unifi (iso 20022) “ creating interoperability for the financial industry”

Frank VandammeSenior Manager, StandardsSWIFT

UNIFI UNIFI (ISO 20022)(ISO 20022)““creating interoperability creating interoperability for the financial industry”for the financial industry”

OASIS Symposium, San Francisco, 9 May 2006

SWIFT

SSociety for WWorldwide IInterbank FFinancial TTelecommunication

– CommunityCommunity: financial institutions active in payments, securities, treasury and trade services

– NetworkNetwork: secure and reliable network application

– StandardsStandards: standardized information flows (messages) Some figures:

– Established in 1973

– 7,850 users in 204 countries

– More than 11 million messages per day

– Yearly growth more than 10%

A typical business transaction

Business transaction = all communication to fulfil request from originator to

beneficiary

Please pay CORP2 100.000 USD (net) by 31 Aug 2005, for invoice “corp2_143”. Indicate a difference of 25.000 USD with the requested amount due to

non-delivery of one article

A typical business transaction

Please pay CORP2 100.000 USD (net) by 31 Aug 2005, for invoice “corp2_143”. Indicate a difference of 25.000 USD with the requested amount due to

non-delivery of one article

Paymentinitiation Statement

What is required to make this business transaction work? • All necessary communications are foreseen• All required information can be obtained and/or forwarded where and when necessary

Credit confirmation

Investigation

Inerbank settlement

Interbank settlement

Response

Interbank transferStatement

Credit transfer instruction

Credit transfer instruction

Standards landscape in the financial industry

EACT

FPML

ISDA

IFSA

TreasuryTreasury

TWIST

SWIFT

Bolero

ICC

IIBLP

UNCITRAL

IFSA

Trade FinanceTrade Finance

EAN/UCC

SWIFT

FIX

ISITC-IOAISSA

SMPG

SIA

FISD/MDDL

G30

Giovannini

BMA

SecuritiesSecurities

SWIFT

EPC/ECBS

ISTH

IFX

RosettaNet/PMP

OAGi

X12

PaymentsPayments

Fedwire

CHIPSTCH

NACHA

SWIFT

TC68/SC4

WG

8 & WG

11

TC68

/SC6&

7

CEFACT/

TBG

5

TC68/SC4&7

CEFACT/

TBG

15

W3CUN/CEFACT

MoU/MG

OMGISO

OASIS

OAGiIFX

EPC

ISTH

Edifact

X12

A typical business transaction … impacted by the standards landscape

Swift

FedWire

?

?

?

?

?

?

?

?

?

?

?

UNIFI (ISO 20022) Building towards a common approach

EACT

FPML

ISDA

IFSA

TreasuryTreasury

TWIST

SWIFT

Bolero

ICC

IIBLP

UNCITRAL

IFSA

Trade FinanceTrade Finance

EAN/UCC

SWIFT

FIX

ISITC-IOAISSA

SMPG

SIA

FISD/MDDL

G30

Giovannini

BMA

SecuritiesSecurities

SWIFT

EPC/ECBS

ISTH

IFX

RosettaNet/PMP

OAGi

X12

PaymentsPayments

Fedwire

CHIPSTCH

NACHA

SWIFT

TC68/SC4

WG

8 & WG

11

TC68

/SC6&

7

CEFACT/

TBG

5

TC68/SC4&7

CEFACT/

TBG

15

W3CUN/CEFACT

MoU/MG

OMGISO

OASIS

UNIFI UNIFI ISO20022ISO20022

UNIFI (ISO 20022)Main drivers

Improve qualityImprove quality

– Ensure end-to-end interoperabilityEnsure end-to-end interoperability

– Support diversity (market practices)Support diversity (market practices)

– Improve STP (Straight Through Processing)Improve STP (Straight Through Processing)

– Reduce ambiguityReduce ambiguity

– Increase business focusIncrease business focus Reduce implementation costs (& TCO)Reduce implementation costs (& TCO)

– Reduce impact of proprietary technologyReduce impact of proprietary technology

– Increase automation capabilitiesIncrease automation capabilities

– Reduce impact of maintenanceReduce impact of maintenance Improve time-to-marketImprove time-to-market

Make it better, faster & cheaperMake it better, faster & cheaper

UNIFI (ISO 20022)Major components

UNIFI objective = develop standardised information flowsUNIFI objective = develop standardised information flows

Modelling-based standards development (UML)

Repository (data dictionary & business process catalogue)

Syntax-specific design rules (XML)

Registration process

Reverse engineering approach

Parts 1 & 2

Technical Specifications

1, 2 & 3

UNIFI (ISO 20022)Standards development methodology

Three layered approach Business-oriented Communication needs End-to-end view Formal notation (UML) Representation-neutral Implementation-neutral Foster reuse (dictionary) Involve industry experts

Business AnalysisBusiness Analysis

Requirements AnalysisRequirements Analysis

Logical AnalysisLogical Analysis

Logical DesignLogical Design

Technical DesignTechnical Design

Technical ImplementationTechnical Implementation

Understand the business

What is the communication

problem

Define the solution

Refine the solution

Generate message

formats(automated)

ISO 20022 Standards Repository

DATA DICTIONARY BUSINESS PROCESS CATALOGUE

UNIFI (ISO 20022)Standards repository

are describedwith

use

BUSINESS AREAS

support execution of

BUSINESS TRANSACTIONS

BUSINESS CONCEPTS

MESSAGE CONCEPTS

DATA TYPES

are derived from

UNIFI (ISO 20022)UML-to-XML conversion

UML (class diagram)

XML (schema)

UNIFI (ISO 20022)Registration bodies

Registration Authority (RA)

ISO

Communities of users & developers

Standards Evaluation

Groups (SEGs)

Securities

Payments

ISO

…

Registration Management Group (RMG) ISO

ISO 20022Repository

Data Dictionary

BusinessProcess

CatalogueISO

UNIFIStandards

Evaluation Groups

ISTH

MDDL

FpML

SWIFT

FIX

ISO WGs

TBG5

CoreComponents

CommonBusiness

Processes

DataDictionary

BusinessProcess

Catalogue

ebXML Registry/Repository

www.iso20022.org

UNIFI FinancialRepository

UNIFIRegistration

Management Group

Securities

Payments

UN / CEFACT(All Industries)

UNIFIRegistration

Authority

UNIFIUsers

BusinessRequests

MessageModels

TBG17Harmo-nisation

UNIFI (ISO 20022)Long term convergence goal

under investigationunder investigation

under investigationunder investigation

UNIFI (ISO 20022)Interoperability based on modelling …

Order

DateDate

Account

Order

Date

XML FIX FpMLEdifact

SWIFT

UNIFI (ISO 20022)… and reverse engineering

Execution Report Tag Field Name Re

q'd Comments

Standard Header Y MsgType = 8

37 OrderID Y OrderID is required to be unique for each chain of orders.

198 SecondaryOrderID N Can be used to provide order id used by exchange orexecuting system.

11 ClOrdID N Required for executions against electronically submittedorders which were assigned an ID by the institution. Notrequired for orders manually entered by the broker.

41 OrigClOrdID N Conditionally required for response to an electronic Cancelor Cancel/Replace request (ExecType=PendingCancel,Replaced, or Canceled). ClOrdID of the previous order(NOT the initial order of the day) when canceling orreplacing an order.

109 ClientID N Used for firm identification in third-party transactions.

76 ExecBroker N Used for firm identification in third-party transactions.

382 NoContraBrokers N Number of ContraBrokers repeating group instances.

375 ContraBroker N First field in repeating group. Required if NoContraBrokers> 0.

337 ContraTrader N

FIX, FpML, SWIFT, …

Complete &Complete &UpdateUpdate

Order

DateDate

RepositoryCompareCompare

Account

Order

Date

Convergence InformationFIX-FpML- XML

:25: acctId

:61:sub5 ntryAmt

.. ..

SupportSupportcoexistencecoexistence

XML

FIX, FpML, SWIFT, …

UNIFI (ISO 20022)Conclusion

Improving interoperability todayImproving interoperability today

– Registration bodies are up and running

– More than twenty countries and organisations

Building for the future through ISO TC68 / WG4Building for the future through ISO TC68 / WG4

– Identifying further alignment and enhancements

– Active participation of organisations like OMG, UN/CEFACT, FpML, SWIFT, TWIST, MDDL, …

Financial industry is achieving Financial industry is achieving interoperability through UNIFIinteroperability through UNIFI

UNIFI UNIFI ISO20022ISO20022

unifi (iso 20022) “ creating interoperability for the financial industry”

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