Today’s custody banking face several challenges. Inside the bank, IT structures have often grown organically, are complex to manage and risk despair if knowledgeable people leave the company. Smart customers hop between banks and demand quick access through more channels than ever, while new regulations require procedure changes and increased capitalization.Customer Challenges
To provide a faster and secure method in transferring funds between financial institutions while maintaining ISO standards.Solution by transiting from ISO 7775 to ISO 15022
There is a big variety in scale, need and business type in the custody banking world. No two banks are ever the same. That’s why while making a transaction between two financial institutions, a messaging system ISO 7775 of ISO standard was used. The previous standard ISO 7775 contained the actual message standards themselves (like the SWIFT message types MT 520 or MT 534), which did not make it easy to make changes to these standards (because each time one needs to pass a number of time-consuming standard cycles). To avoid this, ISO 15022 does not contain the actual messages, but contains a set of rules and guidelines to build messages. If these rules and guidelines are adhered to (checked by the registration authority) the resulting message (format) is automatically an ISO 15022-compliant standard.
Participants in the financial industry need a common representation of the financial transactions they perform and this standard defines general message schema, which in turn are used by organizations to define messages in a complete and unambiguous way. This results in efficiency, lower costs, and the avoidance of errors. Prior to standardization in this area, there were overlapping standards or ad hoc approaches where there was a functional gap and no standard. Trace implemented the messaging system from standard ISO 7775 to ISO 15022.