The recent announcement of the UK Platform Group to adopt ISO 20022 for platform to platform re-registration is the latest in a series of successes for the international standard. The promise of a universal financial industry message standard may not be so far fetched.
ISO 20022 is an ambitious initiative. The goal is to create a common language for all financial communication from derivative trading to invoicing and the progress made in its relatively short lifetime is impressive.
The key to its success is to seek evolution not revolution. In addition to maintaining the actual message standards, ISO 20022 provides a framework within which new standards can be developed. Thus, rather than imposing new practices on reluctant participants it helps market or regulatory driven initiatives build their own new standards in a consistent way. The unenviable task of thrashing out agreements in detail between industry players is left to bodies such as the Securities Market Practice Group.
As the UK Platform Group will know, the decision to adopt ISO 20022 is just the first step towards realising the benefits of STP. Message standards are an essential building block but will deliver nothing unless coupled with complementary process and system change.
Altus is not wedded to any standard, but we are inevitably involved in a number of ISO 20022 initiatives, primarily relating to funds. Whilst we understand the detail of message formats and the supporting technologies our real expertise is in helping our clients maximise the operational efficiencies and risk reductions that the new standards make possible.
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