STANDARDISATION

CONVERGENCE:
A CHINESE PUZZLE
 HOW TO COMBINE IN THE SHORT,
MEDIUM and LONG TERM?

– Concrete and pragmatic solutions

– Convergence within the financial domain

– Harmonisation between finance and other domains

 How to combine all pieces?

What is the right

way?
Who will get a
rabbit out of his
hat?
 REMIND YOU THREE
YEARS AGO
 For banks:
– SWIFT was standardising bank to bank
– TBG 5 was standardising bank to client
– ISO TC 68 Finance was focusing on limited areas

– Most of the representatives in one of these

organisations didn't even know they had colleagues
representing their bank in other organisations
 For clients:
– Treasurers didn't know they had company experts in
UN/CEFACT and vice versa
 SINCE THEN

 ADOPTION of a COMMON METHODOLOGY

– Defined by UN/CEFACT & OASIS,
– Standardised as ISO 15000 in ISO TC154
– But standardised also in parallel
 in ISO TC68 Finance,
 firstly for securities,

 called ISO 15022 version 2, changed recently to ISO 20022

 slightly different from ISO 15000

 Reminder on standardisation
TARGET for FINANCE
 To enable communication interoperability
between:
– financial institutions,
– their market infrastructures and
– their end-user communities
 But, most of end-user companies are not members
of the financial sphere =>
FINANCE IS NOT AN
ISOLATED ISLAND
 Facing the risk of multiple
standards

 Within Finance, with so many (>40)

standardisation organisations
 Outside Finance, in the cross-domain environment
 An increasing need of cross-domain
interoperability because of:
– the desire for end to end STP
– more and more actors involved in one operation
 Examples of cross-domain
projects between finance and
other UN/CEFACT

 E-Invoice
 Remittance Advice
 Electronic Tendering
 Accounting Token

Projects not directly financial, but often with links

 WHICH GIVES THE
FOLLOWING SITUATION
 Solutions developed by SWIFT: available for
clients
 A unique methodology for finance, presently
slightly different from UN/CEFACT
 A new ongoing organisation for financial
standardisation
 A risk of competitive standards
 A clear willing for cross-domain harmonisation,
especially with UN/CEFACT, which requires time
and agreements
 AVAILABLE
SOLUTIONS IN
SWIFT

Lien hypertexte
 ONGOING ACTIONS

 Finance has engaged two complementary

actions:

– CONVERGENCE within the financial sphere

– HARMONISATION essentially with UN/CEFACT

 CONVERGENCE
 ISO 20022, also called UNIFI, approved for all
finance
– Registration Management Group (RMG) created in
January
– Standards Evaluation Groups (SEGs) to be created
 Payments, Securities: immediately
 Treasury, Trade Finance

 ISO TC68 becoming the hub for finance

– 40 organisations to convince
– New organisation to be finalised and efficient
 HARMONISATION with
UN/CEFACT
 Already started or agreed:
– Agreement signed in June 2004: TC68, TBG5 & SWIFT
– Ongoing convergence work plan for Core Components
 Gap analysis, investigates changes, submit recommendations,…
– June's co-operation agreement confirmed by RMG
– Immediate submission of a pilot project approved by RMG
 Still to be done:
– Research of compatibility between workflows
– Organisation of registries between ISO 20022 and UN/CEFACT
 WHICH INTEREST
for UN/CEFACT?
 Co-operate as much as possible with domains
standardising more outside than inside
UN/CEFACT (Finance, Transportation, Customs,
Insurance, …) to facilitate cross-domain
exchanges. Not specifically for Finance.
 Pull other organisations with same methodology
 Lead standardisation process ...
– Uniqueness of the methodology
– Uniqueness of a logical repository
 … without appearing as dictatorial
 TBG 5 ROLE: Interface
TC68 UN/CEFACT
Finance All industries
UNIFI ebXML Registry / Repository
ISO 20022

Core
Data Dictionary
Components
TBG5

Business
Process Common
ISO Business
Catalogue
Processes

UN
 Bi-directional Roles for TBG5
 From financial sphere to inter-sectorial:
Guarantee financial standards are recognised and unique
– Be the supporting/forwarding arm for all sub-domains
– Support forum harmonisation and validation
– Market financial solutions within TBG
– Market messages to clients
 From UN/CEFACT to financial sphere:
– Bring expertise in "ebXML" and methods
– Be a pool for resources in customer to bank &
payments
– Support evolution of forum workflow to facilitate the
workflow with external organisations (ISO 20022, but
also GS1 (EAN), WCO, …)
 Finally? Which
organisation is doing what?
 There are various types of standardisation
organisations
 None of them will disappear quickly
 It is then required to adapt roles to the new
situation
 Based on the acceptance of:
– unique methodology
– unique registry
– (partial lost of independence)
 Roles of Organisations
 World-wide & cross-domain Organisations : ISO,
UN/CEFACT
– Definition of methods
– Responsible for transversal coherence (registry)
 World-wide domain Organisations : SWIFT
– A standardisation body for banks
– Operator: RA + Modelling
 Business Requirements: IST, TWIST, RosettaNet,
FpML, ...
 Regional Coherence:
– Cross-sectorial: CEN, eBES, ANSI,
– Sectorial : EPC, ECBS
 FINALLY, WHY THIS
PRESENTATION?
 To show that there are solutions available
 To explain the approach followed in the Financial
Sphere to minimise divergences in standards
– because Finance is surely not alone to face similar
issues
– and because it could require some flexibility in
UN/CEFACT rules
 Because some issues require UN/CEFACT
participation
 UN/CEFACT PARTICIPATION
 Reception of the first submitted project, Payment
Initiation:
– Follow up the normal approval workflow,
– but with an open mind to detect potential
improvement(s) for this workflow
 Participate to the convergence work plan : TBG 5 &
17 + ICG (federated registry) + to be defined.
 Find consensus solutions for cross domain projects
 Agree on a common message with clients: no
purist quarrels!
 WHICH PRESENTATION
FOR CLIENTS?
 Proprietary solutions are already available
 Standardisation under ISO 20022 is ongoing
 Standardisation in UN/CEFACT is ongoing
 Some user organisations are supporting Payment
Initiation as developed by SWIFT
 But ISO 20022 is not aligned on ISO TC154
 A convergence work plan is on-going
 Users can -depending on the market they are in- in
cooperation with their customers assess the situation and
start using solutions available with the potential risk of
having to migrate once the standardisation &
convergence activities are finalised
 Pending Questions

 Interoperable or unique standards?

 A unique federated repository? ISO 20022
being one decentralised part?
 Which solution for client - bank secured
exchanges in parallel with MA CUGs? AS2?
 ????