Why is ISO 20022 integration hard?

Why is ISO 20022 integration hard?

ISO 20022 is a global standard used to facilitate electronic data interchange between financial institutions.

Benefits

It provides many benefits not limited to

  • Flexibility - adapt to changes, technology changes and innovation
  • Harmonisation - across payment systems round the world
  • Compliance and regulation - structured data makes it easier to detect fraud and prevent financial crime
  • Efficient routing and increased resilience
  • Increased straight-through processing rates
  • Richer data - for improved decision making

ISO20022 Integration Challenges

Benefits come at a cost

Complex Schemas

  • The need to be a global standard means message schemas are big, complex and deeply nested. The ISO 20022 message are designed to handle all kinds of payment scenarios, no matter how esoteric.
  • Lets look at a typical message. The FinancialInstitutionCreditTransfer (pacs.009.001.06) message is sent by a debtor financial institution to a creditor financial institution, directly or through other agents and/or a payment clearing and settlement system.
  • FinancialInstitutionCreditTransfer (pacs.009.001.06) Hover on elements for documentation
  • Names like FICdtTrf are not exactly memorable. ISO has tried to find a middle ground between cryptic codes such as F54, and full names such as FIToFICustomerCreditTransfer, but they are hard to remember and get exactly right each time.
  • One has to use full path such as Document.FIToFICstmrdtTrf.GrpHdr.Sttlmlnf.lnstgRmbrsmntAgt.Finlnstnld.CIrSystbld.CIrSysId.Cd to access any element. There are no shortcuts.

Deeply nested structures

Multiple message types and variants

  • There are many message types, their local variants and versions each with its own schema. At the last count there are 693 on the ISO 20022 website.
  • If a process that needs to access the Sending institutions SWIFT code (BICFI). A business analyst has to go through multiple message definition reports and specify something similar to
  • This is time consuming and is repeated many times. The application logic also needs to implement the specific logic.

Multiple message schemas

### XML and XML Tooling

  • XML is primarily designed for information interchange (messages) and is indispensible for implementing a global standard. Since XML is primarily a syntax for messages, it is hard to query and manipulate efficiently.
  • The world has moved on from XML to other lightweight weight formats such as JSON. As a result, any innovation and tooling support improvements for XML have come to a standstill. Many XML open source projects are stuck in a limbo.

xmlvsjson

  • Most existing methods to manipulate XML are not type safe and you need to ensure the XML you create is compliant with the ISO 20022 schema. ### ISO schema generation standard ISO 20022-4:2013
  • The schema generation standard adopted by ISO has some quirks that makes ISO 20022 message manipulation even harder
  • Schemas are not documented
  • Each message has a separate namespace making translations and conversions between versions harder
  • Complex types in schemas utilise tags which require items in a specific order instead of
  • Currency types use XML attributes for currency code making access and manipulation unnecessarily difficult.

### PayToolz We at paytools