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ISO 20022: If Itís Not Broke, Fix It?
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Larry_Buettner
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Larry_Buettner,
User Rank: Apprentice
8/26/2014 | 11:57:59 AM
ISO20022 Adoption
The migration to any new standard takes time. The EU migration under the SEPA initiative is one example. It has been almost ten years since the original mandates were published and full compliance was only recently achieved. In the U.S., SEPA will begin to have a direct impact on the adoption of the new ISO remittance standard. Non-European countries will need to comply with the SEPA standards by October 2016. This means U.S. banks and companies will need to send their payments in the new standard by that time. Given the nature of global trade, this will provide impetus for adoption of the standard for both international payments and domestic payments, as well. Companies will not want to support two standards, if they can avoid it.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
8/26/2014 | 6:32:39 AM
Re: Encouraging adoption?
It seems like adoption will take a long time, with a lot of arm twisting. Since the current system (and older 'standards') work, how will all of the players in the payments chain be compelled to move to a new standard? I know there is regulation, but its a big investment for all parties involved.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
8/25/2014 | 4:10:46 PM
Re: Encouraging adoption?
Overall it's nice to see the Fed is so focused on payments. On the B2B side payments are still in the Dark Ages, and we lag behind other countries as well on the consumer side. Hopefully they prove you right Lawrence and find effective ways to push an innovation agenda on both of those sides.
Larry_Buettner
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Larry_Buettner,
User Rank: Apprentice
8/25/2014 | 3:01:37 PM
ISO 20022 Adoption
 

A standard by itself will not spur adoption. The Federal Reserve has developed a new payments vision. The use of the new ISO 20022 standard is one piece of their vision. Unfortunately, older standards such as BAI2 are well entrenched. With little extra funding, trading partners are not going to change standards, especially when they work well. The FED's new vision, which incorporates a number of other features, such as a payments directory, etc., will provide the impetus for change to a new standard.  
Larry_Buettner
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Larry_Buettner,
User Rank: Apprentice
8/25/2014 | 3:00:21 PM
Re: Encouraging adoption?
 

A standard by itself will not spur adoption. The Federal Reserve has developed a new payments vision. The use of the new ISO 20022 standard is one piece of their vision. Unfortunately, older standards such as BAI2 are well entrenched. With little extra funding, trading partners are not going to change standards, especially when they work well. The FED's new vision, which incorporates a number of other features, such as a payments directory, etc., will provide the impetus for change to a new standard.  
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
7/14/2014 | 3:48:26 PM
Re: Encouraging adoption?
Another example of how corporate banking and payments is starting to catch up to some of the trends that have been rocking the retail consumer side for a while now. Hopefully the new standard will accelerate that trend on the B2B side.
KBurger
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KBurger,
User Rank: Author
7/14/2014 | 2:53:10 PM
Encouraging adoption?
Is there a timetable or any compliance deadlines for ISO 20022? If this is something that only works if widely (universally?) adopted, then I would think that the parties behind it would want to a) create a sense of urgency with an aggressive, but manageable, deadline, and b) create some incentives for banks and their partners beyond "this is a better way to do it." Thanks for the update on this initiative, Lawrence.


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