BIS requests feedback on ISO 20022 harmonisation suggestions.
The Bank for International Settlements has started a discussion about how to make it easier for people to use the ISO 20022 standard for financial messaging when sending money across borders.
ISO 20022 gives payments a common language that makes it possible to share more structured and richer data through standard messages.
At the moment, cross-border payments are slowed down a lot by the fact that payment messaging standards aren’t all the same and are used in different ways. The ISO 20022 format is being introduced to fix these problems, but different interpretations of the specification in different markets could make it less useful as a solution.
Technical experts from the CPMI and the Payments Market Practice Group worked together to create a set of recommendations for a unified adoption and use of ISO 20022 for cross-border payments.
Since many countries are in the process of implementing ISO 20022, most of the work has been on what will happen after the coexistence period between Swift MT and ISO 20022 messaging standards ends in November 2025, when the legacy MT format will no longer be used.
“Realisation of the benefits of the CPMI harmonisation requirements will depend, crucially, on their widespread uptake,” says the task force in its report. Limited or incomplete uptake could lead to more fragmentation and lack of interoperability. The harmonisation requirements would add to the market practice guidelines that are already in place by setting high-level requirements that the different international and local usage guidelines would have to follow.
“Ideally, harmonising usage of ISO 20022 for cross-border payments would be achieved on a wide scale, regardless of specific user community or use cases (ie it will not be tailored to one user community and use case only).”
The BIS wants to hear what people think about the proposals by May 10, 2023. During the consultation period, the BIS Committee on Payments and Market Infrastructures plans to hold online workshops to get more people in the industry involved and to make it easier for people to respond to the consultative report.
