GS1 US Mulls Two-Dimensional Code for Corporate Events

The US chapter of the international standards organization GS1 has proposed using two-dimensional codes to help standardization in the financial services industry, particularly to identify prospectuses and corporate announcements, officials tell Inside Reference Data.

GS1 administers the one-dimensional barcode used in the retail industry, and other standards for more than 20 other industries. The group has a two-dimensional code, the data matrix code, which can store more information than the barcode.

This type of technology could potentially be used to create a corporate event identifier, which firms are required to use to comply with cost basis reporting requirements in the US as of January 2011.

Bernie Hogan, senior vice-president and chief technology officer of New Jersey-based GS1 US, says there are certain examples of areas within the financial services industry, such as corporate actions, where it would be beneficial to see the actual identifier. In these cases, GS1 could offer the data matrix code, its two-dimensional code, and its physical document identifier.

The numeric code can be used for electronic processing and messaging, and the two-dimensional code can be read by devices that can take pictures. "GS1 has a whole family of identifiers," he says.

The use of two-dimensional codes is new to the financial information industry, but GS1 says the proposal has been well-received so far. GS1 standards are already used by the issuer community, and "all we have to do is give them guidance," says Hogan.

"People are starting to see the possibilities here," he says, explaining that the important factor is to ensure market participants understand that this model of standardization exists: "Other industries have dealt with these issues before."

When GS1 first introduced the data matrix technology, it was aimed at the medical device industry, but the use of these codes has since expanded. In fact, two-dimensional codes are now also commonly used for marketing campaigns.

Two-dimensional codes have the ability to store many more characters than one-dimensional codes, and the technology has been evolving, says Hogan. The main change has been the image scanner. "The price has gone down dramatically," he says, explaining that the codes can now be read by smart phones too.