The Bank for International Settlements' Committee on Payments and Market Infrastructures (CPMI) published harmonised ISO 20022 data requirements that establish a consistent minimum set of messaging standards for more efficient processing of cross-border payments.
The CPMI developed the data requirements for ISO 20022 – a global and open messaging standard for exchanging financial information – in collaboration with the private sector Payments Market Practice Group (PMPG) for use in cross-border payment transactions.
The data requirements, published in Harmonised ISO 20022 data requirements for enhancing cross-border payments – final report to the G20, will facilitate the straight-through processing of end-to-end payments, making them faster and more reliable.
Jon Cunliffe, chair of the CPMI and deputy governor for Financial Stability at the Bank of England said: "These technical requirements will ensure that we are able to grasp the opportunities for more efficient cross-border payments afforded by richer and more structured international messaging standards. They are an excellent example of the type of practical impact the G20 programme can achieve, together with industry, to make cross-border payments faster, cheaper, more transparent and easier to access by 2027."
The increased adoption of ISO 20022 by payment systems around the world is a major opportunity to improve their interoperability. But this opportunity will not be realised if jurisdictions implement the international messaging standard for payments in inconsistent ways. The CPMI's harmonised ISO 20022 data requirements address that risk and provide a common basis for the use of the new messaging standard in cross-border payments.
The report reflects intensive discussions by payment practitioners over the past two years and extensive consultation with industry, including feedback from more than 50 stakeholders who responded to the CPMI's public consultation in early 2023. As such, the CPMI believes these data requirements reflect a broad market consensus.
How far the benefits of adopting these requirements are realised will depend on their uptake. Market participants are therefore encouraged to begin preparations to align with the harmonised ISO 20022 data requirements in earnest and by end-2027 at the latest.
Michele Bullock, former co-chair of the CPMI Messaging Workstream, and Governor of the Reserve Bank of Australia said: "Implementation of these data requirements will require a coordinated effort across the global payments community, but the entire community stands to benefit in the long run from a convergence of these shared data practices."
The CPMI will continue its engagement with payment system operators and financial institutions to foster the implementation of the harmonised data requirements by end-2027. It will also consider how consistent implementation can be assured in future as the payments landscape evolves.
Re-disseminated by The Asian Banker