Although it's hard to condense the entire week into a brief summary, there were a few subjects that stood out:
Likely the most critical topic of the conference was Cyber-security, or increasingly just 'cyber' which was naturally high on the agenda at Sibos given the hacks over the past year both within and outside the financial industry. Although the Bangladesh hack was not discussed much during the conference, it was clearly on the minds of bankers, regulators, and participants. Many of the Sibos sessions had a cyber focus and discussions covered practical implementations of both operational and technology processes to combat cyber-attacks.
The topic of cyber is unlikely to go away anytime soon and in all likelihood will be a big issue again at Sibos 2017 as we are certain to see continued cyber-crime over the next year. Still, if we look at many of the recent hacks, the majority consensus that we heard from the conference was that humans are still the weak link either through improper technology implementation / configuration or via plain old social engineering. This will continue to be the case at least for the foreseeable future until finance becomes end-to-end machine processing.
At one point in the conference, I overheard one delegate saying to another "I can't wait to come to Innotribe 2018, and maybe I'll come to Sibos..." The comment was meant in jest but certainly fintech was pervasive at Sibos Geneva. It seemed that whatever your role in the industry was, 'fintech' was a required part of your job description, or at a minimum, your elevator pitch.
Nearly every organization had a fintech lead or director present at the conference, and the Innotribe building (it really was a massive structure...) was the center of it all with discussions all week that blurred the line between banking and technology. The industry still seems varied in the depth of their focus on fintech and their level of 'adoption.' Some organizations appeared to be ticking a box by participating in the fintech conversation, while other exhibitors, like Ripple, are built on the very basis of the technologies, trends and usage models that are driving fintech today. The real question on our mind is: what's next after fintech? Definitely a research topic we'll be looking at this year.
AI (artificial intelligence) / Machine Learning
The intersection of machine and finance that is AI and machine learning was clearly the number one new topic at Sibos this year. With applications in everything from branch to risk management, there were numerous discussions about the potential uses of AI in the financial industry. Narrowing in on one killer app for AI would be challenging at this point as there are so many potential uses and the technology is very new.
One vendor we spoke to described how their payments matching engine improved over time through analyzing exceptions and adapting itself to better respond if it saw a similar exception in the future. Another explained how they were working on incorporating an AI engine to streamline payment processing and better adapt in real-time to changing market conditions and pricing. Over the next year, we should start to see even more production-ready solutions come to market.
Unlike blockchain, which decreases costs, but, at least as far as I am convinced, doesn't drive revenue, AI and machine learning could legitimately drive both. This is definitely a space to watch.
Blockchain technology / DLT
Of course, blockchain and distributed ledger technology (DLT) were still a big topic at the conference. At Sibos 2015 in Singapore, most of the discussions on blockchain were theoretical, 2016 was marked by proof of concepts, tests, and announcements. Although the real long-term impact of DLT on the financial industry is still to be determined, the level of interest remains incredibly high.
Yet, we still haven't hit the 'trough of disillusionment' in the hype-cycle, which is something that we may see before Sibos 2017 Toronto; there are some hints that banks have been pulling away from DLT projects already. We are still skeptical. Although we are bullish on blockchain technology long-term, there is a short-term shake-out that still needs to happen. Further, we strongly feel that any lasting solutions will come from the third-party players like R3Cev or Digital Asset Holdings.
All in all, Sibos Geneva was a great event. Although some have suggested that Sibos is becoming less important, it remained clear to us that this is the one must-do conference of the year as there are few other global events where the payments industry comes together to debate the real issues that they are facing. Kudos to SWIFT for keeping Sibos relevant.
As for us at Kapronasia, we had a very full week of meetings in Geneva and had a chance to meet with many of you. We understand that scheduling during that week can be a challenge. If we didn't have a chance to meet during the week and you are interested in learning more about how Kapronasia can help your firm better navigate the Asian Financial industry, please do reach out.
We look forward to seeing you again soon at Sibos 2017 Toronto.