In the context of ISO 20022 adoption I have talked about the so-called tipping point a number of times in my talks, decks, and blogs in the past year or so.  It’s that apex at the top of the curve where we all collectively agree as an industry that we’re at the point of no turning back.  I think it is fiendishly difficult to predict precisely when we’ll get there.  I also tend to think that we probably won’t recognize when it actually happens.  It could be that in 2017, say, we’ll all look back and agree that it happened some time in 2015… say.

What was very interesting to me was the frequency with which I heard the term used openly at the recent SWIFT events in New York.  Three.  OK, it’s not that many, but it’s up from zero in 2013.  Listen out for it as you go to events such as ISITC, and other SWIFT events in Toronto and London in the next month or so.  Please let me know how many times you hear it, and we’ll start an index in this blog and track it over time.  Perhaps, just like in Beetlejuice, if we say it enough times then maybe we’ll all just assume that we must be there.

In terms of adoption some communities will be notoriously stubborn.  The securities markets’ use of ISO15022 is so deeply ingrained within global custodians, their networks, and their asset manager clients, that the appetite for change thus far is somewhere between zero and none.

Other markets may also refuse to jump.  At the recent New York events representatives of the US Industry Stakeholder Group [a Dream Team consisting of the NY Fed, X9, NACHA, and The Clearing House] gave a brief update on the Public Consultation Paper for Payments System Improvement. The paper was published in September 2013 in order to "solicit comments on gaps and opportunities in the payment system; potential desired outcomes; strategies and tactics to shape the future of U.S. payments; and the Fed’s role in implementing the strategies and tactics".  This very thorough process has yielded 188 responses from the market.  

Included in this effort is a Business Case Analysis for ISO 20022 where it was noted that “inaction to this global trend is not an option”.  However, the Dream Team must somehow chart a course through some very tricky waters.  There are thousands of small regional banks who are quite-happy-with-the-legacy-USD-formats-thank-you-very-much.  However, the larger global banks are already building 20022 to support SEPA and payments in other markets such as Canada and Australia. They quite naturally want to leverage this investment for their US operations.

The results of all this analysis will be published in the second half of 2014.  The big banks will have their day of course.  They always do.  Ultimately, it will come down to technology to keep everyone happy.  Translation services with a suitably defined period of co-existence is a typical migration model.  I’m sure several vendors whose services are linked to 20022 are looking at this as an opportunity.

Also discussed at the New York event was the ISO 20022 data model.  This is another topic I’ve written about extensively, and it’s pleasing to see these discussions becoming ever more mainstream.  Panelists from State Street and Citi confirmed that their banks are starting to leverage the 20022 model for their internal data architecture.  Jamie Osborne from SWIFT concluded with “it’s your model – go ahead and use it”.   I couldn’t agree more.  This has always been uppermost in the minds of the insiders at ISO.  But how?  Large organisations have large Enterprise Architecture teams and deep pockets… but what about the rest?  I think the vendor community has an important role to play here.  Some vendors may take the opportunity to expose the 20022 model in their products and tools and solutions.  Some may even treat it as an altruistic opportunity to do something for the greater good.   I say, “it’s your model – go ahead and use it – but first pick up the phone and talk to your vendors.”

TTFN.