The volume of digitized data is increasing rapidly. It represents a new and largely untapped source of value, which can lift the performance of financial services firms by enhancing decision-making, widening margins on existing products and services and fueling a variety of profitable innovations.
But realizing these gains depends on all parts of the industry using a common data model. ISO 20022 is the logical foundation of a common data model, writes the International Securities Services Association (ISSA). It is designed for that purpose, widely accepted in the financial services industry, and flexible enough to accommodate multiple data formats and business processes. Its dictionary provides a large set of standardized components which can be used to build data exchanges in any format and translate data exchanges between any pair of formats.
Once a common data model is shared, data exchanges become cheaper and simpler. This enables financial institutions to cut transaction costs and risks, especially in post-trade processing, liquidity management and customer due diligence checks. It also makes a range of innovative customer services possible, from open finance products to cryptocurrency and securities token investing.
But the innovations visible now are just the beginning. The exchange and analysis of the growing quantities of digitized data are poised to reshape the way the financial services industry makes decisions, interacts with customers, manages costs and risks, improves existing products and launches new ones.