ISO 20022 is already becoming a game-changer for financial institutions across the globe. By enabling interoperability between financial networks and providing a wealth of transactional data, the international messaging standard builds on the benefits of instant payments and serves as an invaluable bridge for facilitating cross-border transactions.
In a recent webinar, Volante heard from a panel of experts on ISO 20022’s role in the broader payments space, as well as how institutions expect to benefit from the standard.
Here are a just few key takeaways:
Strengthening Risk Management Processes
Advancements in technology often come with an increase in risk, and this is particularly true for financial institutions. Instances of fraud and cyber attacks are on the rise, prompting many banks to increase their focus on maintaining secure networks and enhancing risk management processes.
One of the main benefits of ISO 20022 is the additional data produced as a result of transactions. This information can be utilized in a variety of ways, including to strengthen existing risk management tools. Moreover, by feeding ISO 20022 data into processes that leverage machine learning technology, institutions can enhance their fraud security and risk management posture without needing to manually sift through and analyze high volumes of complex information.
Boosting Compliance Efforts
Financial institutions need comprehensive compliance strategies in order to meet the demands of evolving regulations. And given that the disclosure of information is often at the heart of regulatory obligations, the in-depth transactional data produced by ISO 20022 can be used to significantly enhance processes around compliance.
Importantly, those who begin building compliance processes around the standard could also gain an advantage over institutions that are slower to adopt. According to Courtney Trimble of KPMG, it’s expected that within the next four years “ISO 20222 will comprise over 80% of high value payments by volume and 90% of transaction value worldwide.” This represents a considerable shift in the international payments space, and points to the value of leveraging ISO 20022 data sooner rather than later.
Enabling Further Innovation
Finally, ISO 20022 is expected to play a pivotal role in facilitating further innovations in the payment space. By solving for issues such as interoperability and a lack of comprehensive transactional insights, the standard unlocks myriad benefits from increased revenue growth, enhanced customer experiences, and reliably secure and efficient payment processes across the board.
At its core, ISO 20022 is a value-added service, and its inherent flexibility allows institutions to leverage the standard in creative ways and toward the development of new financial products and applications. As Courtney points out, “[ISO 20022] is compatible with both mature and emerging technologies. So, it really opens the door to new product innovation, support for new API delivery channels, and easing the development of future payment services.”
To learn more about how financial institutions expect to benefit from ISO 20022, feel free to download the full webinar here.
