NACHA Payments 2016 Annual Conference Driven by regulation, globalization and innovation, the acceptance of ISO 20022 is gaining traction across the globe. Where is the U.S. in ISO 20022 adoption and what are the implications for providers and participants? What are the major considerations? Hear from a panel of global experts as they discuss migration approaches, lessons learned at different stages of adoption, and strategies to avoid disruptive forces for effective ISO 20022 implementation.

1. Around the World in ISO 20022

2. Getting To Know Us
22
Mark Brule
Director,
Project Portfolio Delivery
Nasreen Quibria
Managing Director &
Founder
Frank Van Driessche Sr.
Business Manager,
Market Infrastructures

3. Today’s Discussion…
33

4. http://www.qinsights.net 4
What is ISO 20022?
A standard for standards – a “recipe” or a
standardized approach to building
message standards across financial
services

5. http://www.qinsights.net 5
What is ISO 20022?

6. http://www.qinsights.net 6
CGI-MP for Corporate-to-Bank Communications
Source: SWIFT / CGI-MP
In total 45 FI members (Contributing & Observers) In total 88 Non-FI members (Contributing & Observers)
….And Growing!

7. http://www.qinsights.net 7
Where is the U.S. in the Adoption Curve?
?
Time of
Adoption
Adoption
Stage
Innovators
Early Adopters
Early Majority
Late Majority
Laggards
Low
High
Early
Late
© 2015 Q INSIGHTS

8. http://www.qinsights.net 8
Very familiar
Not very
familiar
Somewhat
familiar
Not at all
familiar
Source: 2012 Remittance Coalition Study
Source: 2013 U.S. Stakeholder Group - The Federal Reserve Bank of NY, The
Clearing House, NACHA, X9 - ISO 20022 Business Case Study
Key Observations in the U.S. Market
Then…
› Lack of awareness
› Demand driven by global banks and corporations
› No compelling financial business case, but potential
strategic reasons to consider adoption
Phase Recommendation
1. Planning &
Education
Promote educational efforts and develop
a national strategy for adoption
2. Cross-Border
Payments
Enable cross-border wire payments,
followed by cross-border ACH payment
3. Domestic
Payments
Assess value proposition and timing for
adoption for domestic wire and ACH
payments
Additional
Consideration
Consider as the standard messaging
format for new products and service
NACHA Launches XML-ACH
Remittance Opt-In Program
Herndon, VA., 2013
What’s Happening In The U.S.?
© 2015 Q INSIGHTS

9. http://www.qinsights.net 9
NACHA Unveils Handy ISO 20022 Mapping Guide
Herndon, Va., April 20, 2015 – NACHA unveiled their ISO 20022 Mapping Guide to assist financial institutions in
translating ISO 20022 payment instructions for their corporate customers into ACH payments.
› The ISO Stakeholder Group will proceed on the
following workstreams:
– Wires: Federal Reserve Banks (Wholesale
Product Office), TCH (CHIPS and X9
– ACH: Federal Reserve Banks (Retail Payments
Office), TCH (EPN), NACHA and X9 Strategy #4 – Achieve greater end-to-end
efficiency for domestic and cross border payments
(2015 and beyond)
ISO 20022 Activities In The U.S. …And now
to Undertake a Multi-Year Effort to Design and Develop a
Secure, Real-Time Payment System
New York, NY – October 22, 2014 –The Clearing House and its member banks today announced plans to undertake a multi-
year effort to build a real-time payment system to better meet consumers’ and businesses’ expectations in an increasingly
digital economy. The real-time payment system will be designed to address gaps in payment processing and will enable
consumers and businesses to securely send and receive immediate payments directly from their accounts at financial
institutions. © 2015 Q INSIGHTS

10. Today’s Discussion…
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11. Slide 11
FIF Financial Institution File
CSN CPA Services Network
CCIN Corporate Creditor
Identification Number
ACSS Total Volume (2015)
ACSS Total Value (2015)
LVTS Total Volume (2015)
LVTS Total Value (2015)
T+1 deferred net
settlement (DNS)
through accounts held
at the central bank
Fully collateralized same
day system with
guaranteed finality
(equivalent to RTGS)
Secure network for the
bilateral exchange of
direct credits & debits
and LVTS administration
ACSS
LVTS
CSN
Canadian
Payments
Association
USBE
(US Bulk
Exchange)

13. Richer Data
Automate
Simplify

14. Building the framework
• Messages
• Policy
• Rules
• Adoption

15. • Domestic and international industry partners
• Financial institutions
• Stakeholders
• Government

16. Unstructured
• One repetition,
140 characters
• Business to Consumer
payments
Structured
• 100,000 repetitions
• Business to Business
payments
Related
• One repetition
• Remittance related to
the payment

17. Slide 17

18. Slide 18
ISO 20022
A foundational element of modernization
April 2016

19. Today’s Discussion…
1919

20. 200+ initiatives
Under discussion > planned > rollout > live
90 countries
Europe
APAC
Americas
Middle East & Africa
Payments
Securities
Trade
Forex
Cards
Global ISO 20022 adoption

21. Renewal of aging legacy systems and standards
Spill-over of initiatives part of the PMI ecosystem (peer pressure)
• Domestically - ACH, RT-RPS or SMI
• Regionally/in neighbouring countries
Oversight pressure
• To modernise the payments industry
• For global interoperability, in support of international expansion or increased
competition
• For increased transparancy with payments
Efficiency gains and risk reduction through use of common standards and
harmonised market practices
Client request for better straight through processing and
automated reconciliation through structured (remittance) information
Adoption drivers with payment market infrastructures

22. Efficient
community
management
Resilient
messaging
platform
Standards
expertise
Unequalled contribution
to ISO 20022
SWIFT – trusted partner for your ISO 20022 initiatives
Trusted consulting
partners for more
ISO 20022 initiatives
globally than anyone else
Only worldwide value-added network
designed specifically for ISO 20022
Highest standards of reliability,
availability and security
Selected as platform provider
for key ISO 20022 initiatives
in payments and securities
Forty years of community expertise Unique tools and established
processes to support communities
for
ISO 20022
What it means for SWIFT

23. Less variation,
more global
market practice
1
Provide a
predictable
environment
(versions, release
mgmt..)
2
3 Best practice sharing for
community adoption &
implementation
Towards a harmonised use of ISO 20022
SWIFT’s community management

24. ISO 20022 messages, versions and market practice
Publish standards information
in a consistent format on MyStandards
[messages/versions used, release timeline, market practice]
Best practices
for version
management
Adherence
Information
sharing
Publication
Global
market
practice
ISO 20022 Harmonisation Charter
MIs coordinating a harmonised roll-out

25. ISO
20022
messages
Global
market
practice
Local
market
practice
Bank-
specific
practice
PACS - pacs.008.001.05
FI to FI Customer Credit Transfer
PMPG HVP like-for-like or HVP+
guidelines
CPA implementation
guidelines
Adherence to global market practice
An example
Bank’s internal specification in
line with CPA guidelines
SWIFT
• ISO 20022 message part of
pre-configured template
• global market practice validated on
SWIFTNet
• further community specific customisation
• further bank specific customisation
Information
sharing
Adherence

26. FIN today
Strict annual
maintenance cycle
• Well established
SWIFT process
• Enforced through
network validation
• Required for STP
in many-to-many
space
ISO 20022 in the future
Annual
maintenance cycle
• Aligned with SWIFT release
• Version management in
collaboration with MI user
community
− Max 2 versions co-exist
− Recommended use of
latest version for new
projects
ISO 20022 so far
Flexible
maintenance cycle
• Managed by ISO
• Release not linked to
SWIFT
• Emerged in many-to-
one space, driven by
MIs
Costly
fragmentation
Consistency
Planning
Budget
Consistency
Planning
Budget
Adherence to versions and releases
A more disciplined environment
Information
sharing
Adherence

27. • JASDEC
• DTCC
• EBA
• ECB
• Euroclear
• Hong Kong Interbank Clearing
• Deutsche Bundesbank
• National Bank of
Belgium
• NSD Russia
• Reserve Bank of
South Africa
• SADC
• SGX
• The Clearing House
• US Federal Reserve
• VP Securities
• APCA
• ASX
• Banca d’Italia
• Bank of Canada
• Bank of England
• Canadian Payments
Association
• Clearstream
• CLS
• Colombia ACH
ISO 20022 Harmonisation Charter
Stakeholders involved

28. Today’s Discussion…
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29. 29
Thank You – Questions? …Let’s Connect
(m) 617.388.6207
nasreen.quibria@qinsights.net
nasreenquibria
@nquibria
(o) 613.691.4416
mbrule@cdnpay.ca
Frank Van Driessche |Sr. Business
Manager, Market Infrastructures
(o) 212.455.1842
Frank.VANDRIESSCHE@swift.com
Nasreen Quibria| Managing Director
& Founder
Mark Brule| Director,
Project Portfolio Delivery

30. http://www.qinsights.net
• ISO: http://www.iso20022.org/
• SWIFT: http://www.swift.com/products_services/by_type/standards/standards_what_s_new?rdct=t
• CGI – Market Practice: http://corporates.swift.com/en/cgi-mission-and-scope
• NACHA: https://www.nacha.org/ISOresources
• Federal Reserve Banks:
https://fedpaymentsimprovement.org/get-involved/iso-20022/
• Canadian Payments Association (CPA):
https://www.cdnpay.ca/imis15/eng/Our_Initiatives/eng/initiatives/ISO_20022.aspx
• European Payments Council (EPC): http://www.europeanpaymentscouncil.eu/index.cfm/sepa-credit-
transfer/iso-20022-message-standards/
• IFX: http://www.ifxforum.org/home/
• Payments UK: http://www.paymentsuk.org.uk/policy/payment-industry-standards/iso20022
Appendix – Resources