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Page last updated
February 16, 2003




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
As an example of a true cross-border project, the Product Development team has been working on the implementation of common SWIFT standards for all members of the Nordea group. The Product Development team, like many others, has achieved this goal despite having relatively little time to spend on getting to know colleagues, their working habits, market practices, etc. The similarities between the Nordic cultures have quite certainly helped in this process.

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
The need for STP is evident throughout the whole industry to enable more accurate, timely and efficient processing of transactions. "I see that there exists a market consensus on the fact that the current 7775 messages have come to the end of the road. They do not help ensure STP for cross-border transactions in the ever changing world of securities markets," Mats Råstedt says.

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
All the members of the Nordea Group - Christiania Bank, Merita Bank, Nordbanken and Unibank - have been actively involved in the preparational work for the implementation of the new ISO 15022 message types and participating in the working groups in the respective four Nordic markets. Country-specific templates have been prepared at the market level and common internal working groups within Nordea have been working on different aspects of the messages and the implementation timetable. Also the possibility of having one common template for all four bank has been considered.


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
Nordea anticipates that many of the large clients will start using the new message types in November. "We have understood that the most active clients will start by a total changeover to the new standards while the other part will use both the old and the new messages at least in the beginning," Mats Råstedt says. The challenge faced by Nordea is to comply with different types of clients' special needs. The transition period will take a year until the new standards are widely in use in November 2002. Until then, flexibility is the key to good client service. Settlement instructions, for example, complying with the old standards will be confirmed with an old standard confirmation. Messages sent with the ISO15022 standards will be confirmed with new standard messages. "Clients do not need to make the switch from old to new messages should they receive the instructions from a third party. They want the message to flow through their systems straight into ours," Mikko Numminen says.

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.


Anders Löfgren
Head of Custody Services Sweden
Head of Product Development
Nordea Custody Services


Mats Råstedt
Head of Product Development Finland
Nordea Custody Services


Mikko Numminen
Head of Client Relations Finland
Nordea Custody Services


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