ARTIFICIAL INTELLIGENCE: ISO 20022
Beyond The enriched data that will flow from compulsory adoption of the new messaging standard will be a ‘protein boost’ for AI in the field of transaction analytics and forecasting. Victoria Harverson from SmartStream believes banks need to seize the opportunity SmartStream’s trademarked approach to solving operational processing challenges – known as Transaction Lifecycle Management (TLM) – had something of a head start on what’s been described by one leading bank as ‘a watershed moment’ for the payments industry. It’s been working in the ISO 20022 environment since the payment messaging standard first emerged in 2004. However, as compliance with ISO 20022 becomes mandatory over the next few years for any institution transacting through EURO1/ STEP1 and TARGET in Europe, processing SWIFT messages, or using Singapore’s MEPS+, Hong Kong’s CHATS and Australia’s RBA-RITS clearing, the heat is on to bring every one of its clients up to speed. The logic and aspiration behind ISO 20022 is irrefutable: it’s designed to enhance the speed and efficiency of global payments by enforcing universal uniformity, which will demand a new granularity of information around every www.fintechf.com
20022
financial message, spanning not just cross-border retail payments but also trade, securities and foreign exchange. Importantly, for a company that has made a strategic shift to harnessing artificial intelligence, ISO 20022 represents a protein-boost for AI. The rich information attached to every transaction will enhance analytics, improve reconciliation rates and – the end game – improve the experience for the customer. But migrating to the new standard is not simple if your payments engine is built on legacy infrastructure. To support clients, SmartStream expanded its TLM Corporate Actions solution in 2019, to include ISO 20022 message processing and interoperability support. Its new iteration of its SmartStream AIR Cloud-native data validation software solution, and the new TLM Aurora Universal Data Control platform, both powered by machine learning and AI, are bringing the latest technologies to help companies migrate to and maximise the opportunities that the new standard presents. Under ISO 20022, every character within a financial message must be 100 per cent correct and aligned with the specifications, and the format is validated at several points along the communication chain from the sending and receiving ends. A single missing colon could result in a multi-million currency transfer being rejected or delayed for days. But, once compulsory, ISO 20022 could revolutionise the increasingly-borderless payments marketplace, picking up where
transparency-boosting messaging systems like SWIFT gpi have left off, by ensuring not just increased payments visibility, but also real-time speed and glitchless delivery. SmartStream’s considerable technical fire power helps organisations manage their data for in-time compliance, and ensure exceptions are identified early to minimise disruption. Its services include data transformation, regulatory alignment, innovation labs, managed services, Cloud environments and solution delivery. Global head of business development, Victoria Harverson, believes organisations must embrace technologies like AI, to make the most ISO 20022. Too many, she says, overlook AI’s power to transform their behind-the-scenes activity. Banks need to decide how they will manage their – often outmoded – core architecture as they adapt, to avoid their backends limiting their capability for front-end innovation. To help them, in March, SmartStream announced it had re-engineered its TLM Aurora software-as-a-service solution to help banks upgrade their core systems to comply with ISO 20022’s more complex data requirements. TLM Aurora Universal Data Control allows for basic-to-complex reconciliations data matching by enabling AI, machine learning and Cloud-native technology. Issue 21 | TheFintechMagazine
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