ODIN Fund Management and BSK: New standard to improve finance industry services
Financial gain and simpler solutions will be the result when more countries adopt the ISO 20022 standard. The ambition of the finance industry is to use electronic transactions with a continuous messaging chain.
Efficiency in the finance industry depends on the sender and receiver speaking the same language and interpreting concepts in the same way. That is why the industry needs ISO 20022, as a recipe for the creation of automated financial messaging.
In recent years, European banking has made efforts to realise SEPA, a single euro payment market based on the standard. It is stipulated by law that all banks and companies paying in euros must now comply with ISO 20022. In 2016, the standard will be introduced in the EEA countries and in the European Union member countries with a currency other than the euro. The same rules will apply in the EU and EEA.
“This standard provides security for users of financial services. For ODIN it is a mark of quality,” said Morten Sørli, Director of Technology and Business Support at ODIN Fund Management. He is also a member of the Securities Market Practice Group (SMPG), a sector organisation represented in 30 countries. The SMPG is working to adapt the domestic market to the standard.
“For payments in Norwegian kroner in the domestic market, we are perhaps on track for a complete transition for the bank-customer interface by 2020. Changes in the interface between banks and companies will depend on how quickly companies adapt,” said Lars Erik Fjørtoft, CEO of the Norwegian Banking Standardisation Bureau (BSK), adding that BSK will work actively to develop ISO 20022 in Norway. “Therefore, it is of great value to us that an agreement with Standards Norway will mean that we can now be on national and international standardisation committees. We will be able to discuss with many key players and agree on what should be the Norwegian views,” he said.
Easier for all
The DNB leaders Dag-Inge Flatraaker and Atle Fjereide are respectively chairman and vice-chairman of the board of SWIFT Norway. SWIFT is an electronic network for cross-border payments and is used by most banks globally.
ODIN Fund Management adopted ISO 20022 for order management as early as 2009. This led to automated trading, which removed the risk of errors and error costs.
Svein Carlsson is an expert on ISO 20022. As a former employee of ODIN Fund Management, he helped to introduce the standard in order management.
ISO 20022 increases consumer confidence.
“The transaction messages show the quick and secure transfer of funds into an account, the identity of the sender and receiver and the purpose of the transaction. The standard helps to ensure a safer digital world. The financial sector must adapt to ISO 20022 in order to comply with government regulatory requirements. In Norway, this will require several constitutional amendments,” said Svein Carlsson.
The financial industry has been a driving force behind ISO 20022. Norwegian banks will need many years to adapt to the standard beyond the regulatory requirements of SEPA EU. The BSK is working to create standards for domestic bank payments. The Board has approved a roadmap for a controlled transition to ISO 20022.
“We are working actively to introduce ISO 20022. The benefit is that businesses and banks can relate to one standard in the Eurozone, and preferably in all the markets where they operate. This provides an integrated market where borders are erased and competition is intensified. Trade and economic relations will be easier for everyone,” Flatraaker and Fjereide agreed. Fjereide is also the Norwegian representative on the international steering committee for the ISO 20022 standard. Flatraaker is a board member of the European Payments Council (EPC), which on behalf of the European banking system established the single European payment area SEPA.
Text and small pictures: Siv Ellen Omland, Empower Communication