Global Finance editor Andrea Fiano explains the importance and context of this year's Sibos conference.
Transformation and innovation are clearly at the forefront of current developments in transaction banking. At the upcoming Sibos in Sydney, Australia, the agenda of meetings, seminars, panels and presentations will be heavily focused on new approaches being devised to problems old and new.
In anticipation, this issue’s Sibos preview gives special attention to Australia, where the banking market is dominated by a few large and technologically very advanced institutions, but where fintech companies are also very active and growing fast.
For a few years, Sibos gave attendees an opportunity to assess the state and the forms of cooperation between traditional financial institutions and new players like fintech companies. That interaction in all its forms—from pilot tests to joint ventures and acquisitions—is still crucial, but it is probably not the key issue anymore.
At this point, as the stories we present in this supplement seem to prove, what counts is really the state of innovation in areas like instant payments or the implementation of blockchain in corporate finance. The spirit of cooperation between different entities, from established banks to energetic fintechs, is pretty much a given at this point.
What counts are the facts on the ground. How much are real-time payments currently being used in business-to-business transactions? Only 1%, estimates one expert. How fast and widespread is the real implementation of open banking? The directives are there, but the finance community has still a long way to go before it can build for banks and fintechs the same level of consumer trust enjoyed by the giants of e-commerce.
Blockchain is expanding into trade finance, syndicated loans and cross-border payments, and also offers new opportunities for credit card companies and small and mid-sized enterprises. Nevertheless, in an industry where blockchain seems to be under discussion everywhere all the time, there are still serious issues to resolve in order to establish common standards and offer security, reliability and scalability to all users. For ISO 20022, already used in 70 countries and expected to be nearly universal in five years, the priority is the harmonization of the existing framework for users worldwide.
Innovation also brings new problems to solve, and with that, new opportunities to enter completely new businesses. The rise of digital assets has brought a need for reliable custodians. Major financial institutions are moving into custody of crypto assets—a sector already lively with fintech startups.
A new service and a new niche. Welcome to transaction banking.
Andrea Fiano | Editor
afiano@gfmag.com
