How can we gauge industry appetite to deploy blockchain for cross-border payments. The overall tone of the Sibo 2016 discussion on open banking and open APIs reflected the fact that banks see positives in the development, but they are.
KEY TAKEAWAY #2
Cybercrime – like regulation – is a fact of life to be managed, but for both, there are technology solutions to help
HIGHLIGHTS
The mood around cyber was pragmatic: innovate to get the problem under control
A number of new technologies can be applied to address both the cyber and the compliance challenges – Cyber and regtech are additional drivers for collaboration between banks and their partners
The first is about the banks: how can we help them further strengthen their protection. Swift will oversee a rationalization of the use of its existing relationship management application (RMA) tool — used by banks to authenticate who they're dealing with through Swift — to make it more efficient, he says. The co-op will also introduce a new data report that will allow banks to match their data with Swift's to identify anomalies.
This is about sharing information about what is happening in each environment.
Fintechs and regtechs are there to help us move from big data to smart data, and to be more nimble and more agile.”
We have defined a certain number of actions that they will need to take to ensure that their environment is fully protected,” he said, and this will include operating with the latest release of software to access Swift. They will also need to ensure that their protection is known to their counterparties by fulfilling a program of self-certifications, he continued. The second pillar revolves around banks' counterparties, Raes said, and here there are different ways to "attack the problem" - "before the event, after the event and finally on the fly".
In that context, a number of technological solutions were identified as having the potential to help.
Mathieu Maurier, Global Head of Sales and Relationship Management, Societe Generale Securities Services
TRANSFORMING THE LANDSCAPE: FINEXTRA'S INSIGHTS FROM SIBOS 2016 Of course, Swift used Sibos to promote its new customer security program, 13 which, as Alain Raes, CEO, EMEA and Asia-Pacific, Swift told Finextra, revolves around three pillars was built. Eventually, Swift could also introduce a mechanism to monitor and query transactions on the fly, he said, in a similar way to credit card checking systems that look for irregular card use. Swift already does this, but we'd like to find a way to do it all together, and eventually have a data repository where we can store the information.”
Fintechs and regtechs are there to help us move from big data to smart data and to be more nimble and more nimble.”
WHAT THEY WERE SAYING ON TWITTER…
We intend to apply cognitive computing to cybersecurity as well, and predictive analytics to the stability of our operations,” he continued. In the same session, David Geale, Director of Policy, Financial Services at the UK's Financial Conduct Authority (FCA), described how regtech could be applied to address "some pretty intractable problems". He also suggested that a number of advanced technologies could be applied to simplify the compliance challenge.
There is certainly a lot of room for global organizations to work with fintechs and regtechs to become more compliant.
KEY TAKEAWAY #3
Blockchain is STILL a buzzword and the subject of hype, but the technology is maturing and the industry has made progress in determining its applications and in beginning to prove its value
Blockchain is still more talked about than used but despite some fatigue, the excitement remains – Use cases are coming thick and fast and will help drive adoption ‘niche by niche’
Collaboration will be critical to bring blockchain potential to fruition
There was still a lot of excitement about blockchain at Sibos - Ginni Rometty, chairman, president and CEO of IBM, made much of this point during her keynote at the event when she said that "blockchain will do for transactions what what the internet did for information" - and rightly so, given the value it will bring in terms of streamlining processes and associated cost reductions, as Falk Rieker, Global Vice President, Head of Global Banking IBU, SAP pointed out. Blockchain is huge factor and can improve some business models that have existed in the industry for quite some time. Some of these use cases are now very well known - trade finance, post-trade securities, cross-border payments, syndicated lending, KYC - but others have also emerged in Geneva.
Blockchain is a huge enabler and what it can do better are some of the business models that have been around in the industry for a while.
Blockchain is a huge enabler and what it can make better is some of the business models that have existed in the industry for quite some time. Using this really exciting
It's a pretty significant move forward and I think this discussion is now on a more balanced basis than it was a year ago." Regardless of what you think about blockchain, the last 12 months have been pretty amazing," he said. Using this really exciting technology, banks like ours started thinking, what are the really interesting customer propositions we can bring to the market to help our customers do business in a much easier way?”.
Opportunities are emerging in areas such as gold clearing and OTC clearing, activities that are highly paper intensive.
Gautam Jain, Global Head, Digitisation & Client Access, Transaction Banking, Standard Chartered
The technology is not mature enough and the volumes and the number of players you will have to engage will be a challenge. HSBC, said: "Live examples are going to be important - but collaboration is going to be key. This regulatory aspect was discussed at length during the Blockchain 2020 session, which also touched on some other key questions that remain.
While it may not exploit the technology at its purest, Chapman was absolutely clear that blockchains will need to be allowed in this industry.
KEY TAKEAWAY #4
Artificial intelligence is set to have a major impact on financial services and it and other leading edge and emerging technologies demand attention, experimentation and exploitation
AI and other technologies forming part of cognitive computing promise greater efficiency, easier compliance and competitive edge
To leverage these innovations banks need to optimise their core systems
These emerging technologies are more powerful together than separately, and in the ecosystem rather than individual banks alone
The important thing about data is not how much data there is or how we process it, but what we do with it, and we're finding early glimpses of really exciting use cases. We've applied them in a variety of spaces and found it very useful for taking a lot of repetitive automated tasks away from humans and doing them in a systematic way in the background. We're applying these to sales and research, and we're looking at applying them to different parts of operations.
At the moment, the types of bots we're working with are process automation bots – we're taking an existing process that's repetitive, manual and tedious.
So will bankers be confronting robots and artificial intelligence? Yes. Definitely
No matter how good you are, you can't catch up to that question – you need help.” In the past 12 months alone, we've literally doubled our big data nodes across the business, and that's just the beginning. So the machines are able to come up with early indicators, here are the top 10 lists of companies you should think about.
In the future, more and more machine learning bots will be built that will help us communicate with our customers in a more intelligent way.”
Alexandre Gaillard, CEO and Founder, Invest Glass
Let the robots do the dirty work and we can concentrate on the human part of our job.” As a global financial services organization, we have access to a vast array of highly complex, disparate data, so tools that can help us harvest that data and provide some of the complex analytical calculations on it give us an opportunity as a provider of securities services to add value to our clients,” he said. Data, data analytics and big data technologies are relatively well developed and we have lots of meaningful conversations about how to use that data to provide real insight and value to our customers.”
If you think about the end-to-end processes that we do, there are several stages in this development where we require authentication of instructions, whether with a wet signature or digital encryption - and I think the concept of biometrics for authentication of instructions is increasingly something. which could actually develop and become really important for our industry."
You need an agile, scalable, open architecture, optimised for data to deliver innovation and new value and services to your customer.”
Alexandre Gaillard, CEO and founder of Invest Glass, described it as "the open door - or perhaps the closed door - to the knowledge economy". That said, the challenge of adopting these advanced technologies should not be underestimated, and there are some prerequisites. You need an agile, scalable, open architecture, optimized for data to deliver innovation and new value and services to your customer.”.
You need an agile, scalable, open architecture, optimized for data to deliver innovation and new value and services to your customer.”.
Mike Blalock, General Manager – Financial Services Industry, Intel
As Andy Hirst, Vice President, Banking Solutions, SAP, noted, “The technology has a very broad scope, from predictive analytics to AI and cognitive computing, so banks need to figure out where they are on that maturity curve and work with the pieces that go helping them on that particular journey.” Banks also need a real-time data platform to exploit this technology, Hirst added. Fintech means to me and to most of my colleagues and clients that I have a partner, a partner that is going to help me deliver products and services faster, more efficiently and at a lower cost to me and therefore at a lower cost to my clients.”. Machine learning has blossomed again – and its seeds are spreading to the financial services industry http://bit.ly/2a46RXu #Sibos.
We will see a shift to biometrics to help authenticate customers and help prevent future cyber attacks, which will be a huge game changer.
KEY TAKEAWAY #5
Customer experience is key: consumer expectations are shaping corporate demands, and banks must break down the silos and collaborate to deliver relevant, meaningful innovation to their clients
Corporates want experiences to match those they are used to in their personal digital lives – Banks need to listen to and work more deeply with their corporates to determine their needs
Organisational and cultural change – and partnering with fintechs – essential to optimise customer experience
Retail is experientially a couple of generations ahead of what corporate customers expect – and payments will now be forced to catch up to the postscript level,” says Dan Marovitz, European Head of Earthport. It's the experience of the internet, it's the set of expectations set by the internet - and really the consumer experience in retail - that's going to drive the payments industry to modernize at a pace that hasn't really been seen before." Erik Zingmark, Co-Head of Transaction Banking, Nordea, also highlighted the influence of consumer customer experience.
They expect omni-channel, 24x7, richer information, simpler solutions, and the way the banks have to respond is first and foremost to listen to the customers – not just the corporate customers and the financial institutions, but the consumers, because the consumers have a very strong position in the decision on next-generation technology.
Moving into a real-time world will require banks to look at the overall end-to-end provision of service and drive a lot of banks to look at their core systems and at
SHAPING THE LANDSCAPE: FINEXTRA INSIGHTS FROM SIBOS 2016 25 Banks are being forced to rethink the customer experience for their business customers, in part due to the revolution in customer experience in the consumer world. The experiential gap between buying a digital good and expecting the payment to come when it does – that doesn't really work anymore. Regardless of the impact of consumer experience, another challenge for banks in the enterprise banking space is that business needs are different from consumer needs – and they vary from business to business, according to Ebru Pakcan, head of global payments for the treasury and trade solutions business at Citi, emphasized.
Therefore, what is very important is to be able to understand what the customers' true needs are, and to be able to innovate around that end-to-end offering rather than just a trying to do cookie cutter solution. "
Laurence Leyden, General Manager, Financial Services, EMEA, SAP
Many businesses put a lot of emphasis on information because they need to send it back to their customers and suppliers and counterparties, so it could be argued that the speed at which payments are made is often not that important to the business and information can be much more important, " she said. Similarly, when it comes to fees, transparency is often a more important phenomenon for businesses than the pure or absolute fee. Moving into a real-time world will require banks to look at the overall end-to-end -offering of services and causing many banks to look at their core systems and at.
Core data is universal; the secret lies in knowing what the customer wants and doing it in real time #Datamanagement,.
SIBOS
We are also moving into a world that is much more connected, and where relationships will be much more fluid, and there will be a need to look at how these are protected. The dialogue is totally different, and that in itself is a big cultural change,” he told delegates. It's facilitated by APIs, the cloud, distributed ledgers and so on, but it's really interesting to see that when it comes to delivering a service to a customer, we're becoming more and more agnostic about whether we produce it and do we just supply or obtain it from someone else who is a better supplier of it.
When that comes together, we're going to see some really exciting results for customers,” he said.
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