Both organizations will reuse ISO 20022 components and will set a template for the banking community in Hong Kong to work together on reviews and standardization agreements.
"In recent years, the financial industry has moved from safe payments to fast payments and is now embracing richer data payments as the world is moving towards Open Banking. In this context, the adoption of a common set of standards, such as ISO 20022, is a necessity to ensure interoperability between systems and reap the full benefits of Open APIs," said Lisa O’Connor, Managing Director, Capital Markets and Standards, APAC.
The effort follows the Hong Kong Monetary Authority's announcement of its Open API Framework. The regulator wanted to facilitate the development of APIs and its broader adoption in the banking sector.
Since the launch of the framework, 500 APIs were made available by the 20 participating banks.
The SWIFT-HSBC effort will allow merchants to set up direct debit authorization and collect consumers' banking instructions. Both companies noted that it will avoid fragmentation on common use cases, speed up and ease API integration efforts, and incremental investment for industry participants. It will also interoperate with the Hong Kong Faster Payment System's (HK FPS) underlying clearing and settlement system by reusing ISO 20022 as a standard.
"At HSBC, we see immense value in defining an ISO 20022 JSON standard and have adopted these standards in our Treasury APIs for collections in Hong Kong," said Nadya Hijazi, Head of Digital, Global Liquidity, and Cash Management, HSBC.