DTCC Connection

Oct 07, 2016 • DTCC Connection

Insights from Sibos

Tony Freeman - Executive Director, Industry Relations, DTCC
Tony Freeman - Executive Director, Industry Relations, DTCC

Geneva in September. The shimmering blue water of Lac Leman and the Alps dominating the background landscape. Four days of stimulating debate among the 8,500 Sibos delegates from almost every country in the world.

So what did we learn at Sibos? With an extremely diverse agenda, attendees representing payments, FX, cash-management and trade services and more than 200 conference sessions, there were many takeaways. Let me share with you some of the ones that resonated with me.

Target2 Securities

Shortly before Sibos, the third-wave of implementation of Target2 Securities (T2S) took place. T2S is now over the biggest hurdle, has been proven to work and is here to stay. Two more waves will follow in 2017, but the mindset has now moved on to “what’s next?” The debate about what direction T2S should take is underway, but it’s already clear that European CSDs are beginning to think about a changed environment – lower revenues and more competition. Clearstream and SIX Securities Services – two of the larger players – have already announced a partnership, and it does seem that change is afoot in the European CSD industry.

Blockchain

Best quote of the week went to Ginni Rometty of IBM – “…the blockchain will do for transactions what the Internet did for information…” What is now clear is that blockchain isn’t just hyperbole – it’s serious. A whole range of established players are involved in blockchain projects and are saying that real-life applications will emerge and be live by the time Sibos 2017 comes around. What is also evident is that policymakers are properly engaged in the blockchain discussion. Over the next few months, two central banks are hosting detailed workshops on the topic for the global central bank community. Central banks and policy-makers are routinely portrayed in the media as being worried about blockchain, but they appear to be focused on opportunities. The next couple of years are going to be fascinating.

New Tech

This is a perennial Sibos theme, but two propositions stood out this year. In an outstanding presentation by IBM’s Ginni Rometty, she cited numerous real-world examples of cognitive computing. This is the commercial application of IBM’s Watson artificial intelligence program. The question I heard most afterwards was: how can we apply this to our business? Equally intriguing was Microsoft’s “Bank in the Cloud” offer. What seems absolutely clear is that if you were to set-up a new bank today, you would have an IT architecture which is wholly different from those that most banks have historically operated. Banks are taking the opportunities which New Tech is presenting them with – but as ever the issue seems to be how to get from A (here and now) to B with minimal customer disruption.

Cyber-security

For understandable reasons, SWIFT is very focused on this area. Recent incidents where SWIFT clients – not SWIFT itself - suffered cyber-attacks have focused everyone's minds on this issue. The SWIFT team deserves considerable kudos for its transparent and decisive approach. What such experiences have demonstrated is that “we really are a community” – it isn’t just a buzzword – and you’re only as strong as the weakest link in the chain.

Lots to ponder – and that's without even mentioning regulation! See you in Toronto for Sibos 2017!

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