Sibos 2008 in Vienna — 15-19 September 2008
> Thursday 18 September - 15:30-16:30 We will bring Sibos to a close in the presence of a well-known thought leader on collaborative innovation. We will gain insights and ideas into how more collaborative ways of working can lead to breakthrough thinking and innovation -- and the opportunities these offer within the financial services industry for future business growth and relevance.
We will also reflect on the Sibos week and the experiences we have shared together, setting the scene for meeting again in Hong Kong next year from 14-18 September 2009.
Vienna, Thursday 18 September 2008 |
New era of transparencyInformation sharing among peer groups must be at the heart of a new approach to risk management
Don Tapscot, Author Wikinomics, Chairman nGenera Innovation Network, Adjunct Professor of Management, University of Toronto
In the event it proved to be one of the most innovative and stimulating weeks that Sibos veterans could remember. The keynote speaker at the session, Don Tapscott, author of Wikinomics, president and CEO, nGenera and adjunct professor, University of Toronto, even joked that, “You sure know how to time a conference,” adding that his 22 year old son had also been thrust into the mayhem, having started his fi rst job two weeks ago in his chosen field: investment banking. The US Government bailout of Fannie Mae, Freddie Mac and AIG which in all but name had nationalised these former bastions of the US financial industry would have been un-thought of a month ago, said Tapscott.
| “People questioned sub-prime but there was no sharing of the information.” Don Tapscot, Author of Wikinomics |
Risk management practices had been at fault owing to their proprietary nature. “People questioned sub-prime but there was no sharing of the information,” he observed. This echoed one of key points of the previous day’s CEO Big Issue debate which highlighted the importance of understanding the nature of risk across business lines. Leadership could come from people present in the plenary hall, suggested Tapscott. “There’s nothing more powerful than an idea whose time has come,” he said, quoting Victor Hugo.
Lesson of mass collaboration
Tapscott walked Sibos participants through the implications for corporate futures of the advent of mass collaboration and the technologies and social forces that were enabling it. We cannot afford to wait two decades to restore confidence and trust in the financial system, said Tapscott, urging delegates to learn lessons from the experience of mass collaboration.
Web 2.0 represents a new paradigm, said Tapscott, with interactivity as the enabler. In this environment, he said, various objects in daily use will have IP addresses allowing them to communicate with each other. “My toaster will be able to talk with my refrigerator,” he said, though adding that, “I have no idea what they would say to each other.” We are, said Tapscott, “in an age of pervasive ambient computing.”
The internet itself has changed radically, he said. The old internet was structured around web pages. The new internet is built into the world itself, allowing for richer interaction with the user’s immediate environment.
Kids today
The technological revolution is also intersecting with a demographic revolution, said Tapscott. In an earlier book, Growing Up Digital, he set out to explore the impact of technology on adolescents. Now, he said, “technology is like air” for a generation that has grown up with internet technologies rather than having to learn them. Their ability to create communities is integral to their approach to solving problems.
Unlike their parent’s generation, said Tapscott, “these kids want to have fun at work.” They do not segregate the two activities. Wikinomics breaks down corporate hierarchies by encouraging the rise of self-organising collaborative communities.
Mass collaboration is actually a new mode of production, said Tapscott, providing a networked model of innovation and production.
This is not restricted to particular industries, said Tapscott, citing the examples of zopa. com in banking and marketocracy.com in mutual fund management.
Goldcorp
Underpinning this approach are four key principles: peering; transparency; sharing, and acting global. To illustrate the point, Tapscott pointed to the case of Rob McEwen, former investment banker, and CEO of Goldcorp, who used open source tactics and an online competition to breathe new life into a struggling business. When his geologist was unable to pinpoint where to fi nd the next seam of gold, McEwen published his geological data online and offered over half-a-million dollars in prize money for any entrants who could come up with the best way to fi nd and extract the gold. Participants in the contest found 55 drilling targets that Goldcorp had not identified, 80% of which proved true.
Could Wikinomics be used to change the nature of financial risk? Tapscott suggested that it could. Community members, he said, should adopt openness in working together to provide click-through transparency on packaged securities such as CDOs, along with performance dashboards; peering to produce open-source pricing algorithms and not only thinking globally but also acting globally to share and analyse value at risk data.
The session closed with a dialogue between Dan Newman, The Valueweb, provider of the Dialogue Zone and SibosLab innovations, and Gottfried Leibbrandt, Head of Markets, SWIFT, on the highlights of the week. |
