ISO 20022 Payment Integration for Real-time Payments

10 January 2023 | Rakesh Kukkamalla | Enterprise Architect & VP Professional Services, SEEBURGER

The Migration to ISO 20022 Enters the Home Stretch

With the migration to ISO 20022 entering the home stretch, there’s no better time to get up to speed on this important topic. Here’s everything you need to know about the migration and why it matters.

ISO 20022 is so much more than changing message formats. ISO 20022 real-time payments enable banks and their customers to derive the benefits of open banking for payments across the IT landscape. ISO 20022 contains more data that can be integrated to provide a better 360 view of customer journeys, for example from bank-to-bank.

If this valuable data is treated as such by integrating this information with other systems, this payment data can reduce risk and provide new revenue streams for banks. Integrating payments with KYC tools can reduce the risk of banking services exploitation and fraud, while supporting faster and even instant settlements and cash flow forecasting.

Systems and services can be integrated to render valuable insights into customer activities, which are able to be productized and commoditized.

What is open banking?

Simply put, it’s providing customers with access to their account information and payments services, often using APIs to integrate backend systems. In Europe, PSD2 defines rules for how to achieve this to involve 3rd parties, and done correctly, banks are attracting more corporate customers by driving value through digital banking for real-time access to payments information and other customer-centric data.

Payment API Services

Key to a strategy of open banking, API services are used to opening up siloed systems, enabling data once stuck within certain banking functions to be shared among all integrated systems. Utilizing distributed ledger technology, is one key area which integration technology can support to generate a fully integrated payment integration landscape. An integration approach integrates payment systems, anti-money laundering technology, OFAC, KYC, FINtechnologies, and more.

Real-time Payments

The allure of real-time payments means that ISO 20022 is generating more payments, meaning there is an increased volume of files needing to be handled.

At the same time, ISO files are composed of enriched data, which means the files themselves are also larger. Understanding the need to deal with larger transaction volumes and bigger files generates the need to ensure the technology is capable of handling this increased capacity. Simultaneously, to gain benefits from the enriched data, for example to adeptly understand customer activities and behaviors and reduce cash flow risks, payments must be integrated thoroughly in the banking landscape.

Whether looking for the benefits of conforming to PSD2 or other payment initiatives, or how to implement an ISO 20022 messaging migration for example in accordance with SWIFT CGI-MP, banks are looking to empower customers through open banking initiatives.

An ISO 20022 validator tool is a helpful piece of technology to ensure migration success. But fundamentally, driving value for end users, whether they are internal stakeholders in the form of corporate account managers or external stakeholders in the form of corporate customers, should be in the foreground of payments integration projects.

Everyday situations can be resolved faster, for example the enablement of critical incident oversight. The right integration can provide answers instantly to the right people at the right time, allowing for an overview of where a payment landed or is stuck, how to speed up bulk payments, or whether to de-bulk and reassign payments to different queues. Ultimately, payments integration should enable the settlement process to be sped up as well.

These are all strategic value drivers that provide tangible results for multiple stakeholder groups and concrete reasons to focus on the integration of the banking landscape in payments-related projects.

Read Full Article Here:  https://blog.seeburger.com/iso-20022-payment-integration-for-real-time-payments/