IBS Journal November 2017
33
There was plenty to discuss at Sibos 2017 in Toronto, and the biggest subjects of debate were much changed from previous events
when banking was just about banking, but now you can look at the backgrounds of some of the players in these tech-based financial ventures – Amazon Lending, Facebook Finance, PayPal. You’ll see much greater diversity in education, work experience and personality types.” If banks continue to hire the same people, they will continue to cycle around the same vendors, the same providers and the same ideas, she argued.
Incremental innovation won’t solve the problem, either. Banks aren’t competing against other banks anymore – as they have been doing over the past 300 years. It’s a whole different ball game for them now. This is where the implementation of APIs and open banking comes to the forefront. It was almost impossible to speak to anyone at Sibos 2017 without the mention of open banking and APIs. As with most new hype-heavy terms, there were evangelists and there were sceptics. One delegate mentioned to IBS Journal that the whole thing reeked of the centuries-old risk-adverse strategy that banks have held on to with both hands; if you cover your rickety core banking system in APIs then you can stave off the march of time for another five years and not have to think about replacing it. Similarly, the proponents
Banks aren’t competing against other banks anymore – as they have been doing over the past 300 years.
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argue that this gives banks a chance to prepare for the inevitable – if you’re going to undertake a multi-million, multi-year operational change, then the more time you have to prepare for it, the better, right?
With all the talk focused around APIs and open banking, there was one topic area that seemed to fly under the radar. What happened to blockchain? Distributed ledger technology was the talk of the town at both Singapore in 2015 and Geneva in 2016. Now it appears that blockchain has fallen off the hype curve and into the doldrums of disillusionment. As it turns out, you can’t put a core banking system on the blockchain and most of the systems around today do their job more than well enough to think about replacement. So, is blockchain still a “solution without a problem”?
“It’s not really the right question to ask,” said Horacio Barakat, vice president of corporate strategy at Broadridge. “If you believe that blockchain can significantly transform the way we do business, then looking at whether it can solve a specific problem is not the right answer.” You have to start from a point of belief to get to the place where specific operational efficiencies can be improved using the technology. Blockchain, in other words, is in a “down and dirty” stage, where the real work is finally being put in and the whys, whats and wherefores have been answered. Industries like supply chain and trade finance are already moving towards implementing pilots of distributed ledger technology, where it can make realistic impact straight away. It might be a little less cool, but a lot more is being done.
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