Standardtime

With a domestic payment, you are in a single jurisdiction with one regulator. Once you add a different country, and potentially two countries in the value chain, it gets more complex. And we cannot solve that complexity through technology alone. It is also about collaboration with regulators, not only to improve industry technology, but also to improve the respective governance frameworks around cross-border payments.

So it’s a combination. Opportunities are there to bring better services towards our clients, which will bring the feeling of a cross-border payment close to the level of a domestic one, but there are still differences that need to be solved.

TPM: What does global adoption of the standard mean for the industry, and what is it going to mean for Deutsche Bank?

MR: That standard is long overdue. We have been working as an industry for more than 25 years with legacy formats in the cross-border payments space that were no longer fit for purpose. There was sanctions screening. We have a lot of things that the bank can do better, when the data quality that we get from our clients is better. text [the old MT format for payment messaging], but it works much better with structured data. And that is the piece where we kicked off the process of educating the people around what ISO 20022 is, what the advantages are, but also how it impacts their working lives. Because, if somebody has worked within cash operations for 25 years with a legacy format, and now needs to go, from one day to the next, into ISO, it is a big change. So, education is key, information sharing is key, and also including the whole value chain inside Deutsche Bank, to see how this new format can bring value-added services internally, but also for our clients. not enough space to enter the required data in the way that is demanded by our clients, but also demanded by our regulators. You didn’t even have the space to put ultimate ordering or ultimate beneficiary client.

So, indirectly, clients are benefitting from a more seamless and improved payment experience. But also there is an opportunity to create better insights into their payment behaviour by using structured data. So there are services that can be built on top of the ISO 20022 migration. But it will take some time.

A lot of financial institutions and market infrastructures have been working on ISO 20022 for the last three to four years, and some of them saw the March 2023 [TARGET2 transition and the start of co-existence of the old MT and new MX messages on the Swift network] as the hard deadline. We didn’t; it is just the first step of a much longer journey, because, until 2025 [under the Swift migration], it is still optional for certain banks to move to ISO 20022. As of November 2025, it will be mandatory. Then, we will definitely see a huge uptick in the advantages.

TPM: Has that prompted Deutsche Bank to have a conversation with your customers, and what is the likely impact on the roles of their employees and your own?

TPM: How do you see the standard changing the payments industry, going forward, and how is it going to change Deutsche Bank?

MR: There are multiple payment initiatives going on across the globe. You can hardly wake up without reading that some blockchain technology will make cross-border payments even better.

Whole business models have changed, with, for example, the advent of payment and collection factories. With that ,there was a need to change the rails, something the industry, Swift, central banks and the public sector have embraced.

Deutsche Bank customers indirectly benefit if our own internal processes get better. Because what does ISO 20022 actually bring? It is a combination of more data and structured data. For example, it can achieve better compliance and fewer false positives regarding

MR: We cannot invent data. We get the data from our clients. So, clients absolutely need to be on board, and especially the big-volume clients for cross-border payments, because they will need to adapt their static data on their own system to be able to send us the structured information we require to be able to benefit from all the advantages. So it’s education, and also a bilateral collaboration between the banks and their respective clients.

With respect to your second point, ISO 20022 allows you to automate many more processes. For example, we already have a lot of robotic process automation (RPA) in the industry. That works on free

ISO 20022 <KEY MIGRATION DATES>

We, of course, look into these initiatives but we try very much to combine our thought leadership and our experience with the new technology. Because you cannot solve all the problems simply by technology. You need governance, you need processes; you also need to know what the problem is, what it is that the client wants. Sometimes I have the feeling somebody has a solution, but they don’t have the problem.

So, at Deutsche Bank, we watch the market and, where we believe it makes sense for us and our clients, we work on initiatives that will try to improve the cross-border payments experience in the future without disrupting the relationship with our clients.

We will look across the ISO 20022 journey, to see what kind of client demands arise that we are not aware of today, embrace those, and collaborate or co-create solutions with them.

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