RiskBrexitSibos 2016: from blockchain to Brexit

Sibos 2016: from blockchain to Brexit

Will the surface of Lake Geneva be ruffled by the winds of change blowing through the financial services sector due to fintech?

More than 7,000 tech vendors, bank representatives and financial service professionals are packing their bags and travelling to Geneva’s Palexpo convention centre this weekend, for the four days of Sibos 2016 commencing on Monday.

Switzerland’s second-largest city has been selected by SWIFT twice before – in 1993 and 2002 – for its annual financial services event that launched nearly 40 years ago. As the financial messaging services provider notes, the country’s financial marketplace features more than 325 banks and it manages 27% of transnational assets.

Geneva’s own financial industry has more than 35,000 employees and it has developed in to a major wealth management and commodity trading hub, with more than 400 commodity-trading companies across the city. A stable economic, political and social environment has enabled Geneva to attract a growing number of start-up businesses and small- to-medium enterprises (SMEs), in addition to around 200 multinational corporations (MNCs) that are based there.

This year’s show provides the opportunity for 32 Swiss fintech companies to pitch their products and services to delegates during the course of the week in a special showcase within the exhibition hall called the Swiss Lounge. This particular innovation is one that Sibos has indicated will be carried over to future events.

The declared theme for Sibos 2016 is ‘Transforming the Landscape’, which offers scope for sessions on how the financial services industry faces a shake-up from drivers that include blockchain, Brexit, cybersecurity and regulation. SWIFT has also responded to feedback suggesting that the event’s structure was becoming overly complex; having run a total of 13 different forums last year the number has been pared back to four main streams: banking, compliance, culture and securities.

The digital future

The ‘Big issue’ debate, titled ‘Cognitive business and the Future of Financial Services’, is scheduled for Wednesday and will see IBM chairman, president and chief executive officer (CEO), Ginni Rometty, consider the impact of cognitive computing and digital intelligence in the financial services industry. Following the keynote address, Rometty will be joined by Sergio Ermotti, group CEO of UBS and the session will be chaired by Dean Garfield, president and CEO of the Washington, DC-based trade association the Information Technology Industry Council (ITI).

SWIFT’s Sven Bossu, who has headed Sibos since 2012, notes that blockchain and distributed ledger technology – a hot issue when Sibos was held in Singapore in 2015 – have since become almost mainstream. He singles out the growing use of robo-advice – which provides automated, algorithm-based portfolio management advice without the involvement of human financial planners – as one of this year’s key focuses. It’s development can be regarded either as one that threatens to make many employees in the financial services sector redundant, or one that frees up their time and enables them to spend time on more rewarding work.

The other is, inevitably, cybersecurity, with an in-depth discussion, workshops and an educational session devoted to the topic. The US$81m raid by hackers using SWIFT codes on Bangladesh’s central bank in February made headlines and was followed by similar attacks on other banks, prompting SWIFT’s CEO, Gottfried Leibbrandt, to pledge that security upgrades and better information sharing would be introduced for its inter-bank transfer system.

Among the first of these new measures, announced by SWIFT earlier this week are ‘daily validation reports’ that will be sent to client banks from December. These will list payments messages sent from clients’ SWIFT terminals. Integrated into banks’ security, the measure aims to provide a record of transactions independent of banks’ own SWIFT systems.

While Brexit was unlikely to have featured on this year’s agenda before late June, the unexpected outcome of the UK referendum on its European Union (EU) membership has inevitably on Switzerland’s own relationship with the EU and how it manages without access to the single market. The answer is through a complex series of free trade agreements with the EU that provides preferential access for most of its industries. Among the sessions that now feature at Sibos 2016 is a panel session hosted by The Banker magazine that considers the post-Brexit possibilities for both Switzerland and the UK.

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