In today's global economy, real time payments, complete transparency and risk management are the keys to a successful payments business. Over the last few years, there have been a number of initiatives and organisations that have strived to achieve a level of standardisation for payments messaging. The decision by major central banks and SWIFT to migrate to ISO 20022 from August 2022 on an opt-in basis, and November 2022 for general availability signifies the biggest breakthrough to date. 

The UK payments industry is moving to ISO 20022, the emerging global standard for payments messaging. The Bank of England has joined the movement and published its migration approach of non-payment messages to the ISO 20022 messaging standard for CHAPS Direct Participants. This change includes the sterling high value payment system CHAPS, which will migrate to ISO 20022 messaging in April 2023.

Thinking of messaging systems as the pillars of bank’s payment processes, it goes without saying that harmonised standards and rules for the exchange of payment messages and data are of critical importance. Better data in payments promises to deliver significant long-term benefits for the economy. It speeds up cashflow, with improved liquidity enabling businesses to grow faster. To adapt to the new messaging standard and accompanying data requirements, organisations are right to seriously consider investing in processes that make it as easy as possible to adapt. But how might organisations make this transition?

Take HSBC for example, one of the world's largest banking and financial services organisations, serving more than 40 million customers across the globe. The bank is currently focused on streamlining its operations to align with SWIFT’s ISO 20022 programme and to roll out real-time payment schemes to all of its major markets.

Within the bank, payment services is a critical global function providing payment processing, investigations, sanction screening, and messaging services to customers. All of this functionality is underpinned by HSBC’s core data services, enabling business insights, payment status tracking, and archival solutions.

The company’s Global Payment Investigations solution is built on a framework that enables efficient exception processing, messaging and interoperability support and automated case creation and straight-through processing with over 2,000 users. At this scale, one of the biggest challenges HSBC’s IT organisation faces is how to exploit technology while partnering with the business to deliver timely, tangible value to clients through innovation, transformation, and simplification.

HSBC began this transformation by first implementing a major upgrade of its platform to revolutionise the total experience for customers, employees, and developers. This enabled HSBC to prepare themselves to take full advantage of future innovations. The bank then partnered with a business value services team to run an operational walkthrough of its investigation processes. Through this, the team identified operational gaps and brainstormed on possible solutions. Looking at a process from all angles of the people, process and technology really helps identify the best outcomes.

In addition, HSBC built a centre of excellence and developed key tenets such as start simple but improve continuously, ultimately, leading into total business transformation. By relying on an automated payment exceptions through an omni-channel customer experience, HSBC is able to resolve all payment inquiries quickly, efficiently, and with a single point of contact.

The ISO 20022 migration will take years to fully implement and will not be without its challenges but nonetheless, the banks that are willing to invest in the right technology and take the right steps to implementation will be at the forefront of converting a messaging mandate to a competitive advantage, allowing for a improved customer experience.