About Us | Search | FAQ | Contact Us
ISO 15022; A Nordic view
The Nordea Group has been established on a shared vision of being the leading financial services group in the Nordic and Baltic Sea region. Nordic Baltic Holding, comprising then of Merita Bank in Finland, Nordbanken in Sweden and Unibank in Denmark was renamed Nordea in the year 2000. During the same year the vision came a step closer when Christiania Bank og Kreditkasse in Norway became part of the group. While strengthening its position in the Nordic market, Nordea has expanded its presence in the Baltic countries and Poland.
The name Nordea stands for Nordic Ideas. In the Nordic countries, people are similar enough to co-operate and different enough to learn from each other.
Nordea Custody Services is a recently formed Nordic cross-border unit. The challenge has been to integrate four banks, four cultures and four infrastructures into one organisation. Though the integration is still ongoing, the end result will be a solid pan-Nordic Custody organisation, built on client values and the competencies of experienced personnel.
The synergies to be gained through pooling resources and sharing knowledge on a pan-Nordic level are there to be exploited. In the new organisation cross-border teams focusing on individual functions have been established. Representatives from all four countries actively work together in Product Development, Operations, Network Management and Client Relations with a Nordic context.
The Nordea Group was completed with the acquisition of Norway's Christiania Bank less than a year ago. Even though the integration of different cultures takes time, the numerous projects ongoing in the Custody organisation have provided a good opportunity to bring the employees closer together. The idea of adopting the best practice through exchanging ideas and working methods between the different cultures is implemented throughout the Group.
A true cross-border project
The SWIFT ISO 15022 project is one of the biggest revolutions to face the custody industry. From Nordea's point of view major challenges in the past few years have been the adoption of euro in the securities industry in the EMU area, the Y2K project and now the new SWIFT standards. The adoption of the single currency was an extensive task for the bank, the turn of the century was more of a non-event, but the ISO 15022 standards will change the entire nature of the industry by leaving a mark in the whole securities process and significantly improving straight-through-processing rates. What will come next: CCP, T + 1?
STP is now a must
As the volumes for cross-border transactions have significantly increased, STP can no longer merely be seen as a preference, it is now a definite must. "STP has to be achieved in order for the business to run smoothly and for the market players to be able to handle increasing and fluctuating settlement volumes. The ISO 15022 standard is an essential tool to meet this demand," Anders Löfgren says.
"It took a while before the ISO 15022 project gained some speed. The standards have been there for years, but until SWIFT clearly stated the definite deadline of November 2002, not much was being done," Råstedt says.
Common standards throughout
the Nordea Group
After reviewing the situation carefully and taking into account the received client feedback, it was decided that all the Nordea Group members would implement the new instruction, settlement and reconciliation messages with the 2001 standards release.
"Our common plan is to have the messages implemented as from November 2001 in all countries. When feasible, common guidelines for STP are to be agreed for all four markets, benefiting all clients in having one common standard instead of four," Mats Råstedt says.
"We started the project with the same principles in each country. Even though we have four depositories, four exchanges and four currencies, our aim is that the clients see us as one," he says.
The starting point was not to focus on converting the existing fields to comply with the new standards, but rather to begin right from the start by creating new messages. This strategy was chosen even though conversion software on sale was plentiful.
"We feel that this starting point, even though it has required a lot more work than the alternative, guarantees a better end result. We can achieve higher straight-through-processing rates, more efficiency for settlements not to forget the fact that this solution in its flexibility facilitates changes to the current specifications," Råstedt says.
To ensure a smooth outcome, the product development team set out to produce new templates, which were then fitted together with the templates of clients. A lot of effort was put into this during the course of the project. According to Råstedt, a good result was also achieved even without any major difficulties.
Nordea has been actively involved in Market Practice Groups in all four markets. Also, the Network Management Forum provided help to the workload by facilitating the coordination of the project world wide, the timetable, not to mention giving a forum to discuss current matters and exchange ideas.
For a sub-custodian, straight-through -processing is a good cause, but there are also some threats which may result in creating too much discrepancy among the messages used by the various participants. SWIFT has provided us with the most important guidelines on how to develop our systems but one might have hoped for more strictness in defining the standards. Another threat, which can be foreseen is that the once nearly extinguished field 72 is again reborn in more numerous forms. Free format fields are now plentiful and cannot be straight through processed. In addition to this, many of the financial institutions seem to develop their own standards close to the minimum requirements set by SWIFT.
The Market Practice groups have naturally clarified the situation within the ways in the local markets, but as each country still has its own market practice, a lot of variations still exist. As Mikko Numminen says, "As a Client Relations Manager, I feel no envy of our Network Managers, who must comply with a wide range of different markets and market practices."
Flexibility is the key
The timing of the ISO 15022 project was in the end a favourable one for the banks of the Nordea Group. The integration process was still ongoing, organisational changes were underway. "The Product Development team gathered their forces and began on a joint venture which turned out well. We trust that the good outcome will be shared also by our clients," Anders Löfgren says. The Product Development and Client Relations teams are looking forward to a successful year and fruitful cooperation with clients during the whole transition period and during the individual transition periods of clients.
|Home | About Us | Search | FAQ | Contact Us|