As mentioned in our first blog, we have been attending sessions at Sibos in Sydney and are providing our thoughts about trends we are seeing here.

The Tuesday sessions were very impressive, with banks and partners well-represented.

We attended meetings with the heads of transaction banking at several world-class banks, in which three major trends around business growth were identified:

  1. There is an upsurge in creative activity as it relates to strategy—and this is due directly to the impact of digital technologies
  2. Disruption of current operating models continues
  3. Banks are more willing to share investments and risks, either via consortiums or through co-innovation

Strategic creativity is playing out in multiple ways. We had exciting conversations about the options for banks to develop completely new services, to provide white-label solutions to third-party platforms, and to develop partnerships with software players, enterprise resource platforms (ERPs) and other non-banking players.

We also see an increased focus on clients’ needs (or potential needs), along with a recognition that current organizational models do not necessarily facilitate a client-centric view. Too often, businesses are still organized as silos surrounding specific products; they may not report to the same divisions and do not encompass an end-to-end view.

Our conversations about operating models were especially rich. Bankers are now testing new approaches, and two of the most interesting were:

  • Repositioning the business as the owner of the front-to-end process, including back offices and sometimes IT. This is a very bold approach in terms of allocating budget to the businesses. On the other hand, initiatives such as Open Banking, digital factories or AI factories are increasingly centralized to optimize investments and share talents and culture.
  • Evaluating business outsourcing for non-core activities (or for activities which lack scale) using various formats ranging from pure outsourcing to operate-build-transfer to a one-to-many outsourcing model.

Consortia and co-innovation are now established ways of working, especially in the trade finance world. The recent announcement of the WeTrade and Voltron merger and of the creation of the Trade Information network are examples of the vitality of the consortium approach, organized either around a group of selected banks or around a major player in the industry. Software companies are all active in either supporting or gathering banks around software as a service (SaaS) solutions and most consortia are testing next-generation technologies such as blockchain.

Co-innovation is also on the rise, with the announcement of joint proofs of concept and live solutions by banks in relation to software providers, by consulting service players, and by software providers and others. Such approaches enable sharing of investments and risks, but also the cross-fertilization of talent and ideas.

We will continue with a report on Wednesday’s exciting panels and roundtables. For now, here’s a video featuring day 2 happenings at the show. Enjoy!

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