24 October 2018
SIBOS Wrap-up – Key themes of 2019 identified
Time has flown by, Sibos 2018 has come to an end for me. A few days filled with discussions, presentations and sessions highlighting countless different visions on the future of payments have inspired thousands of professionals. Sibos has been the vibrant global hub of the payments industry this past week; almost every financial organisation was present. I consider Sibos an opportunity to listen and learn, so we are updated on the latest developments and can anticipate innovations to come.
Looking back, Sibos was an outstanding event where collaboration between banks and fintechs was encouraged, the importance of data was regularly highlighted, the shift from B2C to corporate banking was frequently discussed, the customer experience was underlined as crucial and the necessary change of banks was repeatedly mentioned.
2019 will be one for the books
Since 2017, one key theme has certainly gained quite some momentum: Instant Payments. In fact, during the 2018 edition of Sibos it has become really clear to me that this topic will likely dominate the payments industry throughout next year. The year 2019 will be one for the books, as the ECB will launch their TARGET Instant Payments Settlement (TIPS) just before the start of the next year.
As Executive Board member of the ECB Yves Mersch rightly points out, it is time to take innovations around Instant Payments to the next level, preferably on a pan-European scale. Developments that support Instant Payments solutions will undoubtedly play a major role next year. Like with any change or innovation, only time will tell if and how an industry will embrace it. This is true for blockchain technologies for example, but also counts for Instant Payments. The upcoming years will give us an idea whether Instant Payments will indeed become the new norm, like many industry leaders expect, or whether there will be unforeseen challenges to conquer.
As far as PSD2 is concerned, September 2019 is a month to mark in your agenda, because by then European banks and service providers will need to comply with the Regulatory Technical Standards (RTS). This standard sets criteria for the security of access to payment accounts. To meet the deadline, a stable test environment must be ready by March 2019. In other words, by that time banks must have their dedicated interface (open API) ready to be tested by third parties.
This is one of the reasons why next year the innovative power of fintechs will probably speed up. Besides that, we expect that this will further drive collaborations between banks and third parties. A core message this year at Sibos was that banks should focus on customer experience and how fintechs and bigtechs can show banks the ropes of meeting customers’ demands. Banks on the other hand, also have a great asset: a trusted relationship with the customers and other stakeholders. A partnership will be advantageous for both parties for these reasons, not to mention the innovative financial services that we can expect to derive from such collaborations.
So far, we know we’re at the very beginning of PSD2 and the Open Banking era, so there will be many consequences of these regulatory changes that we can’t foresee quite yet. The general trend that prevailed at Sibos 2018 was that, whichever route Open Banking takes, it requires radical change from banks. Whether it’s creating completely new business models or choosing a focus area to specialize in, 2019 will hopefully teach us more.
It has been a pleasure to visit Sibos again. Hearing established industry leaders and innovative fintechs from across the globe share their visions has been interesting and inspiring. Thank you, to all who followed my liveblogs, it has been great reporting to you.