Five-Minute Focus on ISO 20022

Transforming the Marketplace

Lisa Lansdowne-Higgins, RBC’s Senior Vice-President of Business Transformation & Deposits and a member of the SWIFT Board of Directors, shares her insights on the new ISO 20022 financial messaging standard, and how RBC will be working with clients and the industry to implement this new standard within Canada and globally.

How will RBC clients benefit from ISO 20022?

The ISO 20022 single, standardized messaging format for payments will provide higher quality data across the payments chain within Canada and globally. It’s a key component of Canada’s broader Payments Modernization initiative. The global messaging standard, to be incorporated into SWIFT’s new MX format, will reduce manual intervention and result in greater straight-through-processing, including the ability to automate payments and reconciliations, and drive more efficient AML processing. Inter-operability is also a key benefit, not only for payments but also in relation to securities, trade and foreign exchange. And the integration of ISO 20022 as a global standard is serving as an opportunity for RBC to rethink the payment experience—to expand and innovate on our client offering.

The global messaging standard will reduce manual intervention and result in greater straight-through-processing

What are some of the key implementation dates for ISO 20022 in Canada?

The Canadian payments modernization initiative, including ISO 20022, can best be described as a journey. The first release of Lynx, Canada’s new high-value payments system, went live in August 2021, including real-time gross settlement and an improved risk management model. Release two of Lynx will follow in late 2022, delivering end-to end support for the new ISO 20022 messaging standard. Also planned for launch in late 2022, the new Real-Time Rail will introduce real-time exchange, clearing and settlement of low-value payments in Canada based on the ISO 20022 requirements.

RBC will ensure a smooth transition for our clients as the world moves from the SWIFT MT messages to the ISO-compliant MX series for cross-border and correspondent banking. We will be fully compliant with the SWIFT ISO deadlines in the countries where we operate, starting with the ability to receive and receive/forward messages for cross-border payment transactions via the MX format by November 2022 and encompassing all cross-border payment traffic by November 2025.

How is RBC supporting clients in the transition to ISO 20022?

Consistent with other aspects of the Canadian payments modernization project, RBC’s objective is to make the move to ISO 20022 as frictionless as possible for our clients. Open communication is front and centre to our approach. We have involved clients in ideation sessions and participated in numerous industry forums as part of our campaign to re-imagine the future of payments and promote a high level of understanding of Canada’s payments modernization initiatives, including ISO. In addition, payments modernization is always an important part of the discussion during RBC’s regular meetings with our clients. We will continue this process of open client communication throughout the transition to ISO.

Open communication is front and centre to our approach

Can you share your final thoughts on ISO 20022?

I firmly believe that ISO 20022 will transform our market. This is a once-in-a-generation paradigm shift and, with that, comes tremendous opportunities. This next-generation solution is likely to be a game-changer for market participants in Canada and beyond.

 

You may also like