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Exploring coexistence in the securities industry: Why the ISO 20022 central dictionary is the key to interoperability and realising data opportunities
This paper looks at how the securities industry can better manage coexistence between different message formats along with realising the many opportunities presented by available data. This is with a view to arriving at greater efficiency, profitability and interoperability within securities and across financial services. It begins with an overview of the quantities and types of data produced by the industry, discussing the costs and risks this poses if it is not sufficiently well managed. It then moves into a discussion of the need for a common language for all parts of financial services, including securities, to agree on in order to communicate more effectively. The paper focuses on using the global ISO 20022 standard for this purpose. It covers the question of migrating to it as a message format, for which there is little appetite within the securities industry in the short to medium term. ISO 20022’s central repository and data dictionary provide a solution, creating the common language that can help to ensure interoperability between entities. It includes discussion of the many benefits of using ISO 20022 in this way, such as reduced costs, risks and timeframes. It highlights how ISO 20022 as a data model can be applied to developing standardised application programming interfaces and building connections with emerging technologies and industries such as distributed ledger technology and crypto assets. The paper also looks at the risks and limitations posed by a prolonged period of coexistence. The use of a common data dictionary can enable firms to interoperate without having to align data exchanges at the syntax level; however, there are still associated costs, risks and inefficiencies. The conclusion is that securities market participants should collaborate to adopt a common data dictionary that can be integrated into their systems, their software and their processes.
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Juliette Kennel joined SWIFT in 2004 and is currently Head of Standards. SWIFT Standards cover diverse financial business areas including international payments, asset servicing, securities settlement, treasury and trade finance. Its standards and market practice guidelines are used by 11,000 financial institutions around the world and contribute to helping them achieve greater efficiency, profitability and interoperability across financial services. Prior to her current role, Juliette held several other senior management positions at SWIFT, including head of capital markets and FX, and head of market infrastructures. Before joining SWIFT, Juliette worked at Morgan Stanley in London, Société Générale in Paris and Clearstream in Luxembourg. Juliette is based in Belgium, where SWIFT is headquartered, and holds a dual French and British nationality.