ISO20022 for API & New Technologies

11 July 2019

Kenneth Leung, Standards

Asia Pacific, SWIFT

Agenda

1. Background

2. Challenges on API Framework

3. Challenges on API Payload Specification

4. ISO 20022 – the Business Standard for Financial Service Industry

5. ISO 20022 – the Building Block for API and New Technologies

6. Leveraging SWIFT’s Core Competencies

7. SWIFT’s API Whitepaper

8. Q&A

3

API Commuting

Shopping

Dining

BankingMusic

Ticketing

Connecting

Apps

Connecting

People

Connecting

Businesses

Is Everywhere

REST

REST

XML-RPC

SOAP

Challenges on API Framework

Easy to Develop | Low CostUniversal ReachTime-to-market

OAS

OAuth

FB Msgr

Like communication

many ways of Instant

Messenger Tools…

SnapchatWhatsapp

Telegram

Many API Technologies

Support by

standards of

Choice of Open Banking / FI

Easy switch between service providers Aggregate data from multiple sources

5

Challenges on API Payload Specification

You need to have a common understanding of

Like communication in different human languages

the semantics, grammar, sentence

structure….etc

To deliver the message clearly & accurately

Simplicity & Agility of REST API

Fragmentation becomes inevitable

Inconsistencies in Business Specifications

Negate key promises of API

6

Challenges on API Payload Specification

Data Convention -

Translation

Data format - Loss /

Truncation

Semantics/Meaning -

MisinterpretationVS

VS

VS

Processing Date Settlement Date

Purpose Code (for Recipient) Category Purpose (for bank process)

BAI Transaction code Proprietary code

Max35Text Reference Max12Text Reference

2 Lines of Details 4 Lines of Details

Structured Address Unstructured Address

Challenges /

Risks

API Spec

Flavor 1

API Spec

Flavor 2

Aggregator-C

API1

API2

Provider-A

Provider-B

Aggregator Model

API1 API2

Consumer-X Provider-Y

(Consumer of API2)Provider-Z

Propagator Model

Challenges on API Payload Specification

Problem exacerbates when API meets traditional messages

Challenges on API Payload Specification

Or when different new technologies used

for transporting the same data

“Whatever the technology, in multi-party networked business,

participants need to agree on the meaning and content

of shared data, business processes, roles and responsibilities.

This is the domain of business standards”

9

10

ISO 20022 – Business Standard for Financial Services

Platform & Technology Agnostic

Simplifies

API integration

into existing process & systems

Machine-processable

repository of content

Was conceived to harmonise

fragmented financial

messaging standards

landscape Methodology

to standardize

financial transaction

Open and

global standard

11

What is ISO 20022?

Single standardisation approach (methodology, process, repository)

to be used by all financial standards initiatives

• Defines business meaning of financial concepts, e.g., ‘Credit Transfer’

Business / Conceptual

• Defines e.g. credit transfer messages, to execute the business process

Logical

• Defines physical syntax, e.g. XML, JSON,…etc

Physical

• Business models

• Data dictionary

• Catalogue of messages

Recipe to create financial standards Body of content

Not only for XML

Concept

12

ISO 20022 – the Building Block for API and New Technologies

All institutions have

their own sets of data

objects

XML

…are then used to define

APIs in a specific syntax JSON

…and groups them into ‘syntax-neutral’

data models, which...

ISO standardizes common

data objects…

Define the API Resources

Selectively reuse existing

ISO 20022 components &

elements => Custom

resource componentsNo need to use the entire

structure of the source component

=> No deep nesting like in

message design

14

Define the API request/responses based on the Resources

Pick and choose the

elements from the

Resources to compose

your API calls

No need to reuse the entire

structure of the Resource

=> No deep nesting like in

message designOnly use the elements you

need for the API call

=> Custom made calls

Add technical

elements where

appropriate

Leveraging SWIFTs core competencies

Foster standardization at

industry level reusing the

ISO20022 data dictionary

Offer API connectivity and

developer support for more

value added services

Collaborate with the community

to explore use cases and

expose a global community API

catalogue on the platform

SWIFT APIs enable financial institutions and corporate customers to expose or consume financial

services in a trusted environment using standardised transactions according to the ISO 20022 model.

Simplification of access

to SWIFT Shared

Services

Customer API exposureStandardization of API

specifications

15

Standards initiative related to adjacent servicesShared services

Core services (gpi) Standards initiative related to Core services

SWIFT and Community APIs

16

KYC API

rolling-out

Sanctions

Screening API

current

KYC-SA API

future

SWFTRef API

current

Tracker API v1

current

g4C API

rolling-out

Tracker API v2

rolling-out

gFIT API

future

PayLater API

GTV

tentative

Securities

(Status)

tentative

Bank 2 Corporate

Liquidity

tentative

Beneficiary

Account

Validation

tentative

PSD2

tentative

NAV Calculation

tentative

Complex

Instruments

tentative

current

Pay Later API - Press Release – 16 Jan 2019

• Small strategic working group to publish V1.0 of the standard

• Rapidly scalable across large number of banks and merchants globally

• Use of ISO20022 component

• Ensure compatible with clearing/settlement

of instant payments

• Simplify data integration for both banks and

merchants

Merchants BanksConsumers

Common API spec

• for banks to implement

• for merchants to connectConfidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent

SWIFT White Paper on API

Delivering a global platform for financial services API economy• Avoid re-invent the wheel

• Needs a single, shared business standardisation methodology and governance

strategy

• Re-use ISO20022 business definitions and data models

• Ensure end-to-end consistency in business processes (API & Legacy)

• Look beyond immediate need to comply with regulation or for tactical solution

Two key aspects to ISO20022:

• A methodology: a “recipe” to standardise financial transactions.

• A machine-processible repository of content:

• the definitions of messages,

• business concepts,

• processes and everything else required to describe those transactions

• ISO20022 API shares the same business

semantics and data dictionary as a

related ISO20022 message.

• Greatly simplifies the task of integrating

the API to existing financial systems and

processes.

[Download here]: https://www.swift.com/news-events/news/delivering-a-global-platform-for-the-financial-services-api-economy

18

Thank You