Cross-border payments, a panel including representatives of the Bank of England, Payments Canada and The Clearing House agreed, are hard!

In 2020, the Financial Stability Board put together a roadmap for boosting cross-border payments in response to Saudi Arabia making the improvement a priority of its G20 presidency. The BofE's John Jackson has been heavily involved in the roadmap effort. He told the summit that all of the little frictions in domestic payments get magnified and build on top of each other when it comes to cross border.

The friction comes from regulations, with different jurisdictions having different rules on things like money laundering. It also comes from technology and data. This is why, Jackson argues, ISO 20022 is crucial: even if regulations are not harmonised, at least you can move towards harmonisation of information across messages.

Payments Canada's Ales Novak agreed, saying that harmonisation of the data is a key elements. In the case of ISO 20022, you are at least speaking the same language - although doesn’t fix everything.

Elena Whisler from The Clearing House in the US made the point that how much to harmonise is actually a tricky balance because different sectors require different things from the messages.

Whisler offered some insight into The Clearing House's work with EBA Clearing and Swift on a pilot service for immediate cross-border payments (IXB). The service promises to improve cross-border payments by utilising the fastest domestic payment options. With the PoC proving successful, the partners are now looking at whether IXB can work with other jurisdictions, such as Canada.

ISO 20022 was the subject of another panel, with representatives of Swift, the Australian Payments Network and EBA Clearing providing insight from their experiences of migration.

Following a brief delay, all three made the switch last month. While exploring a side-by-side switch, Europe in the end opted for a big bang migration. In contrast, Australia has opted for a coexistence period and so still has another 18 months to go to get every player moved over.

Marcos Cameron from Swift says that at the time of the switch, Swift was seeing about 15% of payments come with the new MX option. Now it is up to 20%, with the target to get to 100% in 2025.

Cameron compared the migration to ISO 20022 to the switch from landline phones to the first mobile phones but with the future looking like the smartphone that offers huge functionality.

Robert Magee from the Australian Payments Network noted that ISO 20022's greatest opportunity - enhanced data - can also be its greatest challenge because one size does not fit all. Banks that deals with lot of corporates has different needs to those mainly serving retail customers.

Asked about the most important lesson from their experiences, EBA Clearing's David Renault stressed that migration is not the end of the journey. It is easy to misuse the "beautiful but complex" standard and so market participants need to take the time to do things right and avoid getting the same old problems that they hope to move away from through adoption.

Ahead of the summit, Finextra spoke to Mike Hoganson, director, Lynx, at Payments Canada about how innovation and ISO 20022 are shaping Canada's modernisation journey.