Many of the ongoing conversations about ‘old vs new’, ‘big’ vs ‘small’ and ‘incumbent’ vs ‘start-up’ in financial technology may be built around the role of ISO 20022 in the banking and payments ecosystem in the years to come.
ISO 20022 will prove a decisive standard for how different institutions are able to adapt. Large incumbent banks have the perennial complication of legacy systems and complex infrastructure. It could prove difficult for them to enable all their systems to become ISO native.
This could hamper many banks in the future from realising the strategic benefits of migration and raises the question of the competitive advantage newcomers in the market will enjoy, given that their system architecture was built with ISO 20022 in mind. The more systems that are enabled to receive richer and machine-readable data from multiple sources, the more opportunities there will be for innovation and competition.
The migration to ISO 20022 ultimately provides a unique opportunity to review the processes used and streamline them in view of creating better customer experiences.
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