Club Sibos Monday

Monday Bringing the world to Sibos and Sibos to the world The future of transaction banking Looking back over the past decade, one could argue that transaction banking had a good crisis. P Overturning the model Payments, cash management, liquidity management, account services, trade finance and supply chain management – all once seen as potentially discrete segments for financial IT firms to address – are increasingly seen as part of a wider whole. Indeed, these siloed distinctions have always been of little consequence to a bank chief executive’s view, whose concern is a holistic understanding of the performance of the transaction banking division as a whole. For Manish Maakan, CEO, iGTB, and advocate of what he calls contextual banking (see page 3), the financial IT indus- try has yet to bite the bullet on getting to grips with what corporates actually want from their banks rather than what they have spent their time developing, based on how they see banks traditionally operating. reviously considered at the cautious and unglamorous end of the spectrum, transaction banking has proved its worth to the C-suite as a steady earner, providing recurring fee income without straining the balance sheet. A report released earlier this year by Bain & Co, Wolf in Sheep’s Clothing: Disruption Ahead for Transaction Banking, pointed to an increasingly crowded and technology-intensive field and posed the question of how banks can stand out. The report suggested that to succeed, “incumbent banks will need to overhaul most aspects of their operating models, including legacy technology systems.” The need for a radical reassessment of the business has been building. In 2016, McKinsey identified four key de- velopments with the potential for system-level impact for the transaction banking business: advanced analytics and machine learning (AAML); distributed ledger technology; FinTech challengers; and the EU’s Payments Services Direc- tive 2 (PSD2), which required banks to open their payments infrastructure and customer data assets to third parties to develop payments and information services to be offered direct to the banks’ clients. Partly as a consequence of the crisis and its regulation and partly owing to these technological advances, the siloed world of transaction banking is being forced to revisit its assumptions about the services its corporate and financial institutions clients want. 3 7 10 12 SWEPT ALONG IN THE DIGITAL MAINSTREAM THINKING BIG SUCH IS LIFE, OR IS IT? CLUB@SIBOS CANVASSES OPINION ON THE FUTURE OF FINANCIAL SERVICES IN THE DIGITAL WORLD SEPARATING HYPE FROM REALITY CAN BE A DIFFICULT PROCESS WHEN IT COMES TO AI ALL CHANGE IN THE PAYMENTS LANDSCAPE SASKIA DEVOLDER OF SWIFT ON THE IMPLICATIONS OF PAYMENTS TRANSFORMATION WHO WAS NED KELLY?