The ISO20022 Standard
A new standard for payment messages that opens the door to a smarter financial world
Transferring money has never been so advanced. The ISO20022 standard invites you to discover a new financial language that makes it possible for payment systems to increase their efficiency and to improve their abilities in a manner we have never seen before
In Israel, as in many other countries, the ISO20022 standard is being adopted in the IAP format published by SWIFT that allows a rich and structured format of payment messages.
This step can improve the precision and speed of financial activity and can make it easier to manage the liquidity of companies and individuals.
What are the advantages of the ISO20022 standard?
The ISO20022 standard not only upgrades the way we execute payments, but it opens a new world of possibilities for improving financial processes and creating value added for its users. The new standard is expected to provide a response to the challenges of the modern world and to upgrade how institutions and businesses act.
Use of data
The ISO20022 standard enables financial institutions to use rich and structured information in a uniform manner, which helps to understand the customer better and to offer the customer more precise value proposals. The use of uniform and clear data also allows advanced analysis of information, identification of new trends and opportunities, and thus contributes to improved service and innovation.
Improved quality of data and efficiency
Due to the ISO20022 standard, transferring money can be more precise, rapid, and efficient than ever. The use of the standard reduces frictions, improves the precision, and allows more friendly and rapid transfers for every user.
Operational advantages for financial institutions
With ISO20022, financial institutions can make automization routine and leverage insights in order to improve their performance and to develop.
Faster and more precise activities assist with operational processes. The standard supports faster Straight Through Processing (STP), eases risk management and improves the work flow through rapid and innovative solutions.
Improved service to the customer
ISO20022 makes rapid financial adjustment and customer service at another level possible, which eases things for private customers as well as institutions.
Opportunities for innovation
The new insights provided by the standard are like a key to the future. With a greater wealth of information and aligned reports, institutions can innovate, lead, and create advanced financial products that will respond to new needs.
What are the business opportunities inherent in adopting the standard?
Shifting to operational advantages and innovation, the ISO20022 standard offers the potential to change challenges into growth opportunities.
Interoperability—an interface and connection between financial systems and institutions worldwide
The ISO20022 standard promotes interoperability among various financial systems worldwide, which makes it possible to establish interfaces and connections among a range of financial institutions. The standard provides a shared language and a uniform data structure, which enables various systems to communicate and understand each other more efficiently. As a result, international payments can be made more rapidly, precise, and secure, while reducing operational costs and improving the user experience. This advanced interoperability also contributes to enhancing the transparency and trust between financial institutions, and allows the development of innovative financial services that are aligned with the global needs of the modern market.
Innovation in enforcing the law regarding financial crime
The standard improves the enforcement mechanisms with an advanced solution to the challenge of “unnecessary filtering”, where legitimate activities are mistakenly labeled as suspicious. The standard provides precise definitions of data, which allow AML examinations and more accurate and efficient sanctions.
Improved management of anomalies and payment reviews
There is no longer a need to waste valuable time on malfunctions and errors, ISO20022 reduced instances of failure, improves the interface with the system in cases of investigations, and provides high-quality data and advanced tools to manage complicated cases.
Simplification of reporting for regulatory requirements
A relief in regulatory reporting processes via easy and clear identification of the details of a transaction. The standard reduces the regulatory burden and makes it possible to comply with requirements in a simpler and more efficient manner.
Development of innovative solutions
ISO20022 is a platform for creativity and innovation. Use the standard’s rich data for developing new products and services, in nontraditional areas as well, and stay one step ahead of the competition.
The Clearing Houses Division at the Bank of Israel is in the midst of SWIFT’s project to adopt the ISO20022 standard in the Zahav (RTGS) system.