This year’s SWIFT Business Forum London focused on innovation and how the financial services and payment architecture is developing at a fast pace.
The message, which Javier Perez-Tasso, CEO of Europe and the UK at SWIFT, delivered in his opening remarks suggested that the speed and scale of developments to the UK’s RTGS system, opening banking and the Second Payment Services Directive (PSD2) and real time payments becoming reality, is unprecedented.
He said: “Institutions are readily adopting new and emerging technologies, learning how to harness the power of data to drive machine learning and artificial intelligence, managing and strengthening cyber resilience, and ensuring financial crime compliance.”
He explained with the pace of change set to accelerate, industries and firms that seize the opportunity to evolve business models and product offerings will win in a digital-first world.
Through collaboration, incumbents and financial technology firms can help foster a culture of innovation and establish partnerships that will benefit the industry and transform the future of the UK payments landscape, according to Perez-Tasso.
During the plenary panel, Andrew Pearce, global head of payments at HSBC, explained that both customers and regulators “are always expecting more from the industry”.
He suggested that collaboration was one way to solve this problem and by doing this people are now leveraging the ecosystem.
Pearce said: “Companies are doing deals with multiple parties to solve individual things. It could be a joint venture or venture-style investments, which adds a whole new dimension of complexity and if you don’t do it you might miss the bus.” He added: “Companies are having to be more creative and it all comes back to regulators and customers wanting more and wanting it more quickly.”
Bob Wigley, chairman of UK Finance, also agreed that collaboration between payments is key to create a game-changing way of payments, as well as risk mitigation and banking innovations.
Wigley said that there is no advantage to banks competing on cybercrime, so collaboration is the best method for banks to tackle together.
As Brexit negotiations continue, Wigley explained that it is important to focus on tackling cybercrime, so that in a post-Brexit world, London can be “the most transparent and safe place to do business in financial services across the world”.
Wigley suggested that the current system “is not fit for purpose” and it is something that is being worked on with the government and regulators to reform and improve the system.
With much conversation focusing around artificial intelligence (AI) and machine learning, another panel discussed leveraging the power of AI.
Financial services have already seen some of the biggest uptake of these new technologies, with practical applications ranging from back office operations and trading, to risk management and financial crime compliance.
There is currently a lot of worry in the industry that AI will replace the role of humans. However, one panellist, Matt Armstrong-Barnes, chief technologist at Hewlett Packard Enterprise, said that in order for AI to work it needs a human present.
Armstrong-Barnes suggested that AI is a tool and should be used effectively. He commented: “You need to chose and plan where you deploy the tools. You get out is what you put in. Humans are still the decision-making entity.”
AI is doing things that humans can’t physically do, but what an AI can do is target certain parts of data. You need a human to take AI processes and the data they provide and do something with that data.”
Husayn Kassai, CEO of OnFido, also agreed that there “should be no concerns around jobs being lost, but AI is transforming our lives and changing every industry”.
Kassai added: “AI is something that, in the past, simulated intelligent behaviour, but what has accelerated is machine learning and the availability of data and cloud computing amongst other things. There are fantastic tools out there to make it happen.”
During the panel, delegates were asked via an interactive poll ‘how is AI viewed within your organisation?’
Of those who responded, 49 percent said that it was another technology that the firm was trying to understand, while 48 percent said is was an essential part of the future business strategy. The remaining 3 percent of respondents answered ‘what is AI?’.
Attendees were also asked ‘where is your organisation on its AI journey?’. Of those who answered, 42 percent said they were just about to get started, 38 percent said they were well on the way, 13 percent said they had not yet started, but were interested, while 6 percent said they have not even started to look at it.
Panellist, Kristian Luoma, head of OP Lab at OP Financial Group, said that the hype around AI is from the availability of data and a change in behaviour towards technology.
Luoma explained that AI is a tool, which able to reduce the time of processes as well as replacing manual processes within the workplace.
However, he noted that the main driver is that most of the consumption of the services has gone digital.
Another panel focused on the evolution of the payments landscape in the UK and beyond.
During the session, the audience were asked if the speed of innovation and change in UK payments is moving at the right pace?
Some 45 percent of the interactive poll thought that innovation and change was moving too slowly, 14 percent of the audience thought the change was happening too quickly, while 41 percent said they thought it was moving at a good pace.
One panellist said that “the world of payments needs competition, collaboration and people in the industry to listen to their clients”.
The panel, made up of bank CEOs and heads of product management, cited that these three ‘C’s’ were the key to dealing with innovation and financial growth in the UK.
According to a panellist, if UK payments could get this right, the UK could be “the model of the world”, while another said: “You [the bank] can collect the intelligence from a lot of different places but ultimately it is the customer who you need to consider.”
Elaborating on the theme of innovation, one panellist said: “I think in the future, 2018 will be looked back upon as a slow year—the start of the Second Payment Services Directive (PSD2) journey—it has begun to lead the way but has had a reasonably slow take-up, but I think it will accelerate.”
When considering this innovation journey it is still more important to retain safety of the payment side and to ensure customers security, above anything else, said another panelist.
The panel concluded: “The crystal ball moment isn’t here yet about what’s going to happen in the future. Ensuring safety now in technology is important moving forward and is key for customers.”
She added: “It is my prediction that payment apps will be copied within the payments sphere, as the technology can be replicated by all the big banks—if all banks replicate all those programmes, how can they compete? No one will survive if they are a low cost provider. The competition of the future, will be on a cost basis, not actual apps and the technology available.”
