Other parts of this series:
This week, we are posting our takeaways and impressions from the 2018 Sibos conference, the annual exhibition and networking event organized by SWIFT for the financial services industry.
Sibos has grown into a major forum for the global financial community to meet and discuss topics related to payments, securities, cash management and trade. Thousands of delegates from banking, payments, fintech and related industries have gathered in Sydney for a round of very interesting meetings.
We are struck by the comments made by some bankers that they will not be able to pursue the universal bank model. Rather, they will need to specialize and differentiate themselves from bank and non-bank competitors. Some big banks are renewing and refocusing their interest in corporate banking.
Other bank executives have emphasized that speed is becoming a central element for success, along with internal organization leading to an agile workforce that is curious and willing to be trained and, if necessary, re-trained.
Open Banking remains a topic of concern, with customers seeking openness, transparency and interoperability. Banks are seeking to meet regulatory demands while addressing these customer needs. At the same time, they are feeling pressure from tech and fintech firms creating ecosystem platform business models and competing directly against banks.
All this change and technological innovation is manifesting itself in different ways:
- Instead of being satisfied with separate solutions provided by banks, payment system platforms or agencies, customers are demanding end-to-end digital solutions that can be enabled through ecosystem platforms.
- Retail is a hot area of innovation as opportunities for Open Banking are explored and implemented. But small- and medium-sized enterprise (SME) and corporate banking still have huge potential for disruption through Open Banking.
- Some offerings can generate customer demand, much as Apple did with the iPhone and its AppStore ecosystem. Demand was generated after launch for something people did not realize they needed. Banks should start thinking about generating new customer demand.
- Open Banking can help SME and corporate banking deal with issues of trust and security. For example, ecosystem platforms can be combined with sophisticated, complex authentication processes and know your customer (KYC) identity services. Banks can leverage their expertise to build new end-to-end services with partners.
- Global banks have expertise in being compliant with regulation and have built up a large reservoir of trust with customers. They can be major players in Open Banking and can, in effect, disrupt their own business models.
Global banks are very strong in the region and are experts in being compliant with regulation—this is a strong asset combined with the trust that customers have towards banks. There is huge potential for corporate banks to be players in the Open Banking and ecosystem space, as well and be the disruptor of its own business models.
Moving into Sibos day 2 now—we’ll keep you posted on further developments! In the meantime, take a peek at what else happened during day 1.