• Modernising Market Infrastructure

March 2019

Fuelled by a cultural shift towards digitisation, the demand for a faster, more efficient payments service has encouraged the banking industry to pursue the next generation of market infrastructure

A challenging but necessary enterprise, the industry-wide effort to modernise payments market infrastructure is being spearheaded by the adoption of  ISO 20022 messaging standards. Heralding a period of rapid change, the migration will establish a common language for payments data globally – enabling better reconciliation, faster execution, and access to richer data.

In The Banker’s latest Viewpoint Series, Christian Westerhaus reminds us that the transition will not come without challenges: “while the major market infrastructures for payments in the UK, US and the euro zone will transition to ISO 20022 formats in the same vein, they will each follow different approaches and timelines. For example, the Eurosystem will go for a ‘big bang’ approach in November 2021, whereas the US will follow a phased approach – beginning in November 2020 and ending in 2023.”

To ensure industry adoption is harmonised, collaboration between market players will be key. “External co-operation between banks, as well as internal alignment – between operations, anti-financial crime functions and compliance functions – is necessary to ensure an interpretation of the standard is agreed upon when making payments across regions”, explains Westerhaus. This will ultimately contribute to a consistent payment ecosystem, once ISO 20022 is implemented.

Deutsche Bank is also working alongside clients – including corporates and financial institutions – to ensure the benefits of migration are fully realised. “We must convince end users of the strong business case of ISO 20022 adoption. The investment is more than a matter of compliance – migration will mean access to a better data structure, improved reconciliation and richer data for use with their commercial goals.”

While in the last few years innovations have seen much success in meeting end-user demand for better data structure, friction-free payments, and fully traceable payments, achieving a successful, industry-wide migration to ISO 20022 messaging standards will be a far greater upheaval – necessitating the preparation and cooperation of all market players. 

To read the article click here

To watch the video chapters click below

modernising-market-infrastructure-02Chapter 1

Adapting new market infrastructure with Christian Westerhaus, Head of Industry Engagement & Surveillance Solutions, Cash Management, Deutsche Bank

modernising-market-infrastructure-03Chapter 2

The appetite for ISO 20022 migration with Stephen Lindsay, Head of Standards, SWIFT

modernising-market-infrastructure-04Chapter 3

Creating the roadmap of modernisation with Marc Bayle, Director General Market Infrastructure and Payments, European Central Bank

modernising-market-infrastructure-05Chapter 4

Migrating from end to end with Boris Brunner, Head of Network and Partner Management, SIX

modernising-market-infrastructure-06Chapter 5

Collaborating for migration success with Christian Westerhaus, Head of Industry Engagement & Surveillance Solutions, Cash Management, Deutsche Bank