Clean data is key to instant payments, real-time settlement, open banking initiatives and blockchain technology — but such details are often lost or garbled when sent between parties. To better preserve this data, the U.S. financial services industry is turning to the ISO 20022 messaging standard.
Essentially, ISO 20022 allows banks and corporations to handle cross-border payments that can carry extensive information in standardized data fields, taking much of the mystery out of each transaction and allowing banks to streamline other operations because of this added clarity.
With approximately 70 countries using the ISO format, the number of data fields used generally depends on the country. Overall, there are more than 1,000 data fields available as part of the standard.
“Historically, it used to be that two different technologies had to merge with one another,” said Cliff Gray, senior associate with The Strawhecker Group. “It would be using EDI (Electronic Data Interchange) format and then baking in some payments stuff into that EDI framework, or if you did payments already, you would bring in some EDI for the extra data and information.”