Standard Chartered launches whitepaper on ISO 20022 transition - Trade Treasury Payments

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Standard Chartered launches whitepaper on ISO 20022 transition

Standard Chartered, a bank, has today released a new whitepaper exploring the adoption of ISO 20022 XML to support corporates and financial institutions with their adoption of the new standard.

The 30-page report, released in collaboration with Zanders, a treasury consultancy, explores how ISO 20022 XML can address inefficiencies and complexities that corporates and financial institutions face when making cross-border transactions.

Mahesh Kini, Global Head of Cash Management at Standard Chartered, said, “As we continue to make steady progress with our migration to ISO 20022, we are pleased to present this whitepaper which offers insights on the potential to address the challenges that corporates and banks are facing in relation to account receivable reconciliation and cash allocation.”

The whitepaper, which can be downloaded in full from the Standard Chartered website, has several interesting insights and the rest of this article will explore our key takeaways. 

ISO 20022 adoption can create competitive advantages

While it may seem that a new standard, imposed by regulators with a quickly approaching November 2025 deadline for implementation is just an issue of regulatory compliance, that is hardly the case for ISO 20022, according to the Standard Chartered paper.

In contrast, the bank argues that those making the transition early (especially those who do so ahead of their peers) will benefit from richer structured payment data that will provide deeper insights to guide decision-making.

Kani said, “The migration to ISO 20022 is critical for us at Standard Chartered as it creates an innovation ecosystem that enables us to swiftly respond to our clients’ rapidly expectations and behaviours.”

With this increased granularity in payment data, corporations and financial institutions will be better able to respond proactively to client demands, differentiating them from the sea of competitors that aren’t yet able to support these data-driven demands to the same degree. 

Internally, implementing ISO 20022 will also improve many processes, like reconciliation, since the need for manual intervention will be drastically reduced, and with it, the likelihood of human error.

Structured payment data will make cash management more predictive

Another benefit of the new payment standard, according to the whitepaper, is that the enriched transaction data will boost the visibility into cash flows allowing for the type of real-time insights that are expected to increase the accuracy of liquidity forecasting. 

For corporates, this will mean better predictive cash management strategies which, if used effectively, should help with optimising working capital which could help to reduce the firm’s reliance on costly short-term financing. 

The longer-term impacts, however, are where the true benefits come in. As artificial intelligence and machine learning algorithms gain access to the enhanced data flows, they will be able to provide supercharged insights. Perhaps even those that human analysts would not be capable of procuring. Given the rapid advancements in AI, these benefits may not be that far-flung.

ISO 20022 can enhance interoperability

ISO 20022 is a payment data standard. Once everyone starts using this same standard, it will become exponentially easier for everyone, regardless of the system they use or the nuances of the data store, to work together. From a purely data-use standpoint, a more standardised world is a more interoperable world is a better world.

Kani said, “ISO 20022 provides a data-rich foundation that reduces payments friction and enhances the interoperability of systems for seamless cross-border transactions.”

This will also have ripple effects on making international finance more accessible to all firms. The added efforts and costs of transcribing data from one format to another add costs to businesses and institutions trying to operate in different data jurisdictions. For those who may already be operating on razor-thin margins, these costs could be the difference between trading abroad and not. 

It can also mean the difference for some banks between choosing to serve clients looking to go to a particular market or not. Ultimately, however, a more standardised data world for trade is one way to increase the free flow of goods internationally.

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The Standard Chartered whitepaper, ‘Frictionless reconciliation and allocation of cash: Can the adoption of ISO 20022 XML turn this dream into reality?’, gives decision-makers navigating the adoption of ISO 20022 a fresh take on the transition and can serve as a guide to others following path.