination selected by sender Not supported Service feature Copy destination BIC8 Level2 or level3 DN Subscription/addressing BIC8/BIC11 Level3 DN Liability framework FIN R&L SWIFTNet R&L (to be harmonised) RMA By-passed for copied messages Available if it adds value SWIFT’s solution for T2 adopting ISO 20022 Copy services
  • Interface/Integration SWIFT messaging platform equivalent features, common service description and harmonised liability framework for MT/MX How to shield users from migration impact Interoperability at the edge MT back-office Send / receive MTs to / from counterparties Send / receive MXs to / from counterparties Transformation MT to MX and vice versa Future route to T2
  • • User back offices can be shielded from the impact of migration through – Transformation of business payload Migration enablers
  • FIToFICustomerCreditTransfer … CreditTransferTransactionInformation PaymentIdentification InstructionID TransactionID End-to-EndID InterbankSettlementAmount InterbankSettlementDate InstructedAmount ChargeBearer IntermediaryAgent1 IntermediaryAgent1Account IntermediaryAgent2 IntermediaryAgent2Account IntermediaryAgent3 IntermediaryAgent3Account UltimateDebtor Debtor DebtorAccount CreditorAgent CreditorAgentAccount Creditor CreditorAccount UltimateCreditor InstructionForCreditorAgent InstructionfForNextAgent RegulatoryReporting RemittanceInformation Unstructured Structured Tag :20: :23B: :23E: :32A: :33B: :50a: :56a: :57a: :59a: :70: :71A: :72: :77B: Field Sender’s Reference Bank Operation Code Instruction Code Value Date/Currency/Interbank Settl. Amount Instructed Amount Ordering Customer Intermediary Institution Account With Institution Beneficiary Customer Remittance Information Details of Charges Sender to Receiver Information Regulatory Reporting K K JKK K K L L L K KK K K K L K K K K L L Seamless transformation payload Enabled by a like-for-like implementation
  • FIToFICustomerCreditTransfer … CreditTransferTransactionInformation PaymentIdentification InstructionID InterbankSettlementAmount InterbankSettlementDate InstructedAmount ChargeBearer IntermediaryAgent1 IntermediaryAgent1Account Debtor DebtorAccount CreditorAgent CreditorAgentAccount Creditor CreditorAccount InstructionForCreditorAgent InstructionfForNextAgent RegulatoryReporting RemittanceInformation Unstructured Structured Tag :20: :23B: :23E: :32A: :33B: :50a: :56a: :57a: :59a: :70: :71A: :72: :77B: Field Sender’s Reference Bank Operation Code Instruction Code Value Date/Currency/Interbank Settl. Amount Instructed Amount Ordering Customer Intermediary Institution Account With Institution Beneficiary Customer Remittance Information Details of Charges Sender to Receiver Information Regulatory Reporting Seamless transformation payload Enabled by a like-for-like implementation K K JKK K K K KK K K K K K K K
  • FIToFICustomerCreditTransfer … CreditTransferTransactionInformation PaymentIdentification InstructionID InterbankSettlementAmount InterbankSettlementDate InstructedAmount ChargeBearer IntermediaryAgent1 IntermediaryAgent1Account Debtor DebtorAccount CreditorAgent CreditorAgentAccount Creditor CreditorAccount InstructionForCreditorAgent InstructionfForNextAgent RegulatoryReporting RemittanceInformation Unstructured Structured Tag :20: :23B: :23E: :32A: :33B: :50a: :56a: :57a: :59a: :70: :71A: :72: :77B: Field Sender’s Reference Bank Operation Code Instruction Code Value Date/Currency/Interbank Settl. Amount Instructed Amount Ordering Customer Intermediary Institution Account With Institution Beneficiary Customer Remittance Information Details of Charges Sender to Receiver Information Regulatory Reporting Seamless transformation payload Enabled by a like-for-like implementation J J J JJ J J J J J J JJ J J J J
  • • User back offices can be shielded from the impact of migration through – Transformation of business payload – Transformation of business information, currently part of technical header Migration enablers
  • MT MX Sender BIC* BANKBEBBABC Requestor DN ou=abc,o=bankbebb,o=swift Receiver BIC* BANKDEFFXYZ Responder DN ou=xyz,o=bankdeff,o=swift Message type 202 Request type pacs.009.001.03 Priority U/N Priority Urgent/Normal Delivery notification 1/2/3** Delivery notification TRUE/FALSE Obsolescence period 003 (fixed 15 mins) Overdue warning delay 5 mins to 24 hours Field 103 FINCopy service code TGT Service name e.g. target.copy Copy indicator TRUE (copy forced by service set- up T2) Field 108 Message user reference Reference Request ref Reference Field 113 Banking priority (4 characters***) H_ _ _ (options H/U/N) Settlement priority H (options H/U/N) _Y_ _ (options Y/N) Authorisation notification indicator TRUE (options TRUE or FALSE) Field 119 Validation flag STP, COV Will be part of validation offering (see next slide) * For settlement purposes ** MT 010 Non-delivery warning, MT 011 Delivery notification or both sent in combination with chosen priority *** Mapping local usages of 3rd and 4th characters to be investigated More transformation business information Mapping (business) information in MT header
  • • SWIFT will perform central validation of constraints and cross- element rules of global ISO 20022 message standards* • SWIFT will validate compliance with globally agreed like-for-like implementation guidelines for use of ISO 20022 for HVPs • SWIFT will not validate community-specific implementations (in line with today’s services) * Network validated (or cross-element) rules are almost fully aligned between MT and ISO 20022. EU- inspired network validation in MTs will be incorporated as part of the like-for-like implementation of ISO 20022 Validation: what’s in, what’s not
  • • User back offices can be shielded from the impact of migration through – Transformation of business payload – Transformation of business information, currently part of technical header – Shielding from protocol changes • To be further assessed during Premium Services Forum, Amsterdam, and future sessions Migration enablers
  • • Standards • Change in syntax – not in business data or message flows • Implementation guidelines to be brought under well known SWIFT processes & release cycles • Platform • Equivalent network & messaging services • MX based SWIFTNet Copy solution matches MT based FIN Copy solution • Contractual • Pricing principles remain the same • R&L to be harmonised Summary TARGET2 from MT to MX… a technical migration