Sibos: The world where we can operate as self contained entities is ‘evaporating before us’
12 October 2021 US
Image: Ivan Kurmyshov/adobe.stock.com
The future of the financial services ecosystem will be digital and data-driven, but most importantly it will be interconnected, according to Kahina Van Dyke, global head of digital channels and data analytics, Standard Chartered.
During the Sibos conference, Dyke highlighted: “The world where we have an option to be more digital or more innovative is gone. We can no longer operate as individual self-contained entities behind borders or within industries or within companies — that world is evaporating before us as global trade, commerce, and even health responses must be coordinated in order to be successful.”
According to Dyke, connected real-time digitisation is the new baseline for how the industry will move and interact in this environment. In the face of this major transformation, transformational leadership must be embraced.
“This is about people, not technology. Technology is a tool for us, but it really is about understanding that disruption is no longer something to be afraid of or to prepare for in case of emergency. It is the norm,” Dyke affirmed.
She continued: “Traditionally, the banking industry has been conservative and resistant to major change. But now, the industry needs to be at the forefront of that change management and innovation. Institutions and banks with an international footprint, such as Standard Chartered, are best positioned to lead that change.”
For example, Standard Chartered has accelerated its expanded platform investments. While platform investments require technology tools and data dashboards, it also requires putting people first and investing in people.
Dyke explained: “We need to be thinking of ourselves in the virtual world as ‘always on’ with constant availability for our clients and for our people to see, via an online service, everything they are working on with us [Standard Chartered] in a simple and transparent way. We've seen the vast majority of our clients have embraced our digital channels.”
“Digital-first and data-driven future means that we are going to make ourselves available at all times, and we're also going to unleash opportunity in the emerging markets space.”
Emerging markets focus has some of the biggest upsides and growth opportunities in the world, and in the past, they are places that have been under-invested in. In Africa alone, Standard Chartered has acquired over 700,000 new customers through its digital channels, and 98 per cent of its customers are now acquired digitally.
“All of this is against the backdrop of sustainability because it is absolutely critical to everything that we do,” Dyke added.
Dyke suggested that a connected world needs transformational leadership, and the industry must operationalise diversity. It needs to be in a company’s DNA, it could be the biggest opportunity for the world right now.
Meanwhile, Richard Brown, chief technology officer, R3, discussed the importance of confidential computing. He said: “We've spent decades as an industry connecting everybody and everything, which has created an immense amount of benefit and value.”
However, Brown noted that the industry has been delinquent in installing sufficient technological protections into the system for information as it moves between individual systems.
“We want to know that the information we share, which may be our own, will be protected, and that the third party will only use it for the agreed purposes, but there's nothing technological that can enforce that,” outlined Brown.
As firms find themselves in this position, there are three main approaches to take, which Brown believes are unsatisfactory. One approach includes scrubbing and changing the data, simply to eliminate the more sensitive fields. Additionally, this approach includes only sending aggregate information or redacted information that can protect sensitive information.
“But of course, the less you send, the less value you get back, And there is a good reason for sharing data; data is the lifeblood of today's economy,” said Brown.
The second approach may be to employ lawyers, accountants, and auditors to review a firms’ controls and processes. Brown suggested this is a “very heavyweight, and yet soft approach because there's no technology to help you”.
By far the biggest approach people take, but also almost the most insidious one, according to Brown, is simply not sharing certain classes of data. Brown stated: “There are opportunities firms don't pursue and there's value we cannot achieve because it's too dangerous in their eyes to share that information with a third party.”
Brown inferred that the problem is considered to be the problem of transaction monitoring. A firm has an obligation to know its customer and to understand what's happening.
“And yet, you don't get to see where the money comes from upstream, you don't get to see where it goes downstream, you just see your piece of the puzzle; there is an entire landscape of transactions, and you've just got one little lamppost illuminating your part.”
“Imagine if you could see the whole thing. Imagine how much easier it would be to do your job and how many more examples of fraud or malfeasance you could detect. But of course, to do that would require a firm to aggregate that data, and it would have to be pooled, and then just think about the major risk if that firm was compromised or had a rogue employee, it's almost unthinkable.”
“But it's unthinkable because of this problem: when you share data with a third party, you have got no technological control over what they can do with it.”
According to Brown, it is about that tantalising window between now and when that technology is fully rolled out. He mused: “The future is here, it's just unevenly distributed, and until it is rolled out to everybody, I believe that was a really strong opportunity for those firms who roll it out first.”
Brown highlighted the firms who seize this opportunity and become the only firm in the market to offer a service that can prove to its customers that their data is safe, then the advantage over competitors who cannot or will not make that promise could be truly immense.
“So my recommendation is to have confidential computing near the top of your list of the technologies you need to go study or speak to your IT or CTO department about. It will be table stakes in a few years, but it's a real opportunity if you seize it today,” Brown concluded.
During the Sibos conference, Dyke highlighted: “The world where we have an option to be more digital or more innovative is gone. We can no longer operate as individual self-contained entities behind borders or within industries or within companies — that world is evaporating before us as global trade, commerce, and even health responses must be coordinated in order to be successful.”
According to Dyke, connected real-time digitisation is the new baseline for how the industry will move and interact in this environment. In the face of this major transformation, transformational leadership must be embraced.
“This is about people, not technology. Technology is a tool for us, but it really is about understanding that disruption is no longer something to be afraid of or to prepare for in case of emergency. It is the norm,” Dyke affirmed.
She continued: “Traditionally, the banking industry has been conservative and resistant to major change. But now, the industry needs to be at the forefront of that change management and innovation. Institutions and banks with an international footprint, such as Standard Chartered, are best positioned to lead that change.”
For example, Standard Chartered has accelerated its expanded platform investments. While platform investments require technology tools and data dashboards, it also requires putting people first and investing in people.
Dyke explained: “We need to be thinking of ourselves in the virtual world as ‘always on’ with constant availability for our clients and for our people to see, via an online service, everything they are working on with us [Standard Chartered] in a simple and transparent way. We've seen the vast majority of our clients have embraced our digital channels.”
“Digital-first and data-driven future means that we are going to make ourselves available at all times, and we're also going to unleash opportunity in the emerging markets space.”
Emerging markets focus has some of the biggest upsides and growth opportunities in the world, and in the past, they are places that have been under-invested in. In Africa alone, Standard Chartered has acquired over 700,000 new customers through its digital channels, and 98 per cent of its customers are now acquired digitally.
“All of this is against the backdrop of sustainability because it is absolutely critical to everything that we do,” Dyke added.
Dyke suggested that a connected world needs transformational leadership, and the industry must operationalise diversity. It needs to be in a company’s DNA, it could be the biggest opportunity for the world right now.
Meanwhile, Richard Brown, chief technology officer, R3, discussed the importance of confidential computing. He said: “We've spent decades as an industry connecting everybody and everything, which has created an immense amount of benefit and value.”
However, Brown noted that the industry has been delinquent in installing sufficient technological protections into the system for information as it moves between individual systems.
“We want to know that the information we share, which may be our own, will be protected, and that the third party will only use it for the agreed purposes, but there's nothing technological that can enforce that,” outlined Brown.
As firms find themselves in this position, there are three main approaches to take, which Brown believes are unsatisfactory. One approach includes scrubbing and changing the data, simply to eliminate the more sensitive fields. Additionally, this approach includes only sending aggregate information or redacted information that can protect sensitive information.
“But of course, the less you send, the less value you get back, And there is a good reason for sharing data; data is the lifeblood of today's economy,” said Brown.
The second approach may be to employ lawyers, accountants, and auditors to review a firms’ controls and processes. Brown suggested this is a “very heavyweight, and yet soft approach because there's no technology to help you”.
By far the biggest approach people take, but also almost the most insidious one, according to Brown, is simply not sharing certain classes of data. Brown stated: “There are opportunities firms don't pursue and there's value we cannot achieve because it's too dangerous in their eyes to share that information with a third party.”
Brown inferred that the problem is considered to be the problem of transaction monitoring. A firm has an obligation to know its customer and to understand what's happening.
“And yet, you don't get to see where the money comes from upstream, you don't get to see where it goes downstream, you just see your piece of the puzzle; there is an entire landscape of transactions, and you've just got one little lamppost illuminating your part.”
“Imagine if you could see the whole thing. Imagine how much easier it would be to do your job and how many more examples of fraud or malfeasance you could detect. But of course, to do that would require a firm to aggregate that data, and it would have to be pooled, and then just think about the major risk if that firm was compromised or had a rogue employee, it's almost unthinkable.”
“But it's unthinkable because of this problem: when you share data with a third party, you have got no technological control over what they can do with it.”
According to Brown, it is about that tantalising window between now and when that technology is fully rolled out. He mused: “The future is here, it's just unevenly distributed, and until it is rolled out to everybody, I believe that was a really strong opportunity for those firms who roll it out first.”
Brown highlighted the firms who seize this opportunity and become the only firm in the market to offer a service that can prove to its customers that their data is safe, then the advantage over competitors who cannot or will not make that promise could be truly immense.
“So my recommendation is to have confidential computing near the top of your list of the technologies you need to go study or speak to your IT or CTO department about. It will be table stakes in a few years, but it's a real opportunity if you seize it today,” Brown concluded.
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