“APIs and ISO20022 are actually completely incompatible with one and other. You wouldn’t want a modern agile API using ISO 20022 standards because [the standard] is too thick and too heavy,” said Craig Ramsey, ACI’s head of real-time payments at an industry event this week in London.
“It’s a very heavy weight message to be moving around for a nimble and agile API,” he said.
In a consultation paper published by SWIFT in April 2018, the payments organisation said ISO 20022 – the standard for messaging between financial institutions – is “designed to adapt to new technologies as they emerge, and can be applied to APIs and other technologies to ensure end-to-end consistency of business processes.”
But Ramsey suggests the market is moving in a different direction.
“We see a transformational shift going on at the moment, even SMEs wanting access to the bank’s terminal, to a place the fintech provides the SME a broad range of services including access to the bank or more likely the banks that the SME works with. We will see an evolution of APIs, right now the legislation is pretty tight, and restricted to certain services. Nobody is talking about provision of services to customers anymore without APIs being part of that conversation,” continued Ramsey.
One audience member said he had seen that US correspondent banks “don’t necessarily recognizes the charges in our codes, and they change it to a share.”
Stanley Wasch, global head of bank engagement at SWIFT acknowledged that the organisation had heard that some banks may not be paying the transparency gain in the US.
“That is going to change because actually, as a gpi member you have to adhere to the business rules, and your behavior gets you a quality index that is exposed to your counterparties,” Wasch responded.
“I was at a relevantly big FI event last week, I saw that banks are using these quality indexes to commercialize their own gpi offering to other FIs and to their corporates by saying, ‘look on transparency I’m 100%.’
“You could argue that some of these charge codes are very complex, and not always understood by everyone. There could be a world in the future where actually there could be a bit more transparency on that,” he said.
Later in the discussion, Wasch agreed with audience concerns that banks’ adoption of SWIFT gpi isn’t happening fast enough for the industry, but encouraged corporates to tackle their banks on the issue.
“You’re right it’s not going fast enough, and I think corporates need to go to their banks and really ask them to fast track the implementation of gpi and to fast track the experience that they can really give back to the corporates,” said Wachs.