Sibos 25: everyone’s job with ISO

For the payments industry to take full advantage of the ISO 20022 messaging standard, all parts of the sector need to do better on data.

That’s the view of ANZ’s Carl Garrett, who told On Air with ANZ Institutional it was critical the sector works to uplift the quality and structure of data that passes between players and beneficiaries when a payment is made, both domestically and across borders.

That’s what’s required “if we're going to be successful in realising the benefits of ISO,” the Head of Global Cross-border Payments at ANZ said.

The ISO 20022 standard is the modern system for data associated with digital payments, including messaging, which SWIFT took up in 2022. Currently in a ‘co-existence period’ for cross-border payments, as different systems and markets adopt it at different rates, it will become the only supported format by November.

Garrett said the benefits of ISO were clear, as long as the system had the right support.

“Whether that be greater compliance through more sophisticated [anti-money laundering] and sanctions screening, with a clear focus on data elements within a message, or whether it be through straight-through processing, providing customers a more sophisticated level of reconciliation,” he said. “If any of that's going to work, and work well in a way that can be scaled, we each need to take ourselves on journeys to uplift the quality of data that we're populating within our payment messages.

“I think it's incredibly foundational. And as we uplift the quantity of data and payment messages, we do ultimately open up the more exciting use cases that will become available to us through ISO in future.”

Garrett made the comments in conversation with Jenny Hutchings, Head of Banks and Diversified Financials at ANZ, ahead of the Sibos financial services conference in September. You can listen to the podcast — the second in a two-part conversation — below. You can listen to the first HERE.

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Hutchings said there was a view among some financial institutions that while the shift to ISO needed to occur, the commercial realities — including cost of the transition — remained a challenge. But the resulting data provides an opportunity, she said.

“It's an interesting time because with that data richness and what we're seeing with changes in technology, how do we harness, and how do actually get value from that?” Hutchings said.

Expectations

As data flows increase, so does expectations around security in all aspects of payments, Garrett said.

“That is, in fact, one of the highest expectations of customers when it comes to cross-border payments,” he said. “We know through all the research that … security in cross-border payments is paramount.”

The challenge for the sector is the gap in standards across markets, Garrett said.

“We're very lucky in Australia and then also in New Zealand to have domestic confirmation of pay capabilities,” he said.

“When it comes to global propositions, [the question is] how do we find the right providers, who have the right level of coverage, to be able to give our remitters the necessary confirmation as to who they're sending funds to that can be relied upon?”

Hutchings said the key was making the process simple for users, and ensuring there were systems in place if issues arose.

“Customers want that same experience if they're sending a payment into Australia, into New Zealand, or if we've got an Australian customer who wants to send it to Europe or a payment to Asia,” she said.

The experts also touched on the progress toward, and importance of, the G20 requirements in payments. Listen to the podcast above to find out more.

Shane White is Editor at ANZ Institutional Insights