Sibos 2019: takeaways on the future of banking

Sibos 2019 has now closed its doors but its echo will resonate for months! This year, the leading payments conference focused around the theme “Thriving in a hyper-connected world” and brought together experts from all over the world. While we prepare for the next key appointments of the year, including Singapore Fintech Festival, we captured here the main takeaways of this incredible gathering.

Banks get it: the payments landscape is changing

What emerged quite clearly at Sibos 2019 is that banks know exactly what the different pieces of the puzzle are. All financial institutions are aware of the changing landscape and that payment initiatives, like ISO 20022, RtP, and Instant Payments, will impact them in the future. At the same time, they all understand that instant payments and Open Banking are just rails and as such, it won’t be possible to leverage them unless the right level of overlay and added-value services are provided.

Another piece of the puzzle that is widely recognised as critical is the key role of “responsible innovation”. Banks are the main guardians of their customer’s privacy and money, and have, therefore, the responsibility of protecting them and making sure they are safe from cyber criminals, fraudsters and similar. On this note, all the banks’ representatives attending Sibos 2019 also agreed that they see cloud solutions in their future as these will allow them to meet resilience and performance requirements as well as enable interoperability and support faster and safer AML, KYC and sanctions scanning systems.

Last but not least, all the financial institutions know that data is liquid gold and that they are sitting on a potentially untapped treasure of fragmented data. Banks need to glue the pieces together to truly understand their customers and create added-value services and the solutions that their customers really want and need.

As a result, all the key financial players recognise the need for more collaboration. They understand that they cannot do it on their own anymore and that it is time to carefully choose the right partners that will allow them to achieve their vision. Likewise, global standards will act as the key driver for frictionless and cheap connections with business partners. All the attendees of Sibos 2019 agreed on declaring global standards as the key to access new markets with minimal effort.

“Dubito, ergo cogito, ergo sum”: the key to the future of banking

In 1637, the French philosopher René Descartes coined the dictum “dubito, ergo cogito, ergo sum” (I doubt, therefore I think, therefore I am). Never has this aphorism been more relevant.

While all banks understand the challenges and opportunities brought by the wind of change in the payment services arena, choosing and puzzling together all the right pieces is often found challenging. Every day new pieces are added to the puzzle, others don’t fit, and others again change shape. Banks that want to be relevant cannot afford to think that a vision rooted in their past convictions and built in isolation is the way forward. The future of banking is for those players who dare to doubt, think, take a step back and change direction where required. Banks must push themselves to create their vision and solutions together with their customers and all the players across the departments to ensure the right outcomes for each innovative initiative.

To this end, banks will have to create an agile environment that allows to fail, learn fast and shift gear when required. This will be key for all banks worldwide as the speed of change in payments is still increasing. As an example, think about Swift’s intentions to schedule multiple ISO20022 releases every year. Banks without an agile delivery model will not be able to cope with this.

This environment should also foster collaboration with third parties. The market is changing at a dramatic speed and a vast number of new players are emerging, making some of the ‘old’ new players already obsolete. This means that banks will need to keep up the pace and create an ecosystem to connect with those third parties that are relevant to their customers.

Just because you don’t see it, it doesn’t mean it’s not there…

The future of banking is shaped by two opposite but complementary tensions. On one hand, several pieces of this incredibly vast puzzle, like Open Banking and Request to pay, are created to make banks more invisible. In fact, the more invisible the payments become, the more value they will generate for the final customers.

On the other hand, banks are challenged to be more visible and transparent as well as more forward-looking. With the numbers of financial players multiplying in the market at incredible speed, banks cannot afford to be blind in front of the threats and challenges represented by the change in the payment services industry.

Just because you don’t see how these pieces will influence the future of banking, it doesn’t mean they won’t. Just because you don’t see the risks associated with them, it doesn’t mean you will be spared.

Having the right expertise on your side will help you to see what the future holds and to tap in your gold mine of data. Every day, RedCompass Labs team brings the unknown to the spotlight. We put our payments, financial crime and core banking expertise at the service of our clients to enable them to understand and see through the hot topics in the market (ISO20022, Open Banking, Instant Payments, Request to Pay, crypto-currency, etc.). If you struggle to see what is hidden behind this puzzle, please reach out to us. We will help you to glue all pieces together and create a frictionless, cheap, fast, “Invisible” payment journey for your customers.