ISO 20022 Is a Compliance Game-Changer

ISO 20022 is a multi-part international standard prepared by ISO Technical Committee TC68 Financial Services. According to Sophie Lagouanelle, writing on the FCPA Blog, it ranks with other 21st Century disruptors such as AliPay and WeChatPay, but moves beyond them in a way that will change the compliance landscape profoundly. By providing detailed information about all parties involved in a payment, ISO 20022 will speed payments, increase transparency, improve sanctions screening, and help organizations better detect and prevent financial crime. It is designed for global operability. It describes a common platform for messaging in respect to cross-border payments, with a flexible infrastructure that facilitates information exchange and removes barriers that complicate compliance. Use is not mandatory, but according to Lagouanelle, those that do not use it risk being excluded from international payment systems. Japan, Switzerland, mainland China, and India are already using ISO 20022. Major central clearinghouses and SWIFT are planning to switch starting in 2021. The United States, Canada, UK, and eurozone planning will transition over the next four years. In total this will comprise more than 80 percent of global high-value clearings.