Technology giants such as Google, Apple, Facebook and Amazon (GAFA) are challenging the traditional ways that financial services firms have operated as they target banking as a service on the back of lifestyle decisions by consumers, warned Deutsche Bank's Global Head of Cash Management Michael Spiegel.
Speaking at the Bankers Association for Trade and Finance (BAFT) 10th Global Councils Forum on 20 October in Sydney Australia (ahead of Sibos 2018), he said that large technology groups are collaborating with fintechs as well as banks to create solutions for customers that no longer occupy an exclusively B2C world but rather a blurred B2B/B2C environment.
For the past three years he had been predicting the emergence of a new ecosystem, where multiple banks work together with clients, clients' clients and regulators. Spiegel developed the themes of his recent flow article, 'One for all' outlining how it is necessary to work with competitors and create win-win results for everyone. The non-bank providers such as AliPay are he said, "targeting banking as a service in a different manner" and gave the example of the movement of personal funds from bank accounts into wallets.
Industry agreed formats, said Spiegel, will take work as "this industry is not great at agreeing things," but "needs to remain agile." He complimented BAFT on its work developing master agreements, and went on to explain that while every bank has a different take on ISO 20022, "we are getting there".
The issue of managing risk while maintaining momentum came up in the next panel session, moderated by Marcus Treacher, SVP of Customer Success, Ripple (and former Global Head of HSBC Payments Innovation). He said that while everyone wants a better and faster 21st century payments network "if you get anything wrong, the impact is enormous". "How do you balance the need to make sure systems are rock solid and retain the fluidity of innovation?" he asked.
"We lead lives that are not Monday to Friday and we do things online out of hours", responded David Emery, Acting Deputy Head, Payments Settlement Department, Reserve Bank of Australia. "I think you have to recognise any modern organisation with a lot of complexity has a lot of operational risk and there should be a recognition that things can and do go wrong. It is how you respond in a crisis that is important."
BAFT published its 2018 Annual Review on 12 October 2018. This provides further details of work done by the association on behalf of its membership, from advocacy and education to best practices and joint industry initiatives.
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