What Is ISO 15022 Messaging?
To conduct their business, financial institutions exchange massive amounts of information with their customers and among themselves. Such exchanges only work if the sender and receiver of a message have a common understanding of how to interpret this information.*
To be able to eliminate the need for human intervention to interpret the data, the financial industry has created message definitions — that is, agreements on how to organize the data they want to exchange in structured formats (syntax) and meaning (semantics).*
The International Organization for Standardization (ISO) is a worldwide federation of national standards bodies. The standards body governing messaging for financial institutions is the Society for Worldwide Interbank Financial Telecommunication (SWIFT). SWIFT has established common standards for financial transactions and a shared data-processing system and worldwide communications network. SWIFT has become the industry standard for syntax in financial messages. Messages formatted to SWIFT standards can be read by, and processed by, many well-known financial processing systems, whether or not the message actually traveled over the SWIFT network.
SWIFT develops and maintains International Standard ISO 15022. ISO 15022 is currently the predominant securities standard in cross-border cll, reconciliation, and corporate action processing. The adoption of ISO 15022, mandated in 2003, has led to a dramatic increase in straight-through processing (STP) rates. One of the standard's advantages is its data dictionary-based approach, which enables reuse and standardization of data across all messages. About half of the 15 million messages exchanged on the SWIFT network every day are ISO 15022.*
*Portions of this article have been adapted from the booklet titled "ISO 20022 for Dummies," written by The SWIFT Standards Team, copyright © 2010 by John Wiley & Sons, Chichester, West Sussex, England.