Attended Sibos 2017? Here the first blog of my busy and sometimes painful Sibos experience in Toronto 2017. Trying to capture the essence of dozens of meetings with our clients
Open banking is clearly one of the dominant themes at Sibos 2017 in Toronto. But there are massive differences in how vendors position their strategies and the concerns banks voice about it. How will it affect my core infrastructure? What comes next? And where should we go with it? Most vendors are getting really excited about their open banking offering, but there are also some doubts about how "open" their vision is and more importantly the "actions" that will crystallize.
Distributed ledgers are the other hot topic, with good news on the front that financial institutions and vendors are now picking up on the differences between DLT and blockchain. Not surprisingly, Sibos 2017 has also been accompanied by a series of interesting announcements around DLT — the news, for instance, that the Digital Trade Chain consortium has now been joined by Banco Santander and has been rebranded as we.trade. The latter is also a reaction to the DTC acronym and the confusion that came with it. IBM also announced its new partnership with Stellar.org and the KlickEx Group to improve the speed with which banks both clear and settle payment transactions on a single network in near real time. We understand the idea is to turn this into a rail-agnostic platform that can use any digital currency, whether central bank digital currency or other public cryptocurrencies. Broadridge Financial Solutions, Natixis, and Société Générale also announced the successful completion of a pilot project that leverages blockchain technology for bilateral repurchase, or repo, agreements.
The hype around DLT is coming to an end, as financial institutions move forward from the many POCs of the past two years to face a new world of complexity on the long road to production implementation. As Jason Kelley, global general manager for IBM Blockchain Services, put it: "When moving from POC to production, the challenges are shifting dramatically. The technology is no longer the key issue, but putting the technical and organizational governance in place."
The race for the "coolest thing at Sibos," a term that my IDC colleague Jerry Silva coined in Boston three years ago and a much sought after accolade for our clients ever since, is still wide open. Clear contenders are the many new solutions around open banking, as we see a sea-change from last year on how understanding of what open banking means has changed. Open banking now has become much more than putting in place an API management platform. A couple of vendors have moved to a more persona-based approach, shifting from a traditional transaction focus toward interaction. The context of an interaction becomes the pivot, with new API-first architectures allowing the decoupling of the analytics and value creation layer from the core and processing systems. This not only optimizes the orchestration of a transaction on the backend, but also enables context and relevance to the customer with data-driven capabilities, such as the next best offer, dynamic pricing, and actionable advice.
This new openness is often demonstrated through cognitive capabilities via Alexa or Siri that can be easily integrated through the new API interfaces. How far this will be picked up by the corporate world remains to be seen, but we clearly see the appeal of a cognitive system as part of the new interactive channel offering.
iGTB demonstrated its vision of what it branded as "contextual banking" and its new API-first strategy. It demoed an impressive digital and cognitive use case of contextual banking for an SME client, hitting the jackpot when it showcased its first SME customer that loves the new banking experience so much despite paying more fees than ever before. Other vendors such as FIS also shifted toward a more persona-based approach for open banking platforms that also puts a lot more emphasis on UX design, data-driven insights, and of course cognitive channels.
With one day left to go, we will keep our eyes open for the coolest thing at Sibos and will round off our view of Sibos 2017 with another blog.