How is the world of

standards evolving?

Forum for Financial Standards

SKSF-SWIFT

Stephen Lindsay

7th November 2015

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Agenda

• Evolution?

• Some common threads…

• Examples

• Questions

Evolution: successful adaptation to a

changing environment

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Current and Future

Initiatives

Opportunities and

Challenges

Opportunities and Challenges

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Current and Future Initiatives

Opportunities and

Challenges

Opportunities

• Regulatory compliance

Challenges

• Fragmentation

• Co-existence

Current and Future Initiatives

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Current and Future Initiatives

Opportunities and

Challenges

• Market practice formalization

• ISO 20022

• SWIFT

• Predictable environment

• Working Group 5

• ‘Semantics’

• TSG

• Business Process

• Business Rules

• MT modernization

• LEI – public/private initiative

More information in chatroom

“ISO 20022 –

How can SWIFT help”

Initiatives v Opportunities and Challenges

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Initiatives

• Market practice formalization

• ISO 20022

• SWIFT

• Predictable

environments

• Working Group 5

• Semantics

• TSG

• Business Process

• Business Rules

• MT modernization

• LEI – public/private initiative

Opportunities

• Regulatory compliance

Challenges

• Fragmentation

• Co-existence

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Agenda

• Evolution?

• Some common threads…

• Examples

• Questions

Some common threads…

• Extending the scope of what we standardize, e.g.:

– Market practice (usage guidelines)

– Semantics (the meaning of the data we exchange)

– Reference data

• Increasing the formality of our deliverables – from documents to models

– Reduce ambiguity

– Enable automation and STP

• Involving different actors in our processes

– Users and other standards bodies (ISO 20022 v 1.5 openness)

– Regulators

– Market practice organizations and MIs

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Agenda

• Evolution?

• Some common threads…

• Examples

–MT modernization

–Market Practice: HVPS

– ISO 20022:2013

• Business Process

• Business Rules

–LEI organization

• Questions

Example: MT modernization

• FROM – Document as source

– Reference MT standard is document edited using word

processing tools

– Standards generates technical deliverables from

documentation

• TO – Model as source

– Reference MT standard is a model edited using custom editor

– Documentation is amongst many generated artefacts

• WHY

– Quality – consistency, rigour (e.g. check field is used and

described the same way everywhere)

– Platform to build new capabilities

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Formality

Example: Market Practice Formalization

• High Value Payment System (HVPS) guidelines

– Goal: to ensure that ISO 20022-based RTGS is implemented

in the same way everywhere (to the extent possible)

– Formulated in consultation with the industry

• PMPG, Target 2, EURO 1, CPA, …

– Include:

• Formal usage guidelines

• MT <–> MX translation rules

– Published on MyStandards

• Documentation (PDF, XLS)

• XSDs

– For SWIFTNet users, SWIFT will offer validation and MT/MX

translation services

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Scope

Formality

Actors

Example: Market Practice Formalization

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e.g. for RTGS we

restrict to one

transaction per

message

Scope

Formality

Actors

Example: TSG – completing the

ISO 20022:2013 specification

13

- Business processes of ISO 20022 standards modelled through BPMN

collaboration diagrams

- Formal codification of business rules

Formality

More information in chatroom

“How to model my own business

process based on

existing ISO 20022 business

processes”

Example: ISO 17442 / LEI

Public/Private initiative

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Established by G20 / FSB Role:

• Governance principles

• Oversee global system

• Protect public interest

Actors

Founded by FSB • Swiss Foundation / 16 board members

• Operation principally funded by pre-LOUs

• Role:

• Application of uniform standards

• Manage federation through LOUs

• Maintain central logical database

• Maintain high data quality

21 pre-LOUs • Issue LEIs (valid anywhere)

• Cost-recovery model

Conclusions

• Standards help the industry respond collectively to its collective

challenges

– Effectively

– Efficiently

• These challenges are mounting all the time…

– Compliance

– Competition and customer expectations

• As the challenges evolve, standards need to evolve too:

– Further (scope)

– Smarter (formality)

– More inclusive (different actors)

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Questions?

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Thank you