IBS Journal November 2016
37
like the Global Payments Initiative. Sberbank Head of Compliance Larisa Zalomikhina stated that banks could potentially “go further working together” to build knowledge and trust. Education and due diligence are also necessary components of successful client relationships, added Deutsche Bank Managing Director of Cash Management, Patricia Giangrande.
Zalomikhina highlighted a data sharing project from Russia as an example of how collaboration can increase overall efficiency: “Our financial intelligence system is going to share information with banks about individuals and legal entities that are involved in suspicious transactions. This will push the compliance costs down.”
The Deputy State Secretary for the Swiss Finance Ministry and Chair of the FSB Correspondent Banking Coordination Group, Alexander Karner, took up the cause of the regulators, adding that compliance does not have to mean a scenario where regulators face off against the private sector. “We are all on the same side here,” he concluded with a smile.
Disruptive tendencies
At the SWIFT Innotribe Centre, which came replete with a 360 degree screen surrounding the seating area (and made it hard to see the entirety of presentations), John Hagel, Co-Chairman for the Center for the Edge and Val Srinivas, Research Leader for Banking and Capital Markets – both from Deloitte – took up the disruption cause. An early
poll discovered the tone of the room – 88% of those in attendance saw disruption as an opportunity, rather than a threat.
Disruption, said Hagel, is already one of the most overly used (and loosest) terms in the industry. According to Deloitte research, it means something that unseats a previously successful incumbent. Firms that want to avoid being hit by newcomers have three major hurdles to overcome: a cannibalisation of their revenue, a significant write-off of assets and a strategic re-think as to what is really making their business successful.
Deloitte, stated Hagel, has identified a number of disruptions that companies in the finance industry need to prepare for. “In medicine, if you’re told you have a propensity for a disease,” he added, “your goals are focused on preventing that disease as soon as possible.”
Even though the pace of change in areas like payments is faster, said Srinivas, there are almost always inefficiencies in banking that can be exploited across the board by new entrants. FX trading has a number of openings. Many products are bespoke and not easily standardised, and some transaction types aren’t even electronic. Customers want better transparency with their prices. The buy-side is going from single-dealer platforms to multi-dealer platforms while large firms still focus all their attention on the former. This is a factor that new entrants can take advantage of.
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