ISO 20022

Introduction to ISO 20022 –

Universal financial industry
message scheme

ISO_20022_LV_v75 Slide 1
Agenda
 ISO 20022:
– Value proposition
– The standard
– The actors
– The registration process
– The Repository
 ISO 20022 registration platform
 Cross industry harmonisation
 Interoperability within the financial industry
 Q&A

ISO_20022_LV_v75 Slide 2
The ISO 20022 value proposition (1/5)
Objective
To enable communication interoperability
between financial institutions , their market
infrastructures and their end-user communities
Major obstacle
Numerous overlapping standardization initiatives
looking at XML financial messages:
MDDL, FIX, FinXML, VRXML, RIXML, XBRL, FpML, IFX, TWIST,
SWIFT, RosettaNet, EPC, OAGi, ACORD, CIDX, etc.

ISO_20022_LV_v75 Slide 3
The ISO 20022 value proposition (2/5)

Proposed solution
A single standardisation approach (methodology,
process, repository) to be used by all financial
standards initiatives

ISO 20022

ISO_20022_LV_v75 Slide 4
The ISO 20022 value proposition (3/5)

Convergence into ONE standard is the long term

objective…

… but in the interim several standards need to

coexist to enable quick response to competitive
pressures and regulatory demands
ISO_20022_LV_v75 Slide 5
 The ISO 20022 value proposition (4/5)
Growth adds exponential complexity and expense…

EDIFACT RosettaNet Without common building

blocks:
IFX SWIFT • Point-to-point connection
• Data is mapped directly from
one application to another
Proprietary • Costly, unscalable and
OAGi format difficult to implement and
maintain
• Process, routing, rules logic
TWIST needs to be coded to specific
42 interfaces = n * (n-1) message types

ISO_20022_LV_v75 Source: John Mersberg, IBM Corporation Slide 6

 The ISO 20022 value proposition (5/5)
Standardized implementation reduces cost, time to effect
change and improves overall performance…

EDIFACT RosettaNet
Canonical message model =
SWIFT • True process integration
IFX
• Reduced brittleness, faster to
respond to change
Canonical Proprietary • Shared message services –
OAGi Message Model
(i.e. ISO 20022) format single/shared parser, message
independent rules engine, etc.
• Unified monitoring / audit trail
TWIST 14 interfaces = n * 2

ISO aims at long term convergence,

while facilitating short term coexistence…
ISO_20022_LV_v75 Slide 7
ISO 20022
Illustrating business modelling

All institutions have

their own sets of
data objects

ISO standardizes common

data objects…

…and groups them into ‘syntax-

neutral’ message models, which...

… can be ‘transformed’ in
ASN.1 message formats in the
desired syntax
XML ISO 15022
FIX
ISO_20022_LV_v75 Slide 8
The ISO 20022 recipe
Main ingredients (1/2):
 Modelling-based standards development
– Syntax-independent business standard
– Validated by the industry
 Syntax-specific design rules for XML
– Predictable and ‘automatable’
– Protect standard from technology evolution
 Reverse engineering approach
– Protect industry investment and ease interoperability
– Prepare for future migration

ISO_20022_LV_v75 Slide 9
The ISO 20022 recipe
Main ingredients (2/2):
 Development / registration process
– Clearly identified activities and roles
– Business experts and future users involved upfront
– Technical experts involved when required
 Repository on the ISO 20022 website
– Business Process Catalogue & Data Dictionary
– Outside of official standard (maintained by registration
bodies)
www.iso20022.org

ISO_20022_LV_v75 Slide 10
The six parts of ISO 20022
PART 1: International Standard: Overall methodology and format
specifications for inputs to and outputs for the ISO 20022 Repository

PART 2: International Standard: Roles and responsibilities of the

registration bodies

PART 3: Technical specification: ISO 20022 modelling guidelines

PART 4: Technical specification: ISO 20022 XML design rules

PART 5: Technical specification: ISO 20022 reverse engineering

PART 6: International Standard: Message transport characteristics

Copies can be obtained from www.iso.org

ISO_20022_LV_v75 Slide 11
ISO 20022: The actors (1/2)
Submitting organisations
Communities of users or organisations that want to develop
ISO 20022 compliant messages to support their financial
transactions

Could be
ANBIMA EPASOrg ISITC SWIFT
ASF EPC FISD UN/CEFACT
Berlin Group Euroclear NBB TWIST
CBI Consortium FPL OAGi UK Payments Council
Clearstream ISDA/FpML Omgeo 4CB
CLS IFX SC7/WG9 etc.

ISO_20022_LV_v75 Slide 12
ISO 20022: The actors (2/2)
 Registration Management Group, RMG
– Overall governance, court of appeal
– Approve business justifications for new standards
– Create Standard Evaluation Groups (SEGs)
 Standards Evaluation Groups, SEGs
– Represent future users in specific financial areas
– Validate candidate message standards
 Registration Authority, RA
– Ensure compliance
– Maintain and publish ISO 20022 Repository
 Technical Support Group, TSG
– Assist RMG, SEGs, RA and submitting organisations

ISO_20022_LV_v75 Slide 13
ISO 20022
The registration process (1/3)
R Submitting
Financial industry group or standards body
M organisation

G Business Business justification

justification

RMG
Project approval & allocation to a SEG
m
o Submitting
Development & provisional registration
organisation
n & RA
i Business validation
SEG
t Official registration Repository
o RA and publication
Dictionary
r Submitting Optional pilot testing
s organisation or first implementers Catalogue
& users
www.iso20022.org
ISO_20022_LV_v75 Slide 14
ISO 20022
The registration process (2/3)
R Submitting
Financial industry group or standards body
M organisation

G Business Business justification

justification

RMG
Project approval & allocation to a SEG
m Candidate ISO 20022 messages
o Submitting
Development & provisional registration
organisation
n & RA
i Business validation
SEG
ISO 20022 messages
t Official registration Repository
o RA and publication
Dictionary
r Submitting Optional pilot testing
s organisation or first implementers Catalogue
& users
www.iso20022.org
ISO_20022_LV_v75 Slide 15
 ISO 20022 registration process (3/3)
Yearly maintenance process
Timing
By June 1 Users CRs Users introduce Change Requests to the RA
By July 7 SEG screens Change Requests (CRs)
SEG

By August 21 Submitting Submitting organisation prepares ‘Maintenance

organisation Change Request’ with each CR implementation
By October 1 SEG approval/rejection
SEG

By December 1 Submitting Development of new versions

organisation
& RA
By February 1 Validation of new versions
SEG

April-May
RA
Registration and publication Repository

Dictionary
Submitting First implementers
organisation Catalogue
ISO_20022_LV_v75 & users Slide 16
ISO 20022 - The Financial Repository

 Data Dictionary
– Business Concepts
– Message Concepts
– Data Types
 Business Process Catalogue
– Financial business process models
– Financial business transactions, including messages
– XML message schemas
www.iso20022.org
ISO_20022_LV_v75 Slide 17
Continuing with today’s agenda…
ISO 20022

ISO 20022 Registration Platform

ISO_20022_LV_v75 Slide 18
ISO 20022 - The Deployment
 Approval of the international standard 

 Selection of the Registration Authority 

 Set-up of the www.iso20022.org 

 Creation of Registration Management Group 

 Creation of the first Standards Evaluation Groups 

 Registration and publication of first ‘ISO 20022 messages’ 

Ongoing: promotion to developers (standardizers, industry bodies)

and users (vendors, end-users)

ISO_20022_LV_v75 Slide 19
ISO 20022
How does it fit into the ISO structure?
ISO Technical Committee TC68
Financial Services
SC2 SC4 SC7
Security Securities Banking WG4
ISO 20022
RMG ISO 20022
Review

RMG members nominated by TSG RA

P-member countries and A-
liaison organisations
SEG
Securities SEG
TSG & SEG members
Trade Services
nominated by all member
countries and liaison SEG
SEG
organisations Payments
FX
SEG
Cards
ISO_20022_LV_v75 Slide 20
ISO 20022
Registration Management Group (RMG)
 Members - 72 senior managers from:
– 22 countries: AT, AU, BR, CA, CH, CN, DE, DK, FI, FR, GB,
IT, JP, KR, LU, NL, NO, RU, SE, SG, US, ZA.
– 12 liaison organisations: Clearstream, ECB, EPC, Euroclear,
FISD, FPL, FpML, IFX, ISITC, SWIFT, TWIST, VISA
 Convener: Gerard Hartsink, ABN Amro (NL); Vice-
convener: Bob Blair, JPMorgan Chase (US); Secretary:
Cynthia Fuller, X9 (US)
 Meetings: twice a year
 Key decisions:
– Creation of five SEGs: Payments and Securities in 2005, Trade
Services and Forex in 2006, Cards & Related Retail Financial
Services in 2008
– Approval of 45 development projects

ISO_20022_LV_v75 Slide 21
ISO 20022 – The Payments SEG (1/3)
 Members – 56 experts
– 17 countries: AT, AU, CH, DE, DK, FI, FR, GB, IT, JP, KR, NL, NO,
RU, SE, US, ZA
– 5 liaison organisations: Euroclear, IFX, ISITC, SWIFT, TWIST
 Convener: Thomas Egner, Commerzbank (DE); Vice-convener: Bob
Blair, JP Morgan Chase (US); Secretary: Deb Hjortland, FRB (US)
 Approved: C2B payment initiation (SWIFT/ISTH), Interbank credit
transfers and direct debits (SWIFT), Exceptions and investigations
(SWIFT), B2C advice & statement (ISTH/ISITC), Mandates (SWIFT) ,
Change/verify account identification (GUF), Bank account management
(SWIFT), Creditor payment activation request (CBI Consortium), Cash
account reporting request and notification (SWIFT)
 Under evaluation: none
 Next: Cash management (SWIFT), Cash lodgement and withdrawal
(NBB), Card clearing payments (Berlin Group), Real time payments
(Payments Council Ltd – UK), Bank Services Billing (TWIST/SWIFT)
ISO_20022_LV_v75 Slide 22
 ISO 20022 – The Payments SEG (2/3)
Covering instruments such as:

Payments
Covering actors such as:
Credit
transfers
Cheques
Financial
Direct institutions
debits Clearing
Private & houses &
corporate RTG
customers systems
Central
banks

ISO_20022_LV_v75 Slide 23
ISO 20022 – The Payments SEG (3/3)
Clearing & settlement
Including business areas such as:
Interbank
Payment initiation transfers via
correspondent
banking or
ACHs, high
value payments,
Communications low value bulk
between the
ordering
customer and its
Payments payments,
RTGS, etc.
bank, etc.
Cash Management between various actors:
Account ...the account …to the
opening, servicing ordering &
standing orders, institutions to beneficiary
transaction and account customers,
account owners, reconciliation,
information, including exceptions &
advices & reporting from investigations
statements from the financial handling.
… institution…
ISO_20022_LV_v75 Slide 24
 ISO 20022 – The Securities SEG (1/3)
 Members – 72 experts
– 19 countries: AU, BR, CA, CH, DE, DK, FI, FR, GB, IE, JP, LU, NL,
NO, RU, SE, SG, US, ZA
– 8 liaison organisations: Clearstream, ECB, Euroclear, ISDA/FpML,
ISITC, FISD, FPL, SWIFT
 Convener: Kevin Wooldridge, Standard Logic (UK); Vice-convener:
Amod Dixit, Standard Chartered (SG); Secretary: Stephanie Duverger
(ECB)
 Approved: Investment funds (SWIFT), Transaction regulatory reporting
(SWIFT), Proxy voting (SWIFT), Issuer’s agents communication for CA
(Euroclear), FPP report (SWIFT) , Corporate actions (SWIFT), Settlement &
reconciliation (SWIFT), Post-trade (SWIFT/Omgeo)
 Under evaluation: Pre-trade/trade (SWIFT/FPL), Total portfolio
valuation report (SWIFT/ISITC), Settlement modification/replace &
allegement response (SWIFT)
 Next: Alternative funds (SWIFT), Target2-Securities (SWIFT/Bundesbank
on behalf of 4CB), CCP Clearing (FPL/SWIFT), Collateral Management
(FPL, FpML, ISITC, SWIFT), Investment Fund Prospectus (ANBIMA)
ISO_20022_LV_v75 Slide 25
 ISO 20022 – The Securities SEG (2/3)
Covering instruments such as:
Securities
Equities Covering actors such as:
Service
Fixed bureaux
income Investment
managers, Broker /
Funds distributors, dealers
transfer Custodians
agents, fund
Deriva- administrators
tives Regulators
Stock CSDs,
exchanges, ICSDs
ETC
Market providers Clearing
Data houses,
ISO_20022_LV_v75 Providers CCPs Slide 26
ISO 20022 – The Securities SEG (3/3)
Including business areas such as:
Trade Trade, Clearing
Initiation, post- &
Securities pre- settlement
Issuance trade trade

Securities Custody
Account Collateral management
opening, Income,
standing orders, corporate
transaction and actions,
account market data,
information, Collateral, proxy voting
advices & repos,
statements, securities
queries & lending &
investigations borrowing

ISO_20022_LV_v75 Slide 27
Looking at the advantages ISO 20022
brings over ISO 15022
ISO 20022:
 Builds on the ISO 15022 data dictionary concept and registration
infrastructure, but strengthens the monitoring by the industry
 Uses a more robust, syntax independent development
methodology based on UML modelling of business processes
and transactions
 Uses XML as the syntax for the actual physical messages
 Has a wider scope than ISO 15022, which is only for securities
messages
 Is in line with directions taken by other industries (UN/CEFACT)

Syntax independent business modelling

is key to the ISO 20022 standard !

ISO_20022_LV_v75 Slide 28
ISO 20022 – The FX SEG (1/3)

 Members – 19 experts
– 8 countries: AU, CA, CH, FR, GB, NL, NO, US
– 3 liaison organisations: FPL, ISITC, SWIFT
 Convener: Ludy Limburg, RBS (NL); Vice-convener:
Tony Smith, JP Morgan Chase (UK); Secretary: vacant
 Kick-off meeting: in September 2006
 Approved: Forex notifications (CLS)

ISO_20022_LV_v75 Slide 29
 ISO 20022 – The FX SEG (2/3)
Covering instruments such as:

Foreign eXchange
Spot Covering actors such as: Trading
portals,
matching
Swaps services
Hedge providers
Forward Investment funds
managers Custodians
Currency
Options Dealers
CLS and Application
CLS providers
settlement
members Industry
Money associations
brokers (ISDA)
ISO_20022_LV_v75 Slide 30
ISO 20022 – The FX SEG (3/3)
Including business areas such as: Trade:
order,
Pre- execution,
trade: allocation, Post-trade:
IOI, affirmation,
quotes, etc. confirmation,
etc. matching,
assignment,
novation, etc.
Foreign eXchange
Notification Clearing and
of trades to Trigger Settlement,
third parties events, including
option netting and
exercises related
reporting
ISO_20022_LV_v75 Slide 31
ISO 20022
The Trade Services SEG (1/3)
 Members – 31 experts
– 14 countries: AU, CA, CH, DE, DK, FI, FR, GB, IS, IT, JP,
NL, US, ZA
– 1 liaison organisation: SWIFT
 Convener: Tapani Turunen, Tieto (FI) Vice-convener: Peter
Potgieser, RBS (NL); Secretary: Jim Wills, SWIFT
 Kick-off meeting: in September 2006
 Approved: Invoice Financing Request (CBI Consortium),
Trade Services Management (SWIFT), Financial Invoice
(UN/CEFACT TBG5)
 Next: Demand Guarantees and Standby Letters of Credit
(SWIFT)

ISO_20022_LV_v75 Slide 32
 ISO 20022
The Trade Services SEG (2/3)
Covering products…
Trade Services
Collection …and services such as:

Reconciliation
Documentary
credit Open (A/R, A/P),
Letter of Account remittance data
credit Trading

Guarantee e-Invoicing
EBPP
Purchase
order,
transport
documents Invoice
financing
ISO_20022_LV_v75 Slide 33
ISO 20022
The Trade Services SEG (3/3)
Including actors such as:

Private and
corporate Financial Associations
customers Institutions providing rules
(treasurers) and master
agreements
(eg IFSA, ICC)
Trade Services
Risk Trade facilitators:
management chambers of
entities Application commerce, insurance
providers co, freight forwarders,
carriers, customs,
factoring co

ISO_20022_LV_v75 Slide 34
ISO 20022 – The Cards & Related Retail
Financial Services SEG (1/3)
 Members – 32 experts
– 14 countries: AT, AU, CH, DE, FI, FR, GB, JP, KR, NL, RU,
SE, US, ZA
– 4 liaison organisations: IFX, Mastercard, SWIFT, VISA
 Convener: Chris Starr, APACS (GB); Vice-convener:
William Vanobberghen, Groupement des Cartes Bancaires
(FR); Secretary: Reinhard Herwig, SRC (DE)
 Kick-off meeting: on 23-24 October 2008
 Approved: CAPE – Acceptor to Acquirer and Terminal
Management (EPASOrg)
 Under evaluation: none
 Next: Acquirer to Issuer Card Messages (TC68/SC7/WG9), ATM
interface for transaction processing and ATM management (IFX
Forum)
ISO_20022_LV_v75 Slide 35
 ISO 20022 – The Cards & Related Retail
Financial Services SEG (2/3)
Covering instruments…
Cards and Retail
Debit card …and actors such as:
Charge and
credit card Acceptor
Card (merchant,
Prepaid holder retailer)
card

Hard- and Card issuer

Software
providers Card
scheme
Acquirer
Intermediary
agent
ISO_20022_LV_v75 Slide 36
ISO 20022 – The Cards & Related Retail
Financial Services SEG (3/3)
Including business areas such as: Transactions between
merchants and acquirers,
Transactions and cardholders and issuers
between that support authorization,
acquirers and clearing, reversal,
card issuers chargeback, dispute
processing, etc.

Similar messages
transacted on
internet or from
ATM processes mobiles or other
such as personal devices
authorization, POI messages
processing, ATM for payments,
administrative
management and device
and inventory related
services

ISO_20022_LV_v75 Slide 37
ISO 20022 – Technical Support Group

 Members – 28 experts
– 11 countries: BR, CN, FI, FR, GB, JP, KR, NL, RU,
US, ZA
– 5 liaison organisations: Euroclear, FPL, Mastercard,
SWIFT, VISA
 Convener: Paul Hojka, UK Payments Administration (GB);
Vice-convener: Anthony Coates, Londata (GB);
Secretary: Kris Ketels, SWIFT
 Kick-off meeting: on 23-24 October 2008
 Mission: help RMG, RA, SEGs and Submitting
Organisations with technical matters

ISO_20022_LV_v75 Slide 38
Continuing with today’s agenda…

ISO 20022

Cross-industry harmonisation

ISO_20022_LV_v75 Slide 39
Harmonising across all industries
with UN/CEFACT
United Nations/CEFACT –
Centre for trade facilitation and e-business
 Created in 1997 to improve world-wide co-ordination
of trade facilitation across all industries
 Focusing on international standards for electronic
transactions (e.g., ebXML venture with OASIS)
 Promoting technology neutral business modelling and
a central library of core components

Goal is to establish interoperability between ISO 20022 and

UN/CEFACT repositories
ISO_20022_LV_v75 Slide 40
Harmonisation between ISO and
UN/CEFACT

 2004: TC68, TBG5 and SWIFT sign a MoU to investigate

harmonisation
 2005: Trial submission from ISO 20022 to UN/CEFACT
 2006: ISO TC68/WG4 takes over technological alignment
 2007: Official submission from ISO 20022 to UN/CEFACT
 2008: Customer-to-bank payment components harmonised and
accepted in UN/CEFACT core component library
 2009: The cooperation is placed under the umbrella of the ‘MoU on e-
Business’
 2010: Official submission of a financial e-invoice message from
UN/CEFACT to ISO 20022

ISO_20022_LV_v75 Slide 41
A single ISO-UN/CEFACT approach
ISO 20022
Registration
ISO 20022
Management Group
users
ISO 20022
Registration ISO 20022 IFX
UN / CEFACT Authority Standards
(all industries) Evaluation
Groups
TBG5
UN/CEFACT ISO 20022 Financial Securities
Registry/Repository Repository
CLS
Business Payments
Core Data models
Component Dictionary
Library SWIFT
Trade services

Candidate
ISO 20022 Euroclear
Forex
Common Business messages
Business Process
Processes Catalogue
Cards EPASOrg
www.iso20022.org

ISO_20022_LV_v75 Slide 42
Continuing with today’s agenda

ISO 20022
Interoperability within
the financial industry

ISO_20022_LV_v75 Slide 43
Using ISO 20022 modelling to reach
interoperability

All institutions have

their own sets of
data objects

ISO standardizes common

data objects…

…and groups them into ‘syntax-

neutral’ message models, which...

… can be ‘transformed’ in
ISO 20022 message formats in the
desired syntax
ASN.1 FpML
FIX
ISO_20022_LV_v75 Slide 44
ISO 20022 compliance at model level

Repository
ISO 20022
Dictionary Dictionary

Catalogue

ISO 20022 Payments clearing

message Card payments
& settlement
models

physical
message
representation
ASN.1 syntax ISO 20022 XML syntax

ISO_20022_LV_v75 Slide 45
 ISO 20022 compliance at model level
Repository
ISO 20022
Dictionary Dictionary ISO 20022 compliant
Catalogue

ISO 20022 Payments clearing

message Card payments
& settlement
models

physical
message
representation
ASN.1 syntax ISO 20022 syntax

ISO 20022 compliant ISO 20022 compliant

‘using a domain specific syntax’

ISO_20022_LV_v75 Slide 46
“Investment Roadmap”
for ISO, FIX, XBRL and FpML syntaxes
The Investment Roadmap is maintained by the Standards
Coordination Group including the following organisations:

Download the Investment Roadmap and related FAQ

ISO_20022_LV_v75 Slide 47
Interoperability in the customer-to-bank
payment domain

Bank A
IFX format

Proprietary format
Bank B

Customer A
SWIFT
MT 101 Bank C

Let us look at a concrete example from payments area:

a customer may need to adapt to the format of the banks…
ISO_20022_LV_v75 Slide 48
Interoperability in the customer-to-bank
payment domain

IFX format
Customer A

Proprietary format
Bank A

Customer B
SWIFT
MT 101

Customer C

…or banks may need to accept many formats…

ISO_20022_LV_v75 Slide 49
Interoperability in the customer-to-bank
payment domain

Proprietary

TWIST ISO 20022 OAGi

Core Payment
Kernel model

SWIFT MT
IFX

The reverse engineering produces a canonical ISO 20022

message model
ISO_20022_LV_v75 Slide 50
Interoperability in the customer-to-bank
payment domain

Core IFX
Payment
Kernel

IFX Core
Payment
Kernel

Adopting ISO 20022 facilitates convergence and co-existence

ISO_20022_LV_v75 Slide 51
 www.iso20022.org

uestions
&A nswers
iso20022ra@iso20022.org
ISO_20022_LV_v75 Slide 52