Delivering on the digital destiny
Themes to watch for at Sibos 2019
27 Aug 2019 | Darryl Yu
This year’s Sibos 2019 will focus not only on the excitement and opportunity of increased digitalization in our financial processes but also the hurdles that need to be addressed to further grow the industry. From blockchain to open banking, efficiency will be on the mind of delegates heading to London this year.
SINCE the global financial crisis more than a decade ago, financial institutions have been looking for ways to improve their internal processes. Whether it be transacting payments in real time or validating trade finance documents via blockchain technology, there has been a focus on firms to reinvent themselves.
These were discussed at Swift’s Sibos 2018 conference when members of The Asset’s editorial team travelled to Sydney, Australia last year to investigate the latest trends in financial technology.
This year’s Sibos 2019 will be held in London, United Kingdom and will examine the opportunities and challenges of digitalization in the financial world.
A major theme last year which will also feature at this year’s event was the use of data, specifically how the free flow of information between banks and third-party payment providers via application programming interface (API) can give firms an advantage when figuring out their clients’ needs.
As the holder of large datasets, banks are now being encouraged to share that data with third-party pay providers, such as in the European Union under
PSD2 (Second Payment Service Directive) to help facilitate a digital ecosystem where customer experience is paramount in gauging an institute’s success.
Be sure to also look out for Chinese local banks in London as they start to internationalize and get ready for Swift.
Swift’s blockchain-based payments network gpi has seen 46 Chinese banks sign up as of 2018. Expect Chinese banks to similarly feature this year as they aim to expand their reach and educate foreign entities about renminbi clearing and settlement.
Collaboration will also be examined further at the upcoming conference. Last year, Swift was able to execute a landmark transaction when gpi was able to transmit a payment to Australia’s domestic real-time New Payments Platform (NPP), showcasing the need for various payment infrastructures to work together to become more compatible.
The embrace of technology also brings up issues with cybersecurity. In the 2019 Treasury Survey conducted by Asset Benchmark Research, an overwhelming number of respondents cited concerns with cybersecurity and the safeguarding of sensitive information as the top reason for the slower adoption of mobile banking by corporates.
The reality is that with increased digitalization, financial firms should be ready to ask the hard questions on whether they are prepared for the increasing frequency of a cyber-event. According to the Financial Conduct Authority in the UK, financial services companies reported 145 breaches in 2018, up from only 25 incidents reported in 2017.
To safeguard any future event, service providers are rushing to provide assurances with in-built security features such as biometric, artificial intelligence and machine learning that could overcome challenges that corporates face.
While there may be hurdles when it comes to digital adoption within the financial industry, there is now less room for firms to be complacent. From mobile banking of treasury operations to seamless API connectivity, the future is bright with opportunity.