Chapter 3: Data Formats & Standards

The Importance of Standard Formats

Financial data exchange requires precise, unambiguous formats that can represent complex transactions, account structures, and regulatory information. This chapter explores the major data formats used in modern financial services.

JSON (JavaScript Object Notation)

JSON has become the dominant format for web APIs due to its simplicity, human readability, and native JavaScript support. It's widely used in open banking, fintech APIs, and mobile applications.

Advantages of JSON

Lightweight and easy to read
Native support in all modern programming languages
Flexible schema-less structure
Excellent tooling and validation support (JSON Schema)

{
  "transaction": {
    "id": "TXN-2025-001234",
    "type": "PAYMENT",
    "amount": {
      "value": 1500.00,
      "currency": "EUR"
    },
    "debtor": {
      "name": "John Smith",
      "account": "DE89370400440532013000"
    },
    "creditor": {
      "name": "ACME Corp",
      "account": "GB29NWBK60161331926819"
    },
    "timestamp": "2025-12-25T14:30:00Z",
    "status": "PENDING"
  }
}
            

XML (Extensible Markup Language)

XML remains critical in financial services, particularly for regulatory reporting and legacy system integration. Its verbose structure supports complex validation and transformation rules.

When to Use XML

Regulatory reporting (EMIR, MiFID II)
Complex document structures with mixed content
Legacy system integration
When XSD validation is required

ISO 20022

ISO 20022 is the global standard for electronic data interchange between financial institutions. It provides a comprehensive dictionary of business concepts and a methodology for creating message standards.

Key Message Types

Message Type	Description	Use Case
pain.001	Customer Credit Transfer Initiation	Payment orders from corporate to bank
pacs.008	FI to FI Customer Credit Transfer	Interbank payment messages
camt.053	Bank to Customer Statement	Account statements and transaction reports
pacs.002	Payment Status Report	Acceptance or rejection notifications

<Document xmlns="urn:iso:std:iso:20022:tech:xsd:pain.001.001.03">
  <CstmrCdtTrfInitn>
    <GrpHdr>
      <MsgId>MSG-2025-001</MsgId>
      <CreDtTm>2025-12-25T14:30:00</CreDtTm>
    </GrpHdr>
    <PmtInf>
      <PmtInfId>PMT-001</PmtInfId>
      <PmtMtd>TRF</PmtMtd>
      <ReqdExctnDt>2025-12-26</ReqdExctnDt>
      <Dbtr>
        <Nm>John Smith</Nm>
      </Dbtr>
    </PmtInf>
  </CstmrCdtTrfInitn>
</Document>
            

FIX Protocol

The Financial Information eXchange (FIX) protocol is the global standard for electronic communication of securities transactions. It's used by virtually all major stock exchanges, brokers, and institutional investors.

FIX Message Structure

FIX messages use a tag=value format with pipe delimiters. Each field has a numeric tag that identifies its meaning.

8=FIX.4.4|9=165|35=D|49=SENDER|56=RECEIVER|34=1|52=20251225-14:30:00|
11=ORDER-001|21=1|55=AAPL|54=1|60=20251225-14:30:00|38=100|40=2|44=150.25|10=123|

Field Breakdown:
8=FIX.4.4         (BeginString - Protocol version)
35=D              (MsgType - New Order Single)
49=SENDER         (SenderCompID)
56=RECEIVER       (TargetCompID)
55=AAPL           (Symbol)
54=1              (Side - Buy)
38=100            (OrderQty)
40=2              (OrdType - Limit)
44=150.25         (Price)
            

Common FIX Message Types

Type D: New Order Single - Submit new order
Type 8: Execution Report - Order status update
Type W: Market Data Request - Subscribe to market data
Type X: Market Data - Snapshot/Full Refresh
Type F: Order Cancel Request - Cancel existing order

ISO 8583

ISO 8583 is the international standard for card-originated financial transaction messages. It's used by virtually all ATM and point-of-sale networks worldwide.

Message Structure

ISO 8583 messages consist of three main parts:

Message Type Indicator (MTI): 4-digit code indicating message purpose
Bitmap: Indicates which data elements are present
Data Elements: Up to 128 fields containing transaction details

MTI	Description	Usage
0100	Authorization Request	Card present transaction authorization
0110	Authorization Response	Approval or decline from issuer
0200	Financial Request	Transaction that impacts account balance
0220	Financial Response	Response to financial request
0420	Reversal	Undo a previous transaction

SWIFT Messages

SWIFT (Society for Worldwide Interbank Financial Telecommunication) operates two main message standards: MT (Message Type) messages and MX (XML-based ISO 20022) messages.

MT Messages

{1:F01BANKUS33AXXX0000000000}
{2:O1031234251225BANKGB2LAXXX00000000002512251234N}
{3:{108:PRIORITY MESSAGE}}
{4:
:20:REFERENCE123
:23B:CRED
:32A:251225USD1500,00
:50K:/DE89370400440532013000
JOHN SMITH
123 MAIN ST
BERLIN
:59:/GB29NWBK60161331926819
ACME CORP
456 HIGH ST
LONDON
:70:INVOICE PAYMENT 12345
:71A:SHA
-}
{5:{MAC:12345678}{CHK:123456789ABC}}
            

Migrating to MX Messages

The financial industry is gradually migrating from MT to MX (ISO 20022) messages. The benefits include:

Richer data content and structure
Better support for compliance and regulatory requirements
Improved straight-through processing (STP)
Enhanced data quality and validation

Format Selection Criteria

Format	Best For	Avoid When
JSON	APIs, mobile apps, web services	Complex validation rules required
XML	Regulatory reporting, complex documents	Performance is critical
ISO 20022	Interbank payments, cross-border	Simple internal processes
FIX	Securities trading, market data	Banking or payment use cases
ISO 8583	Card transactions, ATM networks	Non-card payment methods

Understanding these formats and when to use each is essential for building robust financial data exchange systems. In the next chapter, we'll explore how to secure these data exchanges.