ISO 20022: Facilitating Transparency, Efficiency, and Deterrence of Fraud | Part 4 | Bottomline

As the global payments landscape undergoes the shift to ISO 20022, this digital transformation is a significant inflection point for the financial system and the payment ecosystem. As payment stakeholders move from basic connectivity to avoid disruption, to actually being able to leverage ISO 20022’s utility to solve long-standing pain points, we will unlock true value.

Ultimately, similar to the telephone being seen as a phone book until the network of telephone users were linked together, the technology behind ISO 20022 will generate new opportunities only when ISO 20022 is used widely and interoperability is achieved across multiple payments ecosystems.

This position is supported by the findings from the most recent industry report, providing valuable insight into the increased transparency, improved data management, and reduced manual workload—all of which are essential to reducing the costs and achieving operational efficiency. However, enabling advanced fraud analytics in payments is possibly the most advantageous benefit for banks and payment service providers, which can lead to reducing the rate of false positives in sanctions screening, allowing streamlined compliance.

The realization that there will be a deadline for eligibility to participate in the ISO 20022 coexistence period typically occurs only when there is no turning back. As any organization is only designed to be as effective and efficient as its current capabilities allow, the shift to ISO 20022 will apply pressure on banks to comply, especially since only half of SWIFT members are compliant with the CBPR+ standards. In this regard, in addition to addressing compliance alone, there are substantial opportunities to create new value related to cross-border payments to address G20 priorities for the financial system relating to data loss in cross-border transfers; trapped liquidity that lives in multi currency accounts; and a lack of transparency to detect infractions.

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