The Bank for International Settlements’ (BIS) Committee on Payments and Market Infrastructures (CPMI) has published harmonised ISO 20022 data requirements for cross border payments. Officials from AusPayNet stated that the global adoption of the CPMI ISO 200222 data requirements would reduce inefficiencies along the cross-border payment chain caused by misaligned message flows, inconsistent data usage and implementation, as well as the adoption of the ISO 20022 messaging standard.
Moreover, the facilitation of straight-through-processing allows the implementation of the CPMI ISO 20022 data requirements to also improve the management of cross-border payment messages, helping the G20 achieve its target.
As stated in the press release, AusPayNet aims to align its ISO 20022 message-usage guidelines with the CPMI ISO 20022 data requirements before the end of 2027, the CPMI timeline for global adoption. AusPayNet supports other market infrastructures and payment service providers contributing to cross-border payments to align their guidelines with the CPMI ISO 20022 data requirements to comprehend the benefits of harmonisation for end-users globally.
During March 2023, approximately 11,000 institutions in over 200 countries and territories, as well as their vendors and technology teams, and other domestic payment platforms, introduced the ISO 20022 for payments and related messaging. In Australia, 50 domestic and international financial institutions migrated key pillars of the Australian payments system to the message format, this coming after four years of collaboration between regulators and participants from the industry.
The main objective of the worldwide implementation of ISO 20022 is interoperability between payment systems and networks, as overheads associated with translation and conversion can be removed. Moreover, it allows payments to better circulate between payment networks, increasing the reach and reducing fragmentation, as well as allowing new payment technologies in development to efficiently connect to the rest of the system.
In Australia, the implementation of ISO 20022 can provide significant improvements to process automation, interoperability, and corporate customer experience. Other global benefits include more structured remittance information and identification of parties in the payment chain, as well as improved Know Your Customer (KYC), Anti-Money Laundering (AML), and counter-terrorism financing efforts.
Furthermore, cross-border transactions between financial institutions can become faster, less costly, and more transparent, with the enriched data in ISO 20022 enabling financial institutions to better support their customers through value-added services.
