26 September 2019
Wrap-up Sibos: Instant Payments is here to stay and banks need to act quickly
Intensive and interesting. This is how I want to describe the latest edition of Sibos in London, the heart of the European financial center. The annual banking and financial conference is growing every year. This is no surprise as the future of the payments world is extremely dynamic and this makes it so exciting. To manage these dynamics, collaboration is a key topic for the coming years. Collaboration among banks, with fintechs, but also with bigtechs. Helle Koggersboel, senior product marketing manager at equensWorldline, described this in a striking way: "If you want to go quickly go alone, if you want to go far go together."
Over the past few days, 11,000 financial professionals have gathered in London to shape the future of our industry. It was a unique mix of thought leaders, innovators and the next generation of fintech professionals who thought about this year’s theme: reinventing payments. Walking through the large halls of the London ExCeL International Exhibition Centre, I saw how technology and finance are becoming increasingly intertwined. You can notice that the traditional world understands more and more that technology experts will play a crucial role in their sector. Banks like Citi and ING also have a booth in the fintech-area, as self-proclaimed frontrunners of digitization. I would be interested to see if this will also impact the way we dress at Sibos: the traditional world is still very much in suits and ties while the handy fintech staff are dressed in casual chic, often with sneakers.
Friend or foe?
It is confusing sometimes. How to engage with all the new players that are coming to the world of payments. Is a fintech now a friend or a foe? Previously, fintechs were seen as a threat to the market, but now stakeholders realize that fintech ideas can help laying a solid foundation that banks need to remain relevant in the future. No, it is the bigtechs that are mostly feared: they have money, an enormous customer base and know how to focus on customer experience and innovation, not obstructed by legacy systems. This doesn’t mean you can’t work with the GAAFA (Google, Apple, Amazon, Facebook, Alibaba). CEO Jean-Pierre Mustier of UniCredit, the largest bank of Italy, even supports this. "It makes sense to partner with them. It is better to lead the disruption than to resist it." At the same time, he pleads for a level playing field: "It can't be that we as banks have to give access to all info, but if you ask Google to do the same then they can refuse."
Meanwhile, it is clear that Instant Payments is here to stay. The payment method had its breakthrough and has driven other popular topics from the previous edition of Sibos, such as Blockchain and Crypto, into the background. This does not mean that everything is perfect, as there is still much to do to improve, such as fraud prevention, cross-border friction and the avoidance of fragmentation internationally. We have to realize that it’s not just about the Instant Payments themselves, it’s part of an overall user experience. There was also homework for banks: to succeed in Open Banking, the banks must become more customer centric, think in terms of the user experience and focus on clear use cases. Banks are not very good at this historically, while bigtechs are very skilled at it. In addition, the platform economy was discussed more prominently than at previous Sibos conferences. Platforms will come to financial services and if banks don’t show up (with APIs) then others (bigtechs and fintechs) will step in. The urgency for banks to show up and act quickly is one of the things that really got stuck in my head this Sibos.
For banks, the time of getting used to the digital age is over, now it's time for real action. Luckily, this is something that more and more banks are aware of.