On 24th April at London’s Tobacco Dock, over 1,000 industry leaders from the payments, securities, market infrastructure, corporate and Fintech communities came together at SWIFT Business Forum London 2018.
The forum offered a unique opportunity for sharing knowledge, learning and networking. One of the main themes in the event included; the evolution of the payments landscape inside and outside of the UK, made possible by the collaborative nature of companies and Fintechs offering innovative digital services. These services are increasingly focused on improving customer experience, which demands greater agility from companies to be able to respond with new product offerings. Such fast pace of change, which according to SWIFT Chief Executive Javier Pérez-Tasso is set to accelerate further, brings challenges around risk management and cyber security – which was a central theme at the SWIFT Business Forum.
These themes are familiar to Strategic Advisor Jitu Parmar, who recently joined MHC after working for SWIFT for the past 21 years, where his last tenure covered the Customer Security Program (CSP – Cyber protection) covering the Americas, UK and Nordics. Parmar attended the Forum with MHC Chief Strategy Officer Keith Goodbody, who summarised some of the key discussion topics from the event below.
MHC Chief Strategy Officer Keith Goodbody
MHC Strategic Advisor Jitu Parmar
Collaboration is key
One of the key themes throughout the conference was collaboration. During the opening panel, Bob Wigley (Chairman, UK Finance) commented on how his team has influenced HM Treasury on proposing payments as a service industry, which has been taken positively by the Brexit negotiating team. “UK has a lot to offer to Europe even when we leave EU”, according to Wigley. He sees Asia as leading in payments development and recommended that we need to follow Alipay and similar establishments for their developments. Collaboration between participants in the payments network is the key to retain customer trust and tackle external threats.
Andrew Pearce (Global Head of Payments, HSBC) shared detail on how HSBC and peers are working hard on Fintech and the challenges they face with integrating Fintech with legacy systems. New start-ups tend to face different challenges and Pearce queried if start-ups actually make money, even if they have a significant customer base consisting of usually the younger generation. The importance of collaboration was highlighted, as collaboration is key for Banks and Fintechs to leverage expertise through all avenues. Institutions can only tackle the complexity of today’s market through collaboration and leveraging the ecosystem.
Andrew Hauser (Executive Director for Markets, Bank of England) mentioned how the Bank (not as a regulator) has facilitated Fintech and is encouraged that London is the hub city for Fintech. Bank of England has supported many initiatives and are keeping an eye on blockchain developments, especially cryptocurrency, which is not regulated and thus causes concern over financial crime. Andrew also encouraged SWIFT to add focus on Fintech.
Gottfried Leibbrandt (SWIFT CEO) expanded on SWIFT Global Payment Initiative and how the initiative enables end-to-end corporate payments in under 30 minutes with full transparency. Over 150 leading global transaction banks have already signed up for the initiative totaling more than 15 million payments since going live in February 2017. This acts as a major step for the industry and reminded everyone, “only the paranoid survive in the world of Cyber”.
Cyber Security is a top priority
Cyber security was another recurring theme throughout the conference. In his opening remarks Pérez-Tasso compared current cyber-attacks to brick and mortar bank robberies that have occurred throughout centuries. He presented Swift’s Customer Security Programme (CSP) as a response to tackle this issue. According to Swift, CSP is operating well, with 89% of clients attesting to the mandatory requirements and plans for 2019. These clients have to implement the requirements by Q4 2018 and any clients who do not make the mandatory implementations will be reported to their country supervisors.
Panels agreed that regulatory operational requirements are a headache for compliance and this gets more complex as real-time transaction screen demands become greater. False positive monitoring is extremely difficult and human hours will not be enough to achieve this which is where AI models are required.
Data collaboration is also key, not underestimating GDPR restrictions, which sometimes creates defense mechanisms with individual firms; an issue, which needs solving within the community.
It was agreed that partnerships with RegTech companies are key in ensuring large financial institutions are able to keep up with cyber development due to the cost of cyber-crime prevention getting higher every year. It was reported that the dark web is very alive and run as a business where cyber-crime technology is developed at a faster pace than protection. Mean time to detect (MTTD) and Mean Time to React (MTTR) need to be as close as possible to avoid disasters.
Collaboration between organisations is essential to address the evolving cyber threats facing the industry today. In an afternoon session on cyber resilience, Cheri McGuire (Group CISO at Standard Chartered) said that information sharing is a vital tool across critical infrastructure for financial institutions to be able to work smarter, identify fraud patterns and prevent future cyber-attacks.
The overall consensus within delegates and audience members was that cyber security is and will remain a top priority within the industry. While such an aggressive and ever-evolving landscape can never be fully under control, it’s important for the wider community to understand the threat landscape and learn how to manage it.
Positive outlook on Brexit
The Closing Plenary was hosted by Kirsty Wark (Broadcaster and Journalist) with Natalie Ceeney (CBE, Chair, Innovate Finance), Marion King (Group Director of Payments, NatWest) and Angela Knight (CBE, Chair, Tilman Brewin Dolphin) part of the speaking panel.
This all-female panel was a great reminder of the importance of ensuring diversity remains a key topic within the financial services industry, especially when faced with the uncertainty of Brexit and the talent retention challenges that brings. The panel focused on how Brexit will affect the UK and EU financial services sector in the long term. The panel gave a positive outlook of the status of UK plc and affirmed London as a main financial hub, where a culture of innovation is prominent and supported. Brexit will obviously cast some uncertainty on the whole landscape and how this will evolve, especially with regards to attracting talent. However, the panel highlighted the importance of collaboration and echoed earlier dialog from the opening plenary, stating that in order for financial services and Fintechs to continue on a path to success, they must share knowledge and collaborate. By facing short-term challenges and facilitating innovation, we are laying the groundwork for long-term growth and safeguarding London’s future post-Brexit.
If you are interested in discussing any of these themes with us further, please email Keith Goodbody and Jitu Parmar on: keith.goodbody@mansion-house.co.uk and jitu.parmar@mansion-house.co.uk.
