SWIFT ISO20022 Banking Standard Adoption and Banking Innovation (Research Paper Sample)

ISO20022 "SWIFT" ISO20022 BANKING STANDARD ADOPTION AND THEIR USE FOR BANKING INNOVATION
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Introduction
The paper aims to present research on the ISO20022 banking standard and "SWIFT" banking network. It will utilize the Global and Australian banking industry as the background for the project to assess the benefits of upgrading to the SWIFT High Value and Cross Border Payments. It will also focus on the benefits related to complying with the new ISO20022 data standards for payment messaging (The Financial Brand, 2019). While this multi-billion dollar compliance project progresses, the research will also focus on the opportunities to differentiate as an overlay to compliance. The proposed data and empirical strategy section will contain an overview of the proposed data source and the empirical approach used to address the research problem. The current banking world requires banks to retain the ability to facilitate the transfer of financial messages in a secure and timely manner. It also demands banks to comply with industry-compliant payment platform standards for their customers (Gartner, 2021).
The primary benefit outcome from banking innovation is to attain compliance to the SWIFT ISO 20022 standards. Migration to the ISO 20022 standard is an important strategic step forward for the Australian banking industry. The ISO 20022 messages replace message types developed under an older standard, ISO 15022. The SWIFT electronic payments network uses these older message types. The new ISO 20022 message types are known as SWIFT MX messages. It will modernize the way high-value payments are exchanged and enable broader changes that will support the efficiency of the overall banking industry. Innovation can be defined as making something new and more productive. Today's banks are not restricted to traditional banking activities. Therefore, they are exploring newer avenues aimed at increasing business and venturing into new markets.
Currently, banks are moving toward a moderately developed banking system with diverse classes of banks. Some of these banks have engaged in credit cards, consumer credit, phone banking, and internet banking. For instance, many banks across the globe have already established subsidiaries for leasing, merchant banking, and mutual funds, while others are migrating to the new tech innovations. This research extends our bank's projects to retain the ability to facilitate the transfer of financial messages in a secure and timely manner in compliance with industry-compliant payment platform standards for its customers. The primary benefit outcome is compliance with the SWIFT ISO 20022 standards.
Statement of the problem and its significance
It is impossible to deny that banks are becoming inevitable for everyone in the current world. In many countries worldwide, the banking sector has to become a promising sector. However, the situation has changed where the services of banks are upsetting people's lives and lifestyles. Moreover, the need and the satisfaction level of people have moved beyond the earlier benchmark in the current world. Unlike in the past, where banks provided limited services, the banking industry provides so many services to consumers today. Banks were limited to urban centers like today where banks are extending their marketing to the rural side (Gartner, 2021). Additionally, the number of banks is continuing to grow, and they are providing services that go beyond offering savings services and thus, competition is getting stiffer every day. Banks are trying to reinvent themselves so that they can increase their performance and profitability to gain competitive edges in the industry.
The ISO 20022 messages was introduced to replace message types developed under an older standard, ISO 15022.The new ISO 20022 message types are known as SWIFT MX messages. Once implemented, the benefits of the migration will extend beyond the efficiencies of harmonized message formats and enable the high-value payments system to be more responsive to new technologies and more resilient (The Financial Brand, 2019). The welcome support from the industry to adopt enhanced message content will also help efforts to combat financial crime and foster innovative new services.
Project objective
This IRP's research aims are to take an evidence-based approach to leverage the extensive technology modernization and standardization projects to seek opportunities to differentiate and innovate from an industry standardized compliant baseline. The research also aims to assess the relationship between innovation in the banking sector and the profitability of banks and establish the drivers of banking innovations. The primary objective of the research is also to ascertain that innovation and compliance to the ISO20022 in the banking sector contribute largely to profitability. Therefore, it will assess the various dimensions of banks' profitability about innovation in the sector.
The applied research project's objective is to gain some competitive advantage that can distinguish the banks Institutional banking products and services (High value and cross-border payments) from others in the industry – from a standardized open compliance platform. The background is the Global and Australian banking industry upgrade to the SWIFT High Value and Cross Border Payments to comply with the new ISO20022 data standards for payments messaging. While this multi-billion dollar compliance project progresses, this research project will seek the opportunities for our bank to differentiate as an overlay to compliance.
Research questions:
The following research questions will guide the research:
1.What is the opportunity for a bank to leverage today's technology to achieve business benefits while conducting compliance projects?
2.What are some benefits of other banks' compliance technology projects?
3.How could our bank apply for these benefits?
Methodology
The research project will follow a protocol following established best practices and utilizing research tools to sample, devise, collect, and analyze qualitative and quantitative data. The validity of the research and literature will be high. This study will also be a source of essential data for other researchers and banking professionals to appreciate the impact of innovation in the banking industry.
Pattern-matching will then overlay this IRP on the previous research as comparison and gap analysis. Pattern Matching (PM) is a method of data analysis recommended for use in qualitative research. It involves comparing a predicted theoretical pattern in the banking industry with the current empirical patterns. It will look at what other industries have done with the ongoing technology advance and compliance to the policy standards and apply it back to our industry.
It will also look at what other Banks and FinTec may have done as early adopters, innovators and disruptors in other countries. Such countries include the UK, where banks have made significant efforts toward benefiting from the opportunities presented by the innovation in the banking industry and compliance to the ISO20022. Research patterns organize the know-how of the research activity. Each pattern consists of the background of the frequent problem and the clue to find a solution in the research activity. For example, Africa may be applied to the banks in Australia, and what have Fin Tec’s and crypto-currencies innovated that could be legally adopted.
Data and empirical strategy
The proposed contribution will look at what other Banks and FinTec's have done in different countries to determine the benefits of migration and compliance. Legacy correspondent banks supporting g commercial flows introduce inconsistent customer pricing and experience, technology complexity, and increasing costs due diligence. the legacy correspondent banks setups supporting g commercial flows introduces inconsistent customers pricing and experience, technology complexity and increasing costs due diligence.
Financial and non-financial institutions are rapidly developing new ways of partnering to provide financial