STANDARDISATION STANDARDISATION CONVERGENCE: CONVERGENCE:

A CHINESE PUZZLEA CHINESE PUZZLE

HOW TO COMBINE IN THE SHORT, MEDIUM and LONG TERM?

– Concrete and pragmatic solutions

– Convergence within the financial domain

– Harmonisation between finance and other domains

What is the right way?

How to combine all pieces?

Who will get a rabbit out of his hat?

REMIND YOU THREE REMIND YOU THREE YEARS AGOYEARS AGO

For banks:– SWIFT was standardising bank to bank– TBG 5 was standardising bank to client– ISO TC 68 Finance was focusing on limited areas

– Most of the representatives in one of these organisations didn't even know they had colleagues representing their bank in other organisations

For clients:– Treasurers didn't know they had company experts in

UN/CEFACT and vice versa

SINCE THENSINCE THEN

ADOPTION of a COMMON METHODOLOGY

– Defined by UN/CEFACT & OASIS,– Standardised as ISO 15000 in ISO TC154

– But standardised also in parallel in ISO TC68 Finance, firstly for securities, called ISO 15022 version 2, changed recently to ISO 20022 slightly different from ISO 15000

Reminder on standardisation Reminder on standardisation TARGET for FINANCETARGET for FINANCE

To enable communication interoperability between:– financial institutions, – their market infrastructures and – their end-user communities

But, most of end-user companies are not members of the financial sphere =>

FINANCE IS NOT AN FINANCE IS NOT AN ISOLATED ISLANDISOLATED ISLAND

Facing the risk of multiple Facing the risk of multiple standardsstandards

Within Finance, with so many (>40) standardisation organisations

Outside Finance, in the cross-domain environment

An increasing need of cross-domain interoperability because of:– the desire for end to end STP– more and more actors involved in one operation

Examples of cross-domain Examples of cross-domain projects between finance and projects between finance and

other UN/CEFACTother UN/CEFACT

E-Invoice Remittance Advice Electronic Tendering Accounting Token

Projects not directly financial, but often with links

WHICH GIVES THE WHICH GIVES THE FOLLOWING SITUATIONFOLLOWING SITUATION

Solutions developed by SWIFT: available for clients

A unique methodology for finance, presently slightly different from UN/CEFACT

A new ongoing organisation for financial standardisation

A risk of competitive standards A clear willing for cross-domain harmonisation,

especially with UN/CEFACT, which requires time and agreements

AVAILABLE AVAILABLE SOLUTIONS IN SOLUTIONS IN

SWIFTSWIFT

Lien hypertexte

ONGOING ACTIONSONGOING ACTIONS

Finance has engaged two complementary actions:

– CONVERGENCE within the financial sphere

– HARMONISATION essentially with UN/CEFACT

CONVERGENCECONVERGENCE

ISO 20022, also called UNIFI, approved for all finance– Registration Management Group (RMG) created in

January– Standards Evaluation Groups (SEGs) to be created

Payments, Securities: immediately Treasury, Trade Finance

ISO TC68 becoming the hub for finance– 40 organisations to convince– New organisation to be finalised and efficient

HARMONISATION with HARMONISATION with UN/CEFACTUN/CEFACT

Already started or agreed:– Agreement signed in June 2004: TC68, TBG5 & SWIFT

– Ongoing convergence work plan for Core Components Gap analysis, investigates changes, submit recommendations,…

– June's co-operation agreement confirmed by RMG– Immediate submission of a pilot project approved by RMG

Still to be done:– Research of compatibility between workflows– Organisation of registries between ISO 20022 and UN/CEFACT

WHICH INTEREST WHICH INTEREST for UN/CEFACT?for UN/CEFACT?

Co-operate as much as possible with domains standardising more outside than inside UN/CEFACT (Finance, Transportation, Customs, Insurance, …) to facilitate cross-domain exchanges. Not specifically for Finance.

Pull other organisations with same methodology Lead standardisation process ...

– Uniqueness of the methodology– Uniqueness of a logical repository

… without appearing as dictatorial

TBG 5 ROLE: InterfaceTBG 5 ROLE: Interface

Data Dictionary

BusinessProcess

Catalogue

ebXML Registry / Repository

CoreComponents

CommonBusinessProcesses

ISO

TC68 Finance

UN/CEFACT All industries

UNIFIISO 20022

UN

TBG5

Bi-directional Roles for TBG5Bi-directional Roles for TBG5 From financial sphere to inter-sectorial:

Guarantee financial standards are recognised and unique– Be the supporting/forwarding arm for all sub-domains– Support forum harmonisation and validation– Market financial solutions within TBG– Market messages to clients

From UN/CEFACT to financial sphere:– Bring expertise in "ebXML" and methods – Be a pool for resources in customer to bank &

payments– Support evolution of forum workflow to facilitate the

workflow with external organisations (ISO 20022, but also GS1 (EAN), WCO, …)

Finally? Which Finally? Which organisation is doing what?organisation is doing what?

There are various types of standardisation organisations

None of them will disappear quickly It is then required to adapt roles to the new

situation Based on the acceptance of:

– unique methodology– unique registry– (partial lost of independence)

Roles of OrganisationsRoles of Organisations

World-wide & cross-domain Organisations : ISO, UN/CEFACT – Definition of methods– Responsible for transversal coherence (registry)

World-wide domain Organisations : SWIFT– A standardisation body for banks– Operator: RA + Modelling

Business Requirements: IST, TWIST, RosettaNet, FpML, ...

Regional Coherence:– Cross-sectorial: CEN, eBES, ANSI, – Sectorial : EPC, ECBS

FINALLY, WHY THIS FINALLY, WHY THIS PRESENTATION?PRESENTATION?

To show that there are solutions available To explain the approach followed in the Financial

Sphere to minimise divergences in standards– because Finance is surely not alone to face similar

issues– and because it could require some flexibility in

UN/CEFACT rules Because some issues require UN/CEFACT

participation

UN/CEFACT PARTICIPATIONUN/CEFACT PARTICIPATION

Reception of the first submitted project, Payment Initiation:– Follow up the normal approval workflow, – but with an open mind to detect potential

improvement(s) for this workflow Participate to the convergence work plan : TBG 5 &

17 + ICG (federated registry) + to be defined.

Find consensus solutions for cross domain projects Agree on a common message with clients: no

purist quarrels!

WHICH PRESENTATION WHICH PRESENTATION FOR CLIENTS?FOR CLIENTS?

Proprietary solutions are already available Standardisation under ISO 20022 is ongoing Standardisation in UN/CEFACT is ongoing Some user organisations are supporting Payment

Initiation as developed by SWIFT But ISO 20022 is not aligned on ISO TC154 A convergence work plan is on-going Users can -depending on the market they are in- in

cooperation with their customers assess the situation and start using solutions available with the potential risk of having to migrate once the standardisation & convergence activities are finalised

Pending QuestionsPending Questions

Interoperable or unique standards? A unique federated repository? ISO 20022

being one decentralised part? Which solution for client - bank secured

exchanges in parallel with MA CUGs? AS2? ????