[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]
The Return of The XML All-Star Team [NACHA Payments]
Susan Colles CPA, CBA
Senior Vice President, Bank of America
Robert Blair CCM
Vice President, JPMorgan Chase
Manager, Treasury Services, GE Corporate Treasury
Fred Laing, II AAP, CCM
President, Upper Midwest ACH Association
Director, ABN AMRO Bank
Synopsis from Conference Program
ISO 20022 XML messages for corporations and banks are now beginning to be exchanged on B2B interfaces on a daily basis. Corporations continue to seek automated solutions in order to increase their efficiencies and transparency of transaction processing. Banks have collaborated so that a consistent usage is applied to the message content, and they have worked with ERP vendors to validate the data support within the business applications. Discover the initiatives being advocated by corporations and the benefits they have realized with their ISO XML integration. Hear how U.S. clearing systems, including the ACH Network, are incorporating these standards into their processing environment.
My Observations & Comments
A survey by GTNews and ABN AMRO reveals that the needs of Accounts Receivable are still inadequately addressed by today's payments environment. Eighty-five percent of respondents feel that legacy EDI standards are not helping enough. 44% believe that XML is a promising solution for delivering dollars and data together. Standards are the only means to achieve straight-through-processing (STP) of payments and remittance data.
The goal of ISO 20022 ("twenty-oh-twenty-two") is to facilitate transactions, not become the business process. It is syntax neutral (doesn't have to be XML, can adapt as technology evolves) and addresses a wide variety of financial business processes including payments, FX, trade, invoicing (under development), and securities. Thus far the payments transactions address credit, debit, and bank to corporate reporting.
Will NACHA adopt XML for ACH remittance data? There is a great opportunity to leverage XML to include remittance data with ACH transactions. XML is less expensive to develop, easier to use, and easier to understand. NACHA has developed a business case for incorporating XML and formed a rules workgroup. A request for comment will be distributed this summer and all interested parties are encouraged to comment. The idea is not to replace the existing ACH formats, but rather to incorporate XML in the addenda records (there was much discussion on this point during the session). It doesn't make sense to reinvent the wheel, so NACHA is looking at the ISO 20022 version of XML, particularly as it is gaining traction as a global standard.
Other uses of ISO 20022 In March 2009 NACHA will implement the International ACH Transaction (IAT Standard Entry Class Code) in order to address OFAC screening of transactions that involve parties outside the United States. The format of this transaction is based on ISO 20022. The Federal Reserve just announced that remittance data will be added to wires in either STP 820 (simplified EDI) or ISO 20022 format starting in late 2010. In addition, many banks are utilizing XML to drive the middleware layer between their various front end channels and back end legacy transaction processing systems.
File Mapping – SWIFT has published mapping guidelines to translate SWIFT FIN messages to XML and will shortly publish mapping guidelines for XML to IAT. NACHA committed to to the same.
Banks and Vendors Supporting ISO 20022 XML