ISO20022 for API & New Technologies

Kenneth Leung, Standards

Asia Pacific, SWIFT
11 July 2019
Agenda
1. Background

2. Challenges on API Framework

3. Challenges on API Payload Specification

4. ISO 20022 – the Business Standard for Financial Service Industry

5. ISO 20022 – the Building Block for API and New Technologies

6. Leveraging SWIFT’s Core Competencies

7. SWIFT’s API Whitepaper

8. Q&A
Connecting Connecting
Apps People
Shopping

Commuting Dining
API
Is Everywhere
Ticketing
Banking
Music

Connecting
Businesses
3
Challenges on API Framework

Easy switch between service providers Aggregate data from multiple sources

Time-to-market Universal Reach Easy to Develop | Low Cost

Like communication
many ways of Instant XML-
SOAP
Messenger Tools… RPC Many API Technologies
Whatsapp
Snapchat

FB Msgr
Telegram REST

OAS
Choice of Open Banking / FI REST
Support by
standards of OAuth
Challenges on API Payload Specification

Simplicity & Agility of REST API

Fragmentation becomes inevitable

Inconsistencies in Business Specifications

Negate key promises of API

Like communication in different human languages
To deliver the message clearly & accurately

You need to have a common understanding of

the semantics, grammar, sentence

structure….etc
5
Challenges on API Payload Specification

API1 Provider-A
API1 API2

API2
Provider-B Consumer-X Provider-Y Provider-Z
Aggregator-C
(Consumer of API2)

Aggregator Model Propagator Model

Challenges / API Spec API Spec

Risks Flavor 1 Flavor 2

Semantics/Meaning - Processing Date Settlement Date

VS
Misinterpretation Purpose Code (for Recipient) Category Purpose (for bank process)

Data Convention - BAI Transaction code Proprietary code

Translation Structured Address VS Unstructured Address

Data format - Loss / Max35Text Reference Max12Text Reference

Truncation 2 Lines of Details VS 4 Lines of Details

6
Challenges on API Payload Specification

Problem exacerbates when API meets traditional messages

Challenges on API Payload Specification

Or when different new technologies used

for transporting the same data
“Whatever the technology, in multi-party networked business,
participants need to agree on the meaning and content
of shared data, business processes, roles and responsibilities.
This is the domain of business standards”

9
ISO 20022 – Business Standard for Financial Services

Was conceived to harmonise Open and

fragmented financial
messaging standards
global standard
landscape Methodology
Platform & Technology Agnostic to standardize
Simplifies financial transaction
Machine-processable
API integration repository of content
into existing process & systems
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What is ISO 20022?
Single standardisation approach (methodology, process, repository)
to be used by all financial standards initiatives

Recipe to create financial standards Body of content

Business / Conceptual Concept

• Defines business meaning of financial concepts,

• Business models
e.g., ‘Credit Transfer’

Logical
• Data dictionary
• Defines e.g. credit transfer messages, to execute
the business process

Physical
• Catalogue of messages
• Defines physical syntax, e.g. XML, JSON,…etc

Not only for XML

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ISO 20022 – the Building Block for API and New Technologies

All institutions have

their own sets of data
objects

ISO standardizes common

data objects…
…and groups them into ‘syntax-neutral’
data models, which...

…are then used to define

JSON XML
APIs in a specific syntax

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Define the API Resources

Selectively reuse existing

ISO 20022 components &
elements => Custom
resource components
No need to use the entire
structure of the source component
=> No deep nesting like in
message design
Define the API request/responses based on the Resources

Pick and choose the

elements from the
Resources to compose
your API calls

No need to reuse the entire

structure of the Resource
=> No deep nesting like in
Only use the elements you message design
need for the API call
=> Custom made calls
Add technical
elements where 14
appropriate
 Leveraging SWIFTs core competencies

SWIFT APIs enable financial institutions and corporate customers to expose or consume financial
services in a trusted environment using standardised transactions according to the ISO 20022 model.

Standardization of API Simplification of access Customer API exposure

specifications to SWIFT Shared
Services

Foster standardization at Offer API connectivity and Collaborate with the community
industry level reusing the developer support for more to explore use cases and
ISO20022 data dictionary value added services expose a global community API
catalogue on the platform

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SWIFT and Community APIs

Core services (gpi) Standards initiative related to Core services

current rolling-out
tentative tentative
Beneficiary
Tracker API v1 Tracker API v2
GTV Account
Validation

rolling-out future tentative tentative

g4C API gFIT API Securities Bank 2 Corporate

(Status) Liquidity

Shared services Standards initiative related to adjacent services

current current tentative current
Sanctions
SWFTRef API Screening API PSD2 PayLater API

future rolling-out
tentative tentative

KYC-SA API KYC API Complex

NAV Calculation
Instruments

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Pay Later API - Press Release – 16 Jan 2019

• Small strategic working group to publish V1.0 of the standard • Use of ISO20022 component
• Rapidly scalable across large number of banks and merchants globally • Ensure compatible with clearing/settlement
of instant payments
• Simplify data integration for both banks and
merchants
Consumers Merchants Banks

Common API spec

• for banks to implement
• for merchants to connect
Confidentiality: RESTRICTED. Do not disclose to third parties without SWIFT's prior written consent
SWIFT White Paper on API
Delivering a global platform for financial services API economy
• Avoid re-invent the wheel
• Needs a single, shared business standardisation methodology and governance
strategy
• Re-use ISO20022 business definitions and data models
• Ensure end-to-end consistency in business processes (API & Legacy)
• Look beyond immediate need to comply with regulation or for tactical solution
• ISO20022 API shares the same business
semantics and data dictionary as a
related ISO20022 message.

• Greatly simplifies the task of integrating

the API to existing financial systems and
processes.
Two key aspects to ISO20022:
• A methodology: a “recipe” to standardise financial transactions.
• A machine-processible repository of content:
• the definitions of messages,
• business concepts,
• processes and everything else required to describe those transactions
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Thank You