This year, conversations at Sibos were dominated by the changes brought by the digital revolution, AI, the acceleration of real-time payments, and cybersecurity. Here’s a quick report of what I see as the key takeaways from Toronto:
Banks are gaining a greater sense of control around Fintech, learning to adapt to the disruption rather than fear it. SIBOS plenary guest speaker Dave McKay, CEO at Royal Bank of Canada (RBC), explained this mindset shift perfectly, saying, “A few years ago, the talk in the media was all about the potential threat posed by smaller Fintechs and startups in the financial industry. Today’s, it’s much more of a collaborative relationship. At RBC we have some fantastic partnerships with Fintechs – particularly through the work we’re doing in our labs in Toronto, Silicon Valley, and Orlando. We’re completely rethinking how we work, including using agile practices, so we are able to drive innovation more effectively internally, but equally we know we don’t hold all the answers.”
To adapt and evolve, the financial industry understands that collaboration and co-creation are the answer. This was clear in all discussions and presentations. I’ll quote Dave McKay once again: “Within RBC Investor and Treasury Services, we have been running a tremendously successful program (Advanced Client Experience) where we’ve invited our clients in to build new products and platforms alongside our developers to ensure we’re addressing their market needs. This collaborative approach is core to our overall approach to innovation.”
Increasing adoption of blockchain and AI will have a profound impact in the banking world. According to McKay, “…it’s likely that blockchain will fundamentally change how we store money, and AI will do the same to lending and investing. So, given the impact of these transformative technologies, we will have to anticipate, adapt, and evolve further and much faster than we have in the past.”
As Accenture put it, “Change in payments has gone into overdrive, and will only get faster. From digital disruption and the race to innovate to regulatory requirements and customer demands, traditional payments players are being squeezed from all sides. The pressure will not let up.”
SWIFT launched SWIFT Global Payments Innovation (GPI), which aims to transform correspondent banking by delivering same-day payments with transparency and unchanged remittance information across borders. The ultimate beneficiaries of the service are large-volume users such as the International Air Transport Association (IATA), which collects remittances from agents and settles them to 400 airlines across 181 countries and territories, using some 60 banks.
In a recent SWIFT survey, corporates identified real-time tracking from payment initiation to credit and visibility of costs and deductions as their top priorities for cross-border payments. Tom Durkin, managing director for digital channels product management at Bank of America Merrill Lynch, says the current urgency is driven as much by customer expectations as by any regulatory requirement or technology. “As consumers, we expect to be able to closely track deliveries when we order something. Why would payments be any different?”
Learn more at www.axway.com/digitalbanking