In our recent ISO 20022 article, 'The Golden Standard', we provided an industry oversight into some of the potential challenges ahead with the ISO 20022. In Part 2, we are outlining some of the Market Infrastructure timelines and their respective requirements, as well as how this might affect data elements.
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In a recent ISO 20022 article, 'The Golden Standard', we provided an industry oversight into some of the potential challenges ahead with the ISO 20022. In Part 2, we are outlining some of the Market Infrastructure timelines and their respective requirements, as well as how this might affect data elements.
March 2023 – SWIFT CBPR+ & T2 go-live
With the go live of SWIFT CBPR+ & T2, there were 3 main data elements affected; ISO BTC External Code Sets, Purpose Codes, and Structured Address. These data elements should be adopted for two main reasons, including; i) Town & Country are the minimum data elements required in a structured address, but it is recommended to try and improve address breakdown to allow further granularity, and, ii) Purpose codes should be reviewed and usage either from the ISO 20022 standard or bilateral usage agreed between participants so that they have common meaning and lead to less back office operational referral.
Potential use cases
June 2023 - Bank of England CHAPS ISO 20022 go-live
With CHAPS ISO 20022 go-live, the Bank of England recommends Direct Participants use of the following fields; LEI, Structured Remittance Information, Purpose Codes, and Structured Address. Direct Participants may ask indirect participants to use these elements where possible.
But why should these data elements be adopted? The Bank of England will mandate use of these elements between Direct Participant Financial Institutions from 2024. Indirect Participants may be asked to supply the same data by this date. In addition, the LEI will give a better identification on the actors within a payment chain. The Bank of England is looking at this element long term to be adopted more widely and is influencing G20 and other central banks. The LEI at some point is likely to be adopted more widely in the future and may drive uses in other open banking opportunities.
Another reason is that Structured Remittance is likely to be used for better reconciliation internally for settlement with the Bank of England. It is also encouraging wider use for RTGS and domestically under the National Payments Architecture (NPA) plan. Structured Address will be encouraged to get better location granularity. Finally, Purpose Codes are required to identify certain transactions, mainly for payment transactions relating to property initially (see Bank of England website for further details) and are likely to be more widely adopted in the future, not just between FIs. The Bank of England is also likely to encourage further use of purpose codes to help identify transactions, especially if it helps identify regulatory reporting figures.
Possible use cases
April 2024 - US CHIPS go live
The main data elements that will be effected by US CHIPS go live in April 2024 is the use of ISO Codes, where mandatory. It is recommended that the data elements should be adopted as widely as possible, as CHIPS is not specifically mandating use of specific structured element other than those already expected. However, The Clearing House which operates CHIPS and the US RTP scheme does have a tripartite agreement to develop real time cross border payments with SWIFT and EBA. There is likely to be aligned mandated uses in due course. In addition, the adoption of common ISO 20022 elements already used or to be used with other market infrastructures will aid the usage of this payment rail.
Possible uses cases
November 2024 - Bank of England Mandates usage of Structured elements
This deadline is likely to affect data elements such as; LEI, Structured Remittance Information, Purpose Code, and Structured Address. These elements should be adopted as they are now mandated for use by the Bank of England.
November 2024 - Australia mandates full use of ISO
With regards to data elements affected, whilst there is no specific advice at the moment, regulatory authorities are looking at; Purpose Codes, LEI, and other structured data. These elements should be adopted as recurring existing optional elements in 2023 will look to be mandated by other market infrastructures more widely. On top of this, it is recommended that work started in 2023 should be continued and built on.
March 2025 - US FED goes live with ISO 20022 in ‘Big Bang’ approach
Whilst there is no clear data elements required at this stage, the only recommendations involve existing requirements in CBPR+ and local existing market infrastructure clearing requirements. FW codes are likely to be moved to different elements with new IDs required. The new data elements will be required as it is likely that the US FED will start to adopt other popular requirements that have already been adopted by other infrastructures by default but may not mandate usage.
Beyond November 2025 - Data elements affected
Possible use cases
How Delta Capita can help
Delta Capita’s unique market position allows us to bring insight, skills and capacity to help solve your pain points as the payments market evolves. This is all supported by our experience working with financial market infrastructures, sell and buy side, and technology companies - and across our domains of expertise.Our vast experience and coverage mean we can craft bespoke solutions to help you maximise commercial benefits from the ongoing tumultuous changes in the banking industry.
To find out more and speak to one of our experts, contact us today.