for ISO 20022

Building your ISO 20022

implementation roadmap

Kris Vanholst

SWIFT

9 June 2015

Agenda

• ISO 20022 adoption trends

• Industry harmonisation

• Implementation considerations

• Building an ISO 20022 implementation roadmap

• ISO 20022 on SWIFT

2

Market Infrastructures – Global ISO 20022 adoption

200 initiatives Under discussion > planned > rollout > live

90 countries

FX

Europe Asia Pacific

Americas

Middle East & Africa

Market Infrastructures – Global ISO 20022 adoption

200 initiatives Under discussion > planned > rollout > live

90 countries

SWIFT is

not

mandating

migration

SWIFT will

continue

to support

FIN

1 2

ISO 20022 adoption - context

Financial

institutions

Comply with MI

Internal optimisation

Flexible services to

customers

MI FI FI customers Market

infrastructures

Enable new services

Streamline end-to-end

business processes

Facilitate regional

integration

5

Agenda

• ISO 20022 adoption trends

• Industry harmonisation

• Implementation considerations

• Building an ISO 20022 implementation roadmap

• ISO 20022 on SWIFT

6

7

Less variation,

more global

market practice

Provide a predictable

environment for

MI communities

(versions, release

mgmt..)

Best practice sharing for community

adoption & implementation

1

2

3

Towards a harmonised use of ISO 20022

SWIFT’s community management

FMIs are ready to collaborate with SWIFT and one another to realise greater

harmonisation, according to the maturity of their ISO 20022 initiatives:

SWIFT’s Community Management – What? Principles for harmonisation framework

FMIs need to collaborate

and co-ordinate their efforts

to minimise fragmentation.

SWIFT will play a

co-ordinating role and provide

a platform to drive

harmonisation

Why? How?

What?

Implementation roadmap by Sibos

Publish standards

information in a

consistent format

Remain up-to-date

with ISO 20022

standards release

Adhere where

possible

to global market

practice

Synchronize

standards

upgrades with

industry

MT release cycle

1 2 3 4

SWIFT’s Community Management – Who? Principles for harmonisation framework

• APCA

• ASX

• Banca d’Italia

• Bank of Canada

• Bank of England

• Canadian Payments

Association

• Clearstream

• Colombia ACH

• Deutsche Bundesbank

• DTCC

• EBA

• ECB

• Euroclear

• Hong Kong Interbank Clearing

• IPFA

• JASDEC

• National Bank of Belgium

• NSD Russia

• Reserve Bank of

South Africa

• SADC

• SGX

• The Clearing House

• US Federal Reserve

• VP Securities

SWIFT’s Community Management

Benefits for Financial Institutions

10

Predictability of process

End-to-end solution

Single window

Seamless integration of MI specifications with local

SWIFT footprint

• Development and

budget cycle alignment

(already ingrained from

MT process)

• Unified approach for all MIs

Agenda

• ISO 20022 adoption trends

• Industry harmonisation

• Implementation considerations

• Building an ISO 20022 implementation roadmap

• ISO 20022 on SWIFT

11

A bank’s ISO 20022 landscape

Your participation to

Market

Infrastructures

2017 2016 2015 Step2

EURO1/

STEP1

Baltic CSDs

ACH CENIT (CO)

Securities

2018

& beyond

Payments

12

Impact?

Different timelines

Different scopes

Different sets of messages

Different market practice

Different MI adoption

strategies

Different roll-out

approaches

MT

20022 Live

Adopt Implement

& Test

Phase 1

Like-for-like

Use

Full usage

of MX

Full MX

‘Like-for-like’ = an approach that reduces

the richer functionality of ISO 20022

to the functionality currently covered

by the MT messages.

It is an intermediate step towards full

implementation of ISO 20022.

L I V E

Nov 2017

MI adoption strategies

Example: ISO 20022 HVP adoption strategy

TARGET2 & EURO1/STEP1: Interim ‘like-for-like’

HVP MI

strategy

propri

etary

End

ISO

20022

Live

Implement/

Test Use New services

Start

Introducing ISO 20022 is typically a first step towards

- Elimination of proprietary standards

- Potential launch of new or updates services or

functionalities

L I V E

CSD strategy

MI adoption strategies

Example: ISO 20022 CSD adoption strategy

Replacement of proprietary standards

A bank’s ISO 20022 landscape

Your participation to

Market

Infrastructures

2017 2016 2015 Step2

EURO1/

STEP1

Baltic CSDs

ACH CENIT (CO)

Securities

2018

& beyond

Your customers

(corporates and banks)

2016 2017 2015 2018

& beyond

Payments

15

A bank’s ISO 20022 landscape

16

Market Infrastructures

2017 2016 2015 Step2

EURO1/

STEP1

Baltic CSDs

ACH CENIT (CO)

Payments

Securities

2018

& beyond 2016 2017 2015 2018

& beyond

How to

prepare, plan

& budget for

MI imple-

mentations

How to

internalise

ISO 20022

in your

infrastructure

How to offer

flexible

services to your

customers

Agenda

• ISO 20022 adoption trends

• Industry harmonisation

• Implementation considerations

• Building an ISO 20022 implementation roadmap

• ISO 20022 on SWIFT

17

Design to-be model

A phased approach to implementation

Building an ISO 20022 roadmap

Make an overview of all initiatives

1

Identify & involve all stakeholders

2

Review As-Is 3

Gap analysis 4

Consider implemen-tation options

5

18

What are the gaps to be addressed and what are the constraints

Work out implementation plans (iterative process)

Understand impact on business applications, shared services, infrastructure and integration

Get visibility on current and future ISO 20022 initiatives in other geographies & business areas

Address current and future requirements by leveraging technology

Translation at the edge, core system revamp, silo based …

6

Roadmap for implementation

Engage with all stakeholders across business lines and departments to ensure a holistic view

7

Cost / ROI

Risk

ISO 20022

landscape

Company

Strategy

Internal ongoing &

planned Projects

Local markets

Global Market

Client requirements

Knowledge base

FTE Availability

Regulations

Deadlines

Making an informed ISO 20022 decision

ISO 20022 impact assessment service

Build a strategic roadmap for your organisation

Governance, process flows

Build on ISO 20022 business model

Sizing of systems and connections,

Recovery and resiliency

Middleware, manual processing,

connectors & converters

Design your strategic ISO 20022 infrastructure by

applying an enterprise architecture approach, putting

four views on an organisation together

Business processes &

activities use..

Data that must be

collected, organized,

safeguarded,and distributed using..

Applications such as custom or

off-the-shelf software tools that run

on…

Technology such as computer systems and

networks

ISO 20022 solution design service

MyStandards

& readiness

portal

MI multi-format documentation

MI integration components (XSDs, deployment packs)

MI CUG set-up & joining

MI self-service internet testing

MI

A

MI

B

You

Your customers

+ Compare and analyse versions

+ Compare and analyse market practice of multiple market infrastructures

+ Create your own internal and customer guidelines

+ Offer your customers the same easy onboarding experience

MyStandards

& readiness

portal

MyStandards for you and your customers

Agenda

• ISO 20022 adoption trends

• Industry harmonisation

• Implementation considerations

• Building an ISO 20022 implementation roadmap

• ISO 20022 on SWIFT

28

Onboarding process

• Member-Administered Closed User Group (MA-CUG)

– Market Infrastructure – setting up the CUG

• Join SWIFT

• Service approval request (to SWIFT Board)

• Service administration agreement

• Define service features – Service Profile Form (SPF)

– Participants - joining the CUG

• Join SWIFT

• Fill out Message Service Subscription Form (MSSF)

– Service bureau customers mention the SNL of the SB

• Service administrator (the MI) approves/rejects

• All information available on swift.com > Ordering

29

Before (current behaviour)

• All fields shown

After (with injected business usage guidelines)

• Fields specified in usage guidelines shown

Nordics and Baltics Access user group – May 2015 – Confidentiality: SWIFT community 31

Alliance Access

Optional patch/release 7.1.00

MyStandards

ISO 20022 Adoption Summary of potential back office integration models

33

MI

over

ISO 20022 MX

B/O

MT or Internal

formats

SWIFT

Interface

MX

generation

B/O is adapted to

fully adopt MX MX

B/O stays MT based.

MT/MX mapping is

handled in separate

middleware

MT/MX

mapping

package

MI

Over

ISO 20022 MX MT

MT format

Middleware

SWIFT/

Other interface B/O

MX

MT/MX

mapping

package

MI

Over

ISO 20022 MT

MT format

SWIFT Interface B/O

MX

B/O stays MT based.

MT/MX mapping is

handled by the

SWIFT interface

Web Platform

Access

Financial Applications

Gateway

My Applications

Alliance Portfolio Overview ISO 20022 support

34

Integration

Back-Office

Support

GUI support

Management

All manual operations

support ISO20022

InterAct & FileAct

real-time and store-and-forward

Retry mechanism for real-time

RMA available

Custom integration via

Integration Platform

XMLv2 supports ISO20022 over

MQHA, SOAPHA and File transfer.

New developers guide focuses on

ISO20022 and XMLv2

Routing via specific

routing keywords

Access support for ISO 20022

Good to know

• Deployment Packages

– Are service specific

– Can be obtained from

• www.swift.com download centre

• MyStandards

– Are required for

• Manual entry

• Pretty display/printing

• Validating for STP flows that a message is part of the service

35

Access support for ISO 20022

What is not available “out-of-the-box”

• Reference Data

– Bank File is today FIN oriented

– No directory with DN’s to be used

• Reach Plus directory is under development

• Processing content of FileAct messages

– Bulk/debulk

– Custom signatures

• No message validation like for FIN (for STP flows)

– Only validation for proper XML

– No syntax validation

– No semantic validation

• Limited GUI support for messages with extensions

36

Why SWIFT for ISO 20022?

Efficient community

management

Resilient messaging platform

Standards expertise

Unequalled contribution to ISO 20022

SWIFT - the trusted source for your ISO 20022 initiative

Trusted consulting partners for more ISO 20022 initiatives globally than anyone else

Only worldwide value-added network designed specifically for ISO 20022

Highest standards of reliability, availability and security

Selected as platform provider for key ISO 20022 initiatives in payments and securities

Forty years of community expertise Unique tools and established processes to support communities

for ISO 20022

Questions ?