ISO 20022
Introduction to ISO 20022 –
Universal financial industry
message scheme
ISO_20022_LV_v118
Slide 1
Agenda

ISO 20022:
– Value proposition
– The standard
– The actors
– The registration process
– The Repository

ISO 20022 registration platform

Cross industry harmonisation

Interoperability within the financial industry

Q&A
ISO_20022_LV_v118
Slide 2
The ISO 20022 value proposition (1/5)
Objective
To enable communication interoperability
between financial institutions , their market
infrastructures and their end-user communities
Major obstacle
Numerous overlapping standardization initiatives
looking at XML financial messages:
MDDL, FIX, FinXML, VRXML, RIXML, XBRL, FpML, IFX, TWIST,
SWIFT, RosettaNet, EPC, OAGi, ACORD, CIDX, etc.
ISO_20022_LV_v118
Slide 3
The ISO 20022 value proposition (2/5)
Proposed solution
A single standardisation approach (methodology,
process, repository) to be used by all financial
standards initiatives
ISO 20022
ISO_20022_LV_v118
Slide 4
The ISO 20022 value proposition (3/5)
Convergence into ONE standard is the long term
objective…
… but in the interim several standards need to
coexist to enable quick response to competitive
pressures and regulatory demands
ISO_20022_LV_v118
Slide 5
The ISO 20022 value proposition (4/5)
Growth adds exponential complexity and expense…
EDIFACT
IFX
OAGi
TWIST
ISO_20022_LV_v118
RosettaNet
Without common building
blocks:
• Point-to-point connection
SWIFT
• Data is mapped directly from
one application to another
Proprietary • Costly, unscalable and
difficult to implement and
format
maintain
• Process, routing, rules logic
needs to be coded to specific
message types
42 interfaces = n * (n-1)
Source: John Mersberg, IBM Corporation
Slide 6
The ISO 20022 value proposition (5/5)
Standardized implementation reduces cost, time to effect
change and improves overall performance…
EDIFACT
IFX
OAGi
TWIST
Canonical
Message Model
(i.e. ISO 20022)
RosettaNet
Canonical message model =
• True process integration
SWIFT
• Reduced brittleness, faster to
respond to change
Proprietary • Shared message services –
format
single/shared parser, message
independent rules engine, etc.
• Unified monitoring / audit trail
14 interfaces = n * 2
ISO aims at long term convergence,
while facilitating short term coexistence…
ISO_20022_LV_v118
Slide 7
ISO 20022
Illustrating business modelling
All institutions have
their own sets of
data objects
ISO standardizes common
data objects…
…and groups them into ‘syntaxneutral’ message models, which...
… can be ‘transformed’ in
message formats in the
desired syntax
ASN.1
XML
ISO 15022
FIX
ISO_20022_LV_v118
Slide 8
The ISO 20022 recipe
Main ingredients (1/2):

Modelling-based standards development
– Syntax-independent business standard
– Validated by the industry

Syntax-specific design rules for XML and ASN.1
– Predictable and ‘automatable’
– Protect standard from technology evolution

Reverse engineering approach
– Protect industry investment and ease interoperability
– Prepare for future migration
ISO_20022_LV_v118
Slide 9
The ISO 20022 recipe
Main ingredients (2/2):

Development / registration process
– Clearly identified activities and roles
– Business experts and future users involved upfront
– Technical experts involved when required

Repository on the ISO 20022 website
– Business Process Catalogue & Data Dictionary
– Outside of official standard (maintained by registration
bodies)
www.iso20022.org
ISO_20022_LV_v118
Slide 10
The eight parts of ISO 20022
Part 1: Metamodel
Part 2: UML profile
Part 3: Modelling
Part 4: XML schema generation
Part 5: Reverse engineering
Part 6: Message transport characteristics
Part 7: Registration
Part 8: ASN.1 generation
Copies can be obtained from www.iso.org
ISO_20022_LV_v118
Slide 11
ISO 20022: The actors (1/2)
Submitting organisations
Communities of users or organisations that want to develop
ISO 20022 compliant messages to support their financial
transactions
Could be
ANBIMA
ASF
Berlin Group
BIAN
CBI Consortium
CFETS
China UnionPay
Clearstream
CLS
Danish Bankers Association
ISO_20022_LV_v118
EPC
Euroclear
FFI
FISD
FpML
IFX
ISITC
NBB
nexo A.I.S.B.L.
(formerly
EPASOrg)
FPL
OAGi
Omgeo
SC7/TG1
SWIFT
UN/CEFACT
TWIST
UK Payments Council
4CB
etc.
Slide 12
ISO 20022: The actors (2/2)




Registration Management Group, RMG
–
Overall governance, court of appeal
–
Approve business justifications for new standards
–
Create Standard Evaluation Groups (SEGs)
Standards Evaluation Groups, SEGs
–
Represent future users in specific financial areas
–
Validate candidate message standards
–
Approve change requests
Registration Authority, RA
–
Ensure compliance
–
Maintain and publish ISO 20022 Repository
Technical Support Group, TSG
–
Assist RMG, SEGs, RA and submitting organisations
ISO_20022_LV_v118
Slide 13
ISO 20022
The registration process (1/3)
R
M
G
m
o
n
i
t
o
r
s
Submitting
organisation
Financial industry group or standards body
Business
justification
Business justification
RMG
Submitting
organisation
& RA
SEG
RA
Submitting
organisation
& users
Project approval & allocation to a SEG
Development & provisional registration
Business validation
Official registration
and publication
Optional pilot testing
or first implementers
Repository
Dictionary
Catalogue
www.iso20022.org
ISO_20022_LV_v118
Slide 14
ISO 20022
The registration process (2/3)
R
M
G
m
o
n
i
t
o
r
s
Submitting
organisation
Financial industry group or standards body
Business
justification
Business justification
RMG
Submitting
organisation
& RA
SEG
RA
Submitting
organisation
& users
Project approval & allocation to a SEG
Candidate ISO 20022 messages
Development & provisional registration
Business validation
ISO 20022 messages
Official registration
and publication
Optional pilot testing
or first implementers
Repository
Dictionary
Catalogue
www.iso20022.org
ISO_20022_LV_v118
Slide 15
ISO 20022 registration process (3/3)
Yearly maintenance process
Timing
By June 1
By July 7
By August 21
By October 1
By December 1
By February 1
April-May
ISO_20022_LV_v118
Users CRs
SEG
Submitting
organisation
SEG
Submitting
organisation
& RA
SEG
RA
Submitting
organisation
& users
Users introduce Change Requests to the RA
SEG screens Change Requests (CRs)
Submitting organisation prepares ‘Maintenance
Change Request’ with each CR implementation
SEG approval/rejection
Development of new versions
Validation of new versions
Registration and publication
First implementers
Repository
Dictionary
Catalogue
Slide 16
ISO 20022 - The Financial Repository

Data Dictionary
– Business Concepts
– Message Concepts
– Data Types
 Business
Process Catalogue
– Financial business process models
– Financial business transactions, including messages
– XML or ASN.1 message schemas
www.iso20022.org
ISO_20022_LV_v118
Slide 17
Continuing with today’s agenda…
ISO 20022
ISO 20022 Registration Platform
ISO_20022_LV_v118
Slide 18
ISO 20022 - The Deployment

Approval of the international standard 

Selection of the Registration Authority 

Set-up of the www.iso20022.org 

Creation of Registration Management Group 

Creation of the first Standards Evaluation Groups 

Registration and publication of first ‘ISO 20022 messages’ 
Ongoing: promotion to developers (standardizers, industry bodies)
and users (vendors, end-users)
ISO_20022_LV_v118
Slide 19
ISO 20022
How does it fit into the ISO structure?
ISO Technical Committee TC68
Financial Services
SC2
SC4
SC7
Security
Securities
Banking
RMG members nominated by
P-member countries and Aliaison organisations
TSG & SEG members
nominated by all member
countries and liaison
organisations
ISO 20022
RMG
TSG
RA
SEG
Securities
SEG
Trade Services
SEG
Payments
SEG
FX
SEG
Cards
ISO_20022_LV_v118
Slide 20
ISO 20022
Registration Management Group (RMG)




–
–
Members - 62 senior managers from:
– 21 countries: AT, AU, BR, CA, CH, CN, DE, DK, FI, FR, GB,
IN, IT, JP, KR, NL, NO, SE, SG, US, ZA.
– 10 liaison organisations: Clearstream, ECB, EPC, Euroclear,
FPL, FpML, IFX, ISITC, SWIFT, VISA
Convener: James Whittle, Payments Council (GB); Viceconvener: Bob Blair, JPMorgan Chase (US); Secretary: Andre de
Roy, Payments Council (GB)
Meetings: twice a year
Key decisions:
Creation of five SEGs: Payments and Securities in 2005, Trade
Services and Forex in 2006, Cards & Related Retail Financial
Services in 2008
Approval of 50 development projects
ISO_20022_LV_v118
Slide 21
ISO 20022 – The Payments SEG (1/3)





Members – 63 experts
– 18 countries: AU, AT, BR, CA, CH, DE, DK, FI, FR, GB, IT, JP, KR,
NO, SE, SG, US, ZA
– 5 liaison organisations: ECB, Euroclear, IFX, ISITC, SWIFT
Convener: Susan Colles, BAML (US); Vice-convener: Bob Blair, JP
Morgan Chase (US); Secretary: Aurelie Steeno, SWIFT
Approved: C2B payment initiation (SWIFT/ISTH), Interbank credit
transfers and direct debits (SWIFT), Exceptions and investigations
(SWIFT), B2C advice & statement (ISTH/ISITC), Mandates (SWIFT) ,
Change/verify account identification (GUF), Bank account management
(SWIFT), Creditor payment activation request (CBI Consortium), Cash
account reporting request and notification (SWIFT), Bank Services
Billing (TWIST/SWIFT), Authorities Financial Investigations (FFI), Standalone remittance advice (IFX/OAGi)
Under evaluation: None
Next: Cash management (SWIFT), Real time payments & Account
switching (Payments Council Ltd - UK), Financial Institution Direct Debit
(SWIFT), Mandate Status List (Danish Bankers’ Association)
ISO_20022_LV_v118
Slide 22
ISO 20022 – The Payments SEG (2/3)
Covering instruments such as:
Payments
Covering actors such as:
Credit
transfers
Cheques
Direct
debits
Financial
institutions
Private &
corporate
customers
Clearing
houses &
RTG
systems
Central
banks
ISO_20022_LV_v118
Slide 23
ISO 20022 – The Payments SEG (3/3)
Including business areas such as:
Clearing & settlement
Payment initiation
Communications
between the
ordering
customer and its
bank, etc.
Payments
Interbank
transfers via
correspondent
banking or
ACHs, high
value payments,
low value bulk
payments,
RTGS, etc.
Cash Management between various actors:
Account
opening,
standing orders,
transaction and
account
information,
advices &
statements from
…
ISO_20022_LV_v118
...the account
servicing
institutions to
account
owners,
including
reporting from
the financial
institution…
…to the
ordering &
beneficiary
customers,
reconciliation,
exceptions &
investigations
handling.
Slide 24
ISO 20022 – The Securities SEG (1/3)

Members – 57 experts
– 15 countries: BR, DE, DK, FI, FR, GB, IE, JP, LU, NL, NO, SE, SG,
US, ZA
– 7 liaison organisations: Clearstream, ECB, Euroclear, ISDA/FpML,
ISITC, FPL, SWIFT

Convener: Kevin Wooldridge, Standard Logic (GB); Vice-convener:
Axelle Wurmser, BNP Paribas (FR); Secretary: Mireia Guisado-Parra,
SWIFT
 Approved: Investment funds (SWIFT), Transaction regulatory reporting
(SWIFT), Proxy voting (SWIFT), Issuer’s agents communication for CA
(Euroclear), FPP report (SWIFT) , Corporate actions (SWIFT), Settlement &
reconciliation (SWIFT), Post-trade (SWIFT/Omgeo), Total portfolio valuation
report (ISITC/SWIFT), CCP Clearing (FPL/SWIFT), Collateral Management
(FPL, ISDA/FpML, ISITC, SWIFT)
 Under evaluation: none
 Next: Alternative funds (SWIFT), Target2-Securities (SWIFT/4CB), SSI for
Securities, Payments & FX (ISITC, Omgeo, FPL), Transparency of Holdings
(Clearstream)
ISO_20022_LV_v118
Slide 25
ISO 20022 – The Securities SEG (2/3)
Covering instruments such as:
Securities
Covering actors such as:
Equities
Fixed
income
Funds
Derivatives
ISO_20022_LV_v118
Service
bureaux
Investment
managers,
distributors,
transfer
agents, fund
administrators
Broker /
dealers
Custodians
Regulators
Market
Data
Providers
Stock
exchanges,
ETC
providers
CSDs,
ICSDs
Clearing
houses,
CCPs
Slide 26
ISO 20022 – The Securities SEG (3/3)
Including business areas such as:
Securities
Issuance
Trade
Initiation,
pretrade
Trade,
posttrade
Securities
Account
opening,
standing orders,
transaction and
account
information,
advices &
statements,
queries &
investigations
ISO_20022_LV_v118
Collateral management
Collateral,
repos,
securities
lending &
borrowing
Clearing
&
settlement
Custody
Income,
corporate
actions,
market data,
proxy voting
Slide 27
Looking at the advantages ISO 20022
brings over ISO 15022
ISO 20022:

Builds on the ISO 15022 data dictionary concept and registration
infrastructure, but strengthens the monitoring by the industry

Uses a more robust, syntax independent development
methodology based on modelling of business processes and
transactions

Uses XML or ASN.1 as the syntax for the actual physical
messages

Has a wider scope than ISO 15022, which is only for securities
messages
Syntax independent business modelling
is key to the ISO 20022 standard !
ISO_20022_LV_v118
Slide 28
ISO 20022 – The FX SEG (1/3)

Members – 24 experts
– 9 countries: CA, CH, CN, FR, GB, NO, SE, US, ZA
– 3 liaison organisations: FPL, ISITC, SWIFT

Convener: Ram Komarraju, CLS (US); Vice-convener:
Zaiyue Xu, CFETS (CN); Secretary: vacant

Kick-off meeting: in September 2006

Approved: Forex notifications (CLS)

Next: Post Trade Foreign Exchange Messages (CLS), FX
Post-Trade Trade Confirmation and FX Post-Trade Trade
Confirmation (CFETS)
ISO_20022_LV_v118
Slide 29
ISO 20022 – The FX SEG (2/3)
Covering instruments such as:
Foreign eXchange
Trading
portals,
matching
services
providers
Covering actors such as:
Spot
Swaps
Forward
Investment
managers
Currency
Options
Custodians
Dealers
Money
brokers
ISO_20022_LV_v118
Hedge
funds
CLS and
CLS
settlement
members
Application
providers
Industry
associations
(ISDA)
Slide 30
ISO 20022 – The FX SEG (3/3)
Including business areas such as:
Pretrade:
IOI,
quotes,
etc.
Trade:
order,
execution,
allocation,
affirmation,
etc.
Foreign eXchange
Notification
of trades to
third parties
ISO_20022_LV_v118
Trigger
events,
option
exercises
Post-trade:
confirmation,
matching,
assignment,
novation, etc.
Clearing and
Settlement,
including
netting and
related
reporting
Slide 31
ISO 20022
The Trade Services SEG (1/3)

Members – 33 experts
– 13 countries: CA, CH, DE, DK, FI, FR, GB, IS, IT, JP, NL, US, ZA
– 1 liaison organisation: SWIFT

Convener: Tapani Turunen, Tieto (FI) Vice-convener: Peter
Potgieser, RBS (NL); Secretary: David Dobbing, SWIFT

Kick-off meeting: in September 2006

Approved: Invoice Financing Request (CBI Consortium), Trade
Services Management (SWIFT), Financial Invoice (UN/CEFACT
TBG5), Demand Guarantees and Standby Letters of Credit (SWIFT)

Under evaluation: Factoring Services (ASF)

Next: Invoice Tax Report (FFI & Tieto)
ISO_20022_LV_v118
Slide 32
ISO 20022
The Trade Services SEG (2/3)
Covering products…
Trade Services
…and services such as:
Collection
Letter of
credit
Documentary
credit
Open
Account
Trading
Reconciliation
(A/R, A/P),
remittance data
e-Invoicing
Guarantee
EBPP
Purchase
order,
transport
documents
ISO_20022_LV_v118
Invoice
financing
Slide 33
ISO 20022
The Trade Services SEG (3/3)
Including actors such as:
Private and
corporate
customers
(treasurers)
Financial
Institutions
Trade Services
Risk
management
entities
ISO_20022_LV_v118
Application
providers
Associations
providing rules
and master
agreements
(eg IFSA, ICC)
Trade facilitators:
chambers of
commerce, insurance
co, freight forwarders,
carriers, customs,
factoring co
Slide 34
ISO 20022 – The Cards & Related Retail
Financial Services SEG (1/3)

Members – 31 experts
– 14 countries: AT, CA, CH, DE, DK, FI, FR, GB, JP, KR, NL, SE,
US, ZA
– 3 liaison organisations: IFX, Mastercard, SWIFT

Convener: William Vanobberghen, Groupement des Cartes Bancaires
(FR); Vice-convener: Richard DuVall (IFX); Secretary: Reinhard
Herwig, SRC (DE)

Kick-off meeting: on 23-24 October 2008

Approved: CAPE – Acceptor to Acquirer and Terminal Management
(EPASOrg)

Under evaluation: None
Next: Acquirer to Issuer Card Messages (TC68/SC7/TG1), ATM
interface for transaction processing and ATM management (IFX
Forum/nexo A.I.S.B.L-formerly EPASOrg), Dispute Resolution in Cards
Fee Collection, Payment Tokens Management Exchanges (nexo
A.I.S.B.L & ISO TC68/SC7/TG1)

ISO_20022_LV_v118
Slide 35
ISO 20022 – The Cards & Related Retail
Financial Services SEG (2/3)
Covering instruments…
Cards and Retail
Debit card
…and actors such as:
Charge and
credit card
Card
holder
Prepaid
card
Hard- and
Software
providers
Acceptor
(merchant,
retailer)
Card issuer
Card
scheme
Acquirer
Intermediary
agent
ISO_20022_LV_v118
Slide 36
ISO 20022 – The Cards & Related Retail
Financial Services SEG (3/3)
Including business areas such as: Transactions between
Transactions
between
acquirers and
card issuers
ATM processes
such as
authorization,
processing, ATM
management
and inventory
ISO_20022_LV_v118
merchants and acquirers,
and cardholders and issuers
that support authorization,
clearing, reversal,
chargeback, dispute
processing, etc.
Similar messages
transacted on
internet or from
mobiles or other
personal devices
POI messages
for payments,
administrative
and device
related
services
Slide 37
ISO 20022 – Technical Support Group

Members – 24 experts
– 10 countries: BR, CN, CH, DE, FI, FR, GB, JP, KR, US
– 4 liaison organisations: Euroclear, FPL, ISITC, SWIFT

Convener: Frank Dreisch, Gefeg (DE); Vice-convener:
Anthony Coates (GB); Secretary: Kris Ketels, SWIFT

Kick-off meeting: on 23-24 October 2008

Mission: help RMG, RA, SEGs and Submitting
Organisations with technical matters
ISO_20022_LV_v118
Slide 38
Continuing with today’s agenda…
ISO 20022
Cross-industry harmonisation
ISO_20022_LV_v118
Slide 39
Harmonising across all industries
with UN/CEFACT
United Nations/CEFACT –
Centre for trade facilitation and e-business

Created in 1997 to improve world-wide co-ordination
of trade facilitation across all industries

Focusing on international standards for electronic
transactions (e.g., ebXML venture with OASIS)

Promoting technology neutral business modelling and
a central library of core components
Goal is to establish interoperability between ISO 20022 and
UN/CEFACT repositories
ISO_20022_LV_v118
Slide 40
Harmonisation between ISO and
UN/CEFACT
 2004: TC68, TBG5 and SWIFT sign a MoU to investigate
harmonisation
 2005: Trial submission from ISO 20022 to UN/CEFACT
 2006: ISO TC68/WG4 takes over technological alignment
 2007: Official submission from ISO 20022 to UN/CEFACT
 2008: Customer-to-bank payment components harmonised and
accepted in UN/CEFACT core component library
 2009: The cooperation is placed under the umbrella of the ‘MoU on eBusiness’
 2010: Official submission of a financial e-invoice message from
UN/CEFACT to ISO 20022
ISO_20022_LV_v118
Slide 41
Continuing with today’s agenda
ISO 20022
Interoperability within
the financial industry
ISO_20022_LV_v118
Slide 42
Using ISO 20022 modelling to reach
interoperability
All institutions have
their own sets of
data objects
ISO standardizes common
data objects…
…and groups them into ‘syntaxneutral’ message models, which...
… can be ‘transformed’ in
message formats in the
desired syntax
XML
ASN.1
FpML
FIX
ISO_20022_LV_v118
Slide 43
ISO 20022 compliance at model level
Repository
ISO 20022
Dictionary
Dictionary
Catalogue
ISO 20022
message
models
Card payments
Payments clearing
& settlement
physical
message
representation
ISO 20022 ASN.1 syntax
ISO_20022_LV_v118
ISO 20022 XML syntax
Slide 44
ISO 20022 compliance at model level
Repository
ISO 20022
Dictionary
Dictionary
ISO 20022 compliant
Catalogue
ISO 20022
message
models
Card payments
Payments clearing
& settlement
physical
message
representation
other syntax
ISO 20022 compliant
‘using a domain specific syntax’
ISO_20022_LV_v118
ISO 20022 syntax
ISO 20022 compliant
Slide 45
“Investment Roadmap”
for ISO, FIX, XBRL and FpML syntaxes
The Investment Roadmap is maintained by the Standards
Coordination Group including the following organisations:
Download the Investment Roadmap and related FAQ
ISO_20022_LV_v118
Slide 46
Interoperability in the customer-to-bank
payment domain
Bank A
IFX format
Proprietary format
Bank B
Customer A
SWIFT
MT 101
Bank C
Let us look at a concrete example from payments area:
a customer may need to adapt to the format of the banks…
ISO_20022_LV_v118
Slide 47
Interoperability in the customer-to-bank
payment domain
Customer A
IFX format
Proprietary format
Bank A
Customer B
SWIFT
MT 101
Customer C
…or banks may need to accept many formats…
ISO_20022_LV_v118
Slide 48
Interoperability in the customer-to-bank
payment domain
Proprietary
TWIST
ISO 20022
Core Payment
Kernel model
SWIFT MT
OAGi
IFX
The reverse engineering produces a canonical ISO 20022
message model
ISO_20022_LV_v118
Slide 49
Interoperability in the customer-to-bank
payment domain
Core
Payment
Kernel
IFX
IFX
Core
Payment
Kernel
Adopting ISO 20022 facilitates convergence and co-existence
ISO_20022_LV_v118
Slide 50
www.iso20022.org
uestions
&A
nswers
[email protected]
ISO_20022_LV_v118
Slide 51
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The success of ISO 20022