Guest Contributer: Gary Wright, CEO, BISS Research
As everyone knows, in the securities market, ISO0022 messages are beginning to grab plenty of attention, but very little genuine activity, when it comes to implementation by financial services firms. Why?
SWIFT has been instrumental in the introduction of ISO15022 into the world’s securities markets where bank to bank message traffic accounts for the vast majority of SWIFT volume.
Remember SWIFT is not the owner of the ISO15022 message, just the Agent for ISO and this is why for many investment firms the alternative of using a commercial network supplier or the Internet provides great attraction; especially in terms of cost of entry and ongoing message costs, where SWIFT is very expensive in comparison to the commercial market.
SWIFT states in its articles that it only supports one standard but with ISO15022 running alongside ISO20022 it is actually supporting two. This anomaly is of course confusing the market, where firms are left to decide whether to move ISO20022 or stay with ISO15022 or if they are entering for the first time, do they go into ISO15022 or straight to ISO20022?
SWIFT appear to be in a quandary about leading a migration to ISO20022 when its not even been a decade after the global move to ISO15022 and the enormous costs that it took, mainly paid for by financial services firms. Of course today all firms are very budget conscious and likely to have a greater urgency on where to spend money.
Things would be easier, if there was a clear business case for ISO20022 with positive revenue and business returns, but so far there is not. Oh yes, you will find any number of suppliers stating the technology values and importance of ISO200022 and I agree with most of what is often stated. But I just cannot see how ISO20022 can take precedence or prominence over the many other business rewarding issues, which are around today and which are essential for tomorrow.
However, the whole thing would be different if SWIFT had a stated migration plan from ISO15022 to ISO20022, even if the plan took ten years to complete. That at least would provide the motivation for financial services firms to plan and engage with ISO20022. So why should the finance industry be bothered, when no-one will lead the way or make a good case for migration!