ISO 20022 has far-reaching consequences for a wide variety of financial institutions and organizations as it seeks to unify existing standards used across many financial services value chains. Organizations across the globe are now faced with the dilemma of migrating existing payment services from current or legacy standards to the more open ISO 20022 standard. In fact, according to a SWIFT ISO 20022 Migration Study, in the next four years ISO 20022 will support 79% of the volume of transactions worldwide, leading to a major overhaul of the interconnection of financial services systems.
The challenge, as it often is, is that migrating from existing systems to a new system has the potential to disrupt customer interactions. A change of this magnitude is significant and the last thing any organization can afford is to negatively impact the customer.
As organizations migrate over to the new standard, the following questions inevitably arise:
How can we minimize the impact of such migrations on customer interactions and business in general?
- An important part of any migration is transition monitoring. Transition monitoring helps monitor the transition of services or systems to ensure that everything continues to work as desired. It is especially important when we talk about financial message translation across the transaction path.
How can we ensure that during the transition, financial messages are not interpreted incorrectly – which could result in lost revenue or the creation of back doors for fraudulent operations?
- As many of us know, a transaction traverses many different systems and protocols while it makes its journey from sender, to receiver or acquirer, to issuer, and back. Solutions that are able to monitor transactions at the field or data element level, across many different financial message protocols in real-time are important to have in place during these transitions. Real-time transaction level monitoring solutions are key to not only pinpointing when and where issues are occurring, but through customizable alerts, they can also help IT operations teams resolve issues in a timely manner.
How can we pick up issues fast enough and resolve them before they become widespread?
- Having a single system of record, such as a real-time transaction monitoring solution, that audits the entire transaction journey can help organizations quickly identify incorrect response codes, misalignment of fields or even pick up back doors where fraud could possibly go unnoticed for quite some time.
Are there any benefits to such migrations and how can we take advantage of the change?
- Although it can initially be an arduous process to migrate over to a new standard, it can actually help provide better business intelligence as ISO 20022 carries a wealth of information that can be easily harnessed by any transaction level monitoring solution. A system that has the ability to decode and surface this information in real-time can provide organizations with insight into the pulse of their business, while simultaneously reducing risk.