ISO 20022: The secret language of value in banking

Here in Belgium, we have three official languages, French, German, and Dutch, but most of our residents speak several more. In years of travelling, I have come to understand that it takes much more than vocabulary to effectively convey a message. Intonation can change the meaning of what we say. Hand gestures or body language can add another dimension to our words.

In business, having a standard such as ISO 20022, that allows different players to speak the same language, isn’t always enough to fully understand each other. With the adoption of ISO 20022, all players in the banking ecosystem have a huge opportunity to start understanding each other in a much more profound way.

The result will be greater efficiency, enhanced automation, better prevention of financial crimes and the potential to provide value-added services.

It’s not about “more data”, it’s about better use of data

The market refers to ISO 20022 as “enriched messaging” and “richer data that opens a world of possibilities for all players in the ecosystem.” However, it’s not the data itself that will bring the richness; it’s how data will be used, and how banks take advantage of this additional information. Although data is at the heart, it’s all about banks grasping the opportunity for in-depth transformation and designing their operating model to reap the true benefits of this new standard.

To leverage data for decision making, it must be informative. In other words, data must provide insights that improve the current understanding of a specific use case – so decisions can be made, reconsidered or confirmed in a well-founded manner. Banks should not only use data to significantly increase its efficiency, but also to empower their customers to make better decisions.

ISO 20022 and the ability to collect this enriched data (which provides more information) will lead to greater insight and allow banks to fuel their analytics for better services and increased efficiency. While banks today have internal financial data, connecting it to the ecosystem through this new enriched data standard will open a world of endless possibilities. Therefore, a data-driven operating model is mandatory for any direction the bank is willing to go to realize the opportunities that ISO 20022 will bring.

Why banks need to take a leap of faith

Financial institutions need to embrace a paradigm shift: believe and act accordingly. In banking terms: don’t settle for compliance and see what it will bring. Instead, create a roadmap for payment transformation with ISO 20022 as a catalyst and design your target operating model to unlock the true potential of ISO 20022. Doing so will allow you to evolve your business and technology readiness – enabling richer reporting, enhanced anti-financial crime, automated reconciliation, frictionless cross-border payments, renewed cash and treasury services to name a few. It lays the foundation for innovative new products and services in and around the payment transaction.

How can Atos help in this quest for knowledge?

While some may urge you to focus on executing tactical compliance initiatives, Atos believes that only an end-to-end approach can unlock the true value of ISO 20022.

At Atos, we don’t introduce ISO 20022 to clients simply to make their organizations compliant. We view it as an opportunity to realize the best possible outcomes of this new standard in terms of technology, processes, and people. Since ISO 20022 provides a rich set of metadata protocols that travel with each payment, leveraging AI and data analytics yields new business insights, enhances existing products and services, and helps develop new products or services to better meet client needs. Additionally, educating your payment departments with your transformed services will be of much better benefit, driving further success.

As financial institutions continue on the payment transformation journey, it’s critical to keep an eye on what’s coming next and design the target operating model accordingly. To unlock the real value of ISO 20022, you need to first explore your situation, create a plan, manage change effectively, and execute to gain the early mover advantage.

Interested to learn more?

Contact Eddy Claessens, our expert for Payments in Financial Services, or visit our website for more information: https://atos.net/en/lp/payments-transformation-iso-20022

Background: ISO 20022 has been developed as a uniform and universal standard payments protocol to counter the problem that the existing unstandardized and uncharacterized way of formatting exchanges of financial and payment messages between countries, customers and banks previously was. This enables global interoperability and improved customer experience by realizing end-to-end processing across domains and geographies. Financial institutions worldwide need to execute ISO 20022 latest by end of November 2022 within the EU, and by end of November 2023 for the US.

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