The migration to ISO 20022 offers a major opportunity for banks and corporates, but it is not simply "another IT project" and will require CEO commitment and allocation of appropriate budgets, according to a Deutsche Bank guide.
Swift and major central banks have all made the decision to migrate to the ISO 20022 messaging standard over the next few years.
The move promises greater interoperability between various settlement networks and will enable the transmission of far richer payments data, bringing higher levels of straight-through processing and more efficient compliance processes.
Christian Westerhaus, head, cash products, cash management, Deutsche Bank GTB, says "treating this as just another IT project would be a mistake" and that it offers a significant opportunity for banks and corporates.
"However," he adds: "making the most of ISO 20022 requires a significant and complex migration, affecting not just core payments processing, but many other banking systems and departments".
ISO 20022 migration may not be mandatory but those that don't move risk being excluded from international payments systems. In a guide put together with PPI, Deutsche Bank "strongly recommends" banks carry out a strategic review of all internal information flows to prepare.
Paula Roels, head, market infrastructure and industry initiatives, Deutsche Bank, says: "Given the effort required, it is understandable that some banks may look for shorter migration journeys. On the face of it, maintaining existing systems and converting existing formats into ISO 20022 or vice-versa, either at the inlet or outlet of the payments processing system, or at the interface, could make sense.
"But, not only do you risk losing information this way, you almost certainly miss a fantastic opportunity to improve efficiency and client service."
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