EXCLUSIVE: “Time to Make the Shift” – Greg Murray, Santander in ‘The Paytech Magazine’

Santander’s Greg Murray assesses the impact of transitioning to the new ISO 20022 global standard

The financial industry is undergoing a significant transformation with the adoption of ISO 20022, a new global standard for exchanging electronic messages between financial institutions. It will replace older messaging formats like SWIFT MT, offering a more flexible, efficient, and data-rich way to process transactions and communicate across the financial landscape.

But what exactly is ISO 20022, and why does it matter? The new global standard promises to unlock a new era for banking, and for those institutions not already convinced or concerned about the changes, it may be time to get on board.

We spoke to Greg Murray, managing director of treasury services product management at Santander US, who shared his insights on the new standard and its potential impact. There is some concern about how smaller businesses will cope with the shift and to help with this Murray says the transition needs to be a collaborative one.

Speaking to our editor-in-chief Ali Paterson, he explains why it’s an exciting time for the industry.

The Fintech Magazine How are you at Santander and the rest of the industry responding to the new format?

Greg Murray “ISO 20022 has been in a state of evolution since it was proposed but the more intense focus on it has been in the last five years or so. A lot of that is driven by the adoption that global clearing systems want to see.

“You’ve got a lot of clearing systems in Europe, some of which are already ISO compliant. And in the US, we have the Fed’s system that plans to be compliant in March of 2025. We also have The Clearing House system, or CHIPS, here in the US that adopted the ISO format in April of 2024.

“In preparation, banks have had this as a major focus for at least three years in terms of investments, making sure we have the right funding and subject matter expertise to meet the deadlines.”

The Fintech Magazine What will be the impact of this change on your customers and partners?

Greg Murray “Fintechs and other vendors are going to need to adapt to the format to support the payment flow process. And for all our clients, whether that’s individuals, small businesses, or large corporations, I think it will be a bit of a mixed bag.

“Some of our clients are already ISO native. They’re using file-based systems that have been provided by ERP providers that are already in the ISO format. Your largest corporations are probably there whereas, for smaller companies, it’s more mixed. Some of our clients were not aware of ISO, even to this point.

“For individuals who typically use mobile devices or online web tools to initiate payments, we’ll see additional fields and or reformatted fields that they will simply have to adapt to. But it’s relatively straightforward for them.

“The reason why it’s a bit more of a challenge for businesses is that most of the time these companies are generating their payments from an upstream system.

“It’s not as if they’re just typing it in fresh where you just fill out the fields as they come along. Typically, you’re loading up a file of some sort from your ERP system and that ERP system also has to be updated. It’s important for the bank to be able to handle this, and ERP vendors will need to be ISO compliant too.”

The Fintech Magazine Will having these standards and regulations to adhere to, push people to constantly up their game?

Greg Murray “I’ve been on several forums related to ISO, and that’s a very good question. I think at the bottom line, ISO keeps us on our toes. As much as there’s a lot of work to do, it is also an indication that we are evolving to improve the way we serve our clients.

“ISO keeps us on our toes… it’s an indication that we are evolving to improve the way we serve our clients”

“When Swift came on the scene in the mid-70s and introduced the concept of structure, we had a fair amount of work to transition from Telex to this modern way. Over time, Swift has become the dominant way in which banks communicate. We all depend on each other.

“It’s companies like Swift and the structure that they introduced that enables banks to be able to communicate effectively. That progression helps us get excited about this, even though it is a lot of work. We know it’s ultimately going to improve things.”

The Fintech Magazine What are some of the challenges that banks face around cross-border payments and domestic transactions currently?

Greg Murray “Probably the biggest challenge is fraud. And most of that fraud comes from business email compromise, which won’t be solved by ISO 20022. But by introducing structured data, we’ll have more interpretability in the fight against fraud, and the ability to render better decisions.”

“Internationally, payments have a reputation for being slow. And that’s one of the reasons why a lot of fintechs have become very successful in this arena because they’ve created a more straightforward or simple way of doing business.

“But settling and clearing payments is still done through a bank or clearing system that the bank belongs to. So delays can be caused by either confusing information or information that isn’t structured sufficiently to render a well-informed decision.”

The Fintech Magazine Do you agree that when it comes to payments, if you’re operating 99.99 per cent correctly, you’re failing? It needs to be 100 per cent?

Greg Murray “That’s absolutely true. In full disclosure, I remember being somewhat reticent in the early days of ISO. The benefits weren’t entirely clear. But we’ve all come around, through industry forums, working with regulators and clearing systems to understand that it will ultimately result in a better experience for ourselves, and our clients. It’s an investment in the future.”

The Fintech Magazine What is Santander’s role in this?

Greg Murray “I believe we have three roles as a bank. One is implementing the changes themselves and testing to make sure it works. The second would be educating our clients. Answering the questions, ‘What is ISO?’, ‘What does it ultimately mean?’ ‘What benefits will it eventually provide?’, ‘Why should they care?’

“We can’t tell our clients what to do, but we can certainly advise them on what they need to consider so that they have a better perspective. And then the third role is helping them transition. We have been very careful at Santander not to call it a migration because we’re not migrating clients per se. They’re still going to use the same systems that they use today, but there will be a transition to extended data and more structured data.

“Templates [for regular payments] will have to be edited and updated. So, we give them all the tools to help them through that transition.”

The Fintech Magazine You mentioned that you’re working with SWIFT in North America. Are banks talking to each other and sharing best practices?

Greg Murray “We compete with a lot of regional and global banks, but we also collaborate and share within the realm of what’s acceptable. So when it comes to an industry initiative like ISO, we do share lessons learned and we’ve had the benefit of good partnerships with a few other banks in the US. We’ve spoken with the clearing systems themselves to understand how they have gone about it

“One of the most valuable pieces of advice that we’ve received in these discussions has been the necessity for partner bank testing. There’s a genuine vested interest from all parties to make sure that when we communicate, it’s seamless.

“Not just that it works here at Santander, but that the other bank is equally capable and ready to handle the format.”

The Fintech Magazine What will be the ultimate legacy of ISO 20022?

Greg Murray “I think the process of moving money around the world will be much faster and richer, if you will, meaning the information that is exchanged will be more robust. It should probably have been done earlier

“The value will be so evident that we can move money more quickly, and provide more information. I definitely believe it will also spur innovation because we won’t be bound by some of the restrictions we have today in carrying capacity.

This article was published in The Paytech Magazine Issue 15, Page 10-11