The Age of Open Banking

 Let us pivot for a moment from the back office of ISO20022 payment messages to the front office where the customer meets the bank.  Imagine your legacy bank has worked hard to modernize its payment systems and now carries rich data about a transaction end to end.What challenges do banks face? Several in fact. Sharing Customer Data: Who do I share this data with?  What is the risk to the bank, the customer? How is my API strategy shaping up?  Regulations are spotty at best and cant be depended to course correct us.Partner:...

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Cost and Value in Payments

 Today cross border payments have a reputation for high cost and lack of transparency in the fee structure.Coupled with a 600 year old system of Vostro/Nostro accounts and Correspondent banks as middlemen the system is opaque as best and takes 5-7 days for settlement to conclude.Where are these costs coming from? This graphic from Payments Canada will help.Can fintechs help reduce costs? See this graphic from RBC in one of their pilot studies...

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Value of digital transformation

 Customer onboarding at VisaCustomer onboarding at PlaidVisa paid $5.3 billion for Plaid. What does this tell us about the potential for digital transformation and embedded finance with ISO200...

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How to use data from ISO20022?

    The attraction of ISO20022 messaging data is: -It is unambiguous: the meaning of each data element is known -It is credible: the origin point of the data is known. -It is consistent: all ISO messages follow a standard that is universally understood.   These factors lend itself to data analytics at scale. Many banks have data lakes and initiatives to use AI/ML to develop insights. The building blocks are in place. What is payments data? Data generated by providing payment services such as card payments, mobile payments,...

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Brief on ISO20022 CAMT Reporting

    Under the ISO20022 payment messages for credit transfers, direct debits and electronic payments will all need to use the same standards, languages, procedure, and format to be compatible. The new format is called CAMT for Cash Management. CAMT ensures the customer a continuous XML process from submission through to the account statement with no disruption and specifically covers Bank to Customer Cash Management reporting The three most relevant CAMT formats for payment processes are listed below: camt.052 – Electronic...

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Case for ISO20022 migration

  Its not about a technical specification and the fact that a lot of data travels with the payment in ISO20022.In making a business case for migrating to ISO20022, its very hard to sell to executives why a change of this magnitude is desirable. I collected a couple of data points both for the bank and its customer to showcase why this migration is desirable.   For Bank: Banks have a very complex legacy architecture that has served them well for most part. However, the cost of servicing failed STP payment transactions is becoming prohibitive. In...

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ISO20222 and Straight through processing (STP)

The main benefit of ISO20022 rests on the fact that it will allow higher STP throughput. Let’s peel this onion a little bit. What we know: -The ISO 20022 standard defines a methodology for the development of financial message standards. - It relies on UML3 (Unified Modeling Language) models representing financial business processes, flows and transactions in a neutral notation. -These business transaction models are then subsequently converted into physical messages in the desired syntax, like XML (eXtensible Mark-up Language). - ISO 20022...

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