ISO 20022 - Worksession

ISO 20022: Case Studies and

Implementation

Malene McMahon, Senior Business Manager, SWIFT

13 April 2016

Toronto

IPFA

SEPA,EU

BR

DK

CH

US

CPA, CA

IPFA

T2, EU

AU

Zengin,

JP CNAPS2,

CN

IN

Low-

value

High-

value

BOJNet,

JP

CPA, CA Live

Live

Live

NZ

SG

Live

PG

CL

ZA

PL

BN

CIPS, CN

SADC

UK

ISO 20022 Global Adoption – Payment Market Infrastructures

US

EC

PE

CO

FI

ASEAN

BD

MY

Live

Live

Live

TH

VN

KH

PH Live

DTCC, US

JASDEC, JP

[Post-trade]

Galgo, BR

T2S, EU

CSD, LI

EVK, EE

CSD, LT

ASX, AU

CLS

Treasury MI Securities MI

SGX, SG

[Corp Act, Post-trade)

JASDEC & TSE,

JP

[Corp.Act]

Live

CN

Live

Live

NSD, RU

VP Lux

VP Sec

DK

KDPW

CCP, PL

Live

Live

SADC ID

LCH.Clearnet,

UK

Euroclear, FI

Euroclear, ESES

NBB-SSS,

BE

Live

BN

ABMF

CSIF

VN

MY

ISO 20022 Global Adoption – Securities and Treasury Market

Infrastructures

ISO 20022 Global Adoption – Context

200 initiatives

Market Infrastructures Financial Institutions FI Customers/Corporates

4

Europe Asia Pacific

Americas

Middle East

& Africa

> 100 Payments MIs

> 85 Securities MIs

> 20 FX/trade/cards

700 Corporates

10% in 2015

Regulations in Europe 4

ISO 20022 Global Adoption – REMINDER !!

Market Infrastructures Financial Institutions FI Customers/Corporates

5

SWIFT is

not

mandating

migration

SWIFT will

continue

to support

MTs

ISO 20022 Global Adoption – Americas

Market Infrastructures Financial Institutions FI Customers/Corporates

6

Galgo (BR)

- Investment funds

- Automation

Live since 2011

CPA

- All payments

- New services to

customers

Date TBD

DTCC - Securities

transformation

- Corporate actions

Live since 2011

U.S.

- New HVP system

(Fedwire and CHIPS)

Specs in 2017

New services Automation Transformation

AU-NPP

- Real-time payments

- New services to

customers

2017

ISO 20022 Global Adoption – Asia Pacific

Market Infrastructures Financial Institutions FI Customers/Corporates

ASX

- Corporates actions

- New announcement

service

Live since 2014

JASDEC - Settlement and

reconciliation

- Additional plans

for post-trade

Live since 2014

Brunei

- New RTGS System

- Part of ASEAN

integration

Live since 2014

India

- New Generation

RTGS System

Live since 2013

New services Regional integration Internationalization

Nordic CSD communities

- 6 banks, 4 CSDs

- Funds, CA, Account

Management

As of 2016

ISO 20022 Global Adoption – Europe

Market Infrastructures Financial Institutions FI Customers/Corporates

TARGET2

EURO1/STEP1 - HVP systems

- Close to 1,000

member banks

Under Discussion

T2S - Settlement and

reconciliation

- CSDs and NCBs

with T2S

As of 2015

Payment

systems in CH

- All payment systems

and instruments

As of 2016

Regional integration Regulation Real-time payments

Other

- Jordan

- South Africa

ISO 20022 Global Adoption – Middle East & Africa

Market Infrastructures Financial Institutions FI Customers/Corporates

SARB

- All payment systems

- New services to

customers

Under discussion

SADC

- Low-value

payments

- 13 African countries

2015

New services Regional integration Renewal of legacy systems

10

Adoption Approaches, Challenges and

Harmonization

Full implementation approach

CSD with no ‘ISO’ implementation

‘Like-for-like’ approach

CSD with ISO 15022 already implemented

ISO 20022 challenges

13

Versions

Consistent information

Variations

Towards a harmonized use of ISO 20022

ISO 20022 Harmonization Framework – Who and How

ISO 20022 Harmonization Framework – Principles

ISO 20022 Harmonization Framework

Global market practice

Actors Messages

Message

flows/

choreography

Usage

guidelines

per business

segment

Parties involved

in the end-to-end

transaction

Messages

used

Successful

execution

and exception

handling

Documented ‘subset’

of each message,

‘restrictions’ to simplify

scope

Describes, for a specific business segment, a common

core basis, comprising:

ISO 20022 Harmonization Framework

Version and release management

3 2

Adopt latest message version

for any new project

1 Synchronize

standards

upgrades with

industry

MT release cycle

Remain up-to-date with ISO 20022

standards release

ISO 20022 Harmonization Framework

Publication and consistency

MyStandards A common platform

for ISO 20022

Harmonization

ISO 20022 Harmonization Framework – Stakeholders Involved

ISO 20022 Harmonization Framework – Stakeholders Involved

Financial Institutions and their challenges

Market Infrastructures Financial Institutions FI customers/corporates

Financial Institutions and their challenges

Participation in multiple market infrastructures

Impact?

Different timelines

Different scopes

Different sets of messages

Different market practices

Different adoption

strategies/approaches

Different roll-out

approaches Securities

2017 2016 2015 Step

2

EURO1/

STEP1

Baltic CSDs

ACH CENIT (CO)

Payments

Financial Institution and their challenges

2017 2016 2015 Step

2

EURO1/

STEP1

Baltic CSDs

ACH CENIT (CO)

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

Financial institutions and their challenges

Starting point for an implementation roadmap

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 …

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

1

2

3

4

5

6

7

Design to-be model

Make an overview of the initiatives

Identify and involve all stakeholders

Review As-is

Gap analysis

Consider implementa-tion options

Roadmap for implementation

Building an ISO 20022 implementation roadmap

How can SWIFT help?

ISO 20022

Impact

Assessment

Solution

Design

Strategic

Interface

choice

MyStandards

ISO 20022 Impact Assessment

Building your ISO 20022 implementation roadmap

Recommended actions &

Implementation Roadmap

Analyse

‘As-Is’ Operating

Model

Establish

ISO 20022

Landscape

Benchmark against

discussed ‘Ideal

Solution’

• External ISO 20022

market initiatives

landscape

• Inventory

ISO 20022 internal

landscape

• Customized

ISO 20022

impact overview

>>

Your landscape

• Prepare and

present findings,

conclusions

and high level

recommendations

• Identify gaps towards

ideal solution

• Identify secondary

effects

• Establish

recommended

target operating model

• Evaluate and prioritize

• Define recommended

implementation

roadmap

• Assess ‘as-is’

situation

considering:

o Products /

functions

o (internal)

customers

o network and

interface gaps

o flows

o counterparties

Workshops with key people

Analysis of current documentation

Interviews with stakeholders

H o w

Standardized Best Practices and Disciplined Approach

ISO 20022 Solution Design

Designing the best solution for your institution

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

Governance, process flows

Build on ISO 20022 business model

Sizing of systems and

connections,

Recovery and resiliency

Middleware, manual processing,

connectors and converters

Design your strategic ISO 20022 infrastructure by

applying an enterprise architecture approach, putting

four views on an organisation together

Strategic interface choice

Choosing the right tool to support your long term solution for all relevant

business domains

Operations

• Single view

• Monitoring

• Manual processing

• Connectors and converters

Business

Technology

• Sizing of systems and connections,

• Recovery and resiliency

• Flexible business processing

• Extensive user interface

• Supports cut off times and prioritization management

MyStandards

For Market Infrastructures, for Financial Institutions, and End-Customers

MyStandards

& Readiness

Portal

MI

MI You MyStandards

& Readiness

Portal

+ Compare and analyse versions

+ Compare and analyse market practice of multiple market infrastructures

• MI multi-format documentation

• MI integration components (XSDs, deployment packs)

• MI CUG set-up and provisioning

• MI self-service internet testing

+ Create your own internal and customer guidelines

+ Offer your customers the same easy on-boarding experience

www.swift.com

SWIFT Business Forum Canada - Real-time retail payments: Building for the future - 13 April 2016