Highlights from Sibos: The banking industry trends on-the-go

Rich Williams: Every year, thousands of delegates descend on the Sibos conference to understand what upcoming trends are going to be leading the banking and finance industry over the next year. This year's Sibos event was no different, apart from the delegates flocking to their laptops rather than a physical conference centre. Hello, I'm Rich Williams, host of the Payments. If you haven't guessed it already, today's episode will frame the top trends from Sibos and how my guests see them affecting the future of payments. With me today is Ed Adshead-Grant, General Manager of Payments, and James Richardson, Head of Market Development for Fraud and Risk at Bottomline, respectively. Gents, thank you both for joining me today. Both regular attendees of Sibos, of course, and returning guests on the channel.

Ed Adshead-Grant: Thanks, Rich.

Male 2: Thank you, Rich.

Rich Williams: Ed, let's start with you, please. What are your top three highlights from this year's Sibos event?

Ed Adshead-Grant: Thanks, Rich. Yes, top three highlights, well, I have to start with the whole experience. It was very different this year, our first ever digital Sibos. Overall, I think SWIFT took up the challenge and did as best they can with the conditions that we have with this global pandemic. My thoughts on it are there are limits to what can be done in our big world of digital transformation. I know a lot of my peers in the industry really missed the networking, the deals that get struck, the new meetings that we hold with new ideas, new product releases. It was just a lot quieter. I found myself watching the screen a little bit like YouTube for the whole week and certainly missed Franco's coffee down at the HSBC stand. Looking forward to Singapore, and let's hope that we're all together and we can enjoy a Sibos in person next year.

James Richardson: I agree with Ed. I think that SWIFT did a pretty good job of turning this into a pure digital conference. I think they really embraced a wider audience that perhaps wasn't the same audience as what would normally attend Sibos. I think Sibos was probably a bit more accessible this year to all levels of seniority within organisations. I think the session certainly reflected that, that there were some more practical and tactical discussions and sessions, as well as some of the more strategic ones.

Rich Williams: On that point, there was some mention of the SWIFT strategy, was there not?

Ed Adshead-Grant: Yes, there was. Probably that's the second highlight I would want to mention, Rich, which is a big announcement from SWIFT around moving their strategy from being a messaging platform into a transaction management platform, which there are only a few words changed in that sentence, but actually that's a massive transformation, built on the success of the gpi innovation. SWIFT are looking at the new world of APIs and how to operate and to help their community of banks and corporates. They've realised that things need to move onto the next stage. It's an ambitious, complex programme based on the ISO 20022 standards and this gpi foundation I mentioned. We look forward to supporting that and finding how we work as a community to make that a success. The team actually quoted two years to get that transformation done, which I think is very ambitious. As I speak to our customers, I don't think anyone really sees it as a two-year-and-done programme, but it is a step in the right direction. My thought is they need the big hairy gorilla type to project manage that one just to get the milestones on time over the next few years.

Rich Williams: Okay, so we've had two highlights from you there, Ed. What about your third one, please? Then we'll move onto James for his final two.

Ed Adshead-Grant: The third one that comes to mind is the cross-border payments and how big a problem that is in the industry globally. It's great that Bottomline and others are tackling that big industry problem. We like to take on the big challenges. You've got £150 trillion in the cross-border payment channels at the moment, estimated to go up to £250 trillion by 2025. The G20 have become involved this year. They've put out their reports to see how can we do it better, because it is directly linked to the GDP of various countries. They've come up with 19 building blocks that have been published and there are 5 new key themes that have just come out that we're studying around data harmonisation and global coordination.
I didn't know actually that 60% of cross-border payments still need manual intervention. That's a huge exceptions processing problem. We're very busy with that area. We launched another podcast, the Visa B2B Connect podcast, where we've been investing with Visa to take a new cross-border payment solution to market to solve many of these problems.

Rich Williams: That's quite right, and listeners can find more information there using the usual platforms. James, we've looked there are digital Sibos, SWIFT strategy and cross-border payments. Any reflections on what Ed has been through so far?

James Richardson: I think Ed has nailed the highlights really. Linked to those points is the underpinning of cloud acceleration, just wanting to move to this new world a little bit quicker. I think there's that desire to want to make it happen as soon as we possibly can, with the backdrop of the reality check that actually this thing is going to take a little bit of time. (Laughter) There is absolutely an overwhelming desire to want to accelerate. I think the COVID situation has encouraged us all to think a little bit differently about how quickly it is possible to accelerate in areas where we'd previously thought it was pretty hard.

Rich Williams: Any comment specific to what's happening with fraud at the moment, James?

James Richardson: Yes, so I looked quite deeply at the fraud and compliance areas of Sibos this year and I think my takeaways are we, as an industry, continue to go into the right direction with improving defences, but I was pretty shocked actually as to the stats that were flying about regarding how heavy the fraudsters have attacked as a result of the COVID pandemic. IBM I think were quoting a 4,300% uplift in cybersecurity events since the start of COVID. That is unbelievable. I attended a number of sessions that all talked about pretty sensational uplifts in attacks or attempts, fraudulent attempts around the world.
Yes, we're all moving in the right direction, but this is not stopping or slowing down, and we've got to remember that. This COVID situation is seen as a pretty strong opportunity for cyber fraudsters and we would do well to remember that, that running pretty coherent businesses and we've got to make sure that we're really aware of the latest trends. I attended some really good sessions. I was quite interested to see that some of the highest risk areas for victim banks are Africa, South Asia, followed by Southeast Asia, Latin America, Europe and Middle East. They're all still medium risk. They're the victim banks, but the locations of the beneficiary banks are different. The highest risk area is the funds they're moving through into Asia, followed by Western Europe and Middle East. That information is pretty fluid, but it was good to understand that that's actually being tracked and it's important for the audience to really learn, both from us and from other sources that they find helpful to make sure that they've got the right level of defence mechanisms in place.

Rich Williams: Thank you, James. What other highlights did you take away from this year's Sibos event?

James Richardson: The other piece outside of fraud is around compliance. There is a growing undercurrent of conversation in ISO 20022 and how it can improve sanction screening, real-time sanction screening. There were two aspects in a number of discussions. It was really pleasing to see. One is data is king. The reference data for comparing transactions in flight is just so important, to make sure that it's as good as it can be. The second is linking to the ISO 20022. I didn't see this everywhere I went, but I did see this in a few sessions, that embracing ISO 20022 is an opportunity for compliance and risk officers to really improve their business, their area of the business.
I think that was really good to see as an organisation like Bottomline that's in this space and sees a lot that moves in the industry. I was delighted to hear the words 'last mile', which is about protecting the last mile of payments and how ISO 20022 as a change in the payment landscape is actually going to change how compliance officers and fraud officers are going to deal with fraud in the future.

Rich Williams: Thank you, James, and your final highlight, please.

James Richardson: Okay, so final takeaway for me, Rich, I think just to conclude, the Sibos event itself was a bit of a challenge, I guess. It was good that it was all digital, but gosh, I missed that people interaction. I think the guys at SWIFT did a pretty good job. I'd really encourage the audience to lift up and think about some of these main industry events that are coming their way. It's going to affect them, and the sooner that they can really get their heads round what's coming, whether it's within the next six months or within the next couple of years, it's definitely worth looking at now and starting to plan for 2021.

Rich Williams: Quite a stark finale there from James. Ed, any final comments before we close out the show?

Ed Adshead-Grant: I think a final thought, Rich, is actually my faith has been restored in human nature. Although we do talk about all these digital transformations and platform changes, there is a human side to Sibos that is absolutely fundamental. No matter how much artificial intelligence and machine learning we plan in our roadmaps and bring to the industry, nothing beats getting together to talk through some of these problems and sorting through the answers and enjoying one of those coffees at Franco's stand?
Rich Williams: Thank you, Ed and James, for both of your insights today. I think you've both shown that even though this year's event was entirely virtual, based on the conversation we've had, it was certainly an educational one, as ever. Now, although Sibos will be continuing once a week until March, it's always good to get your views directly after that full initial week's event. Hopefully, Sibos 2021 will allow for delegates to convene in a physical location once more. We will be recording another show to discuss some of the highlights from Sibos very soon with our very own Marcus Hughes, but unfortunately that's all we have time for today. In the meantime, as ever, you can listen to more episodes and all things payments at the touch of a button using your preferred provider. We'll see you all next time.