Challenges and Opportunities for the Romanian Banking & Financial Industry

The accelerated adoption of digital technologies, new regulations and the projects of the financial & banking community were the main topics covered at the seventh edition of SWIFT Business Forum Romania.  

The 2016 edition of SWIFT Business Forum Romania took place on 26 October at the Intercontinental Hotel from Bucharest, and was organised by the Romanian Banking Association (RBA) and SWIFT, with the support of Allevo. The event brought together the representatives of the financial & banking community, regulatory authorities, market infrastructures and the business environment, to debate the new challenges confronting the industry and how they can be turned into opportunities.

The Forum was opened by Radu Graţian Gheţea, President of the SWIFT Member Group Romania, who talked about the importance of collaboration and of community, in the context of the significant changes the financial & banking services industry has been undergoing lately.

Sergiu Oprescu, President of RBA’s Board of Directors, presented the latest developments in the Romanian banking sector from and mentioned its main challenges, opportunities and outlook. He reflected upon the context created by European initiatives and regulations, new customer requirements, the adoption of digital technologies, competition with FinTech companies, the on-going modernization of processing infrastructures and increasing cyber.

The SWIFT 2020 strategy was presented by Michael Formann, Head of SWIFT Germany & Central Europe. The strategy sets out an ambitious agenda for the years to come, including enhancements to and consolidation of basic messaging services, the expansion of the offering for market infrastructures and a consistent portfolio of solutions for financial crime compliance In the context of more and more diverse and complex cyber-attacks, security has become a prime concern for the community. To address this, SWIFT has launched the Customer Security Programme, which aims to improve information sharing throughout the community, enhance SWIFT-related tools for customers and provide audit frameworks. Through the programme, we will also share best practices for fraud detection and enhance support by third party providers.

Andre Boico, Head of Pricing, SWIFT, explained that SWIFT remains committed to reducing messaging prices and congratulated the Romanian community on the strong growth of its SWIFT  traffic in 2016, with its year-on-year growth rate higher than the average SWIFT traffic growth.

A topic of interest was that of Corporates on SWIFT. Since the first corporates came on board in the late 1990s, the number of corporates on SWIFT has grown steadily. Today, there are 1,690 corporate groups that use SWIFT to communicate with 2,651 banks. Zoltan Szücs, CFA Head of Group Cash Management, MOL GROUP talked about the lessons learned during the project deployed with 11 banks from Hungary and about the benefits for the company as regards efficiency, automation and security of banking operations.

The latest updates to SWIFT’s Financial Crime Compliance portfolio were presented by Julien Laurent, Head of Compliance Solutions Financial Crime Unit, SWIFT. The solution portfolio developed by SWIFT to provide compliance with the regulations on financial crime includes solutions for monitoring and testing sanctions and for knowing your correspondents. The Know Your Correspondent  registry – KYC Registry, a centralized global platform, which currently stores the data and qualified documents of over 3,000 financial & banking institutions, can be accessed in order to establish, assess and update relations with correspondent banks.

The Forum continued with a session dedicated to the challenges created  by new regulation and the market requirements for fast, transparent and efficient services, as well as the initiatives that can transform these challenges into opportunities for the industry.

Marjan Delatinne, Business Director Gpi Banking Initiatives SWIFT, spoke about the global payments innovation initiative (SWIFT gpi), an initiative launched in December 2015, that aims to significantly improve the customer experience in cross-border payments, , by increasing speed, transparency and predictability. To date, over 85 banks have joined the SWIFT gpi initiative, which is currently in its pilot stage.

The new European regulations in the field of payments – EU Regulation no. 751/2015 the Interchange Fee Regulation, the EU Directive no.  2366/2015 the Payments Services Directive 2, EU Directive no. 260/2012, the SEPA Regulation – and the central bank concerns regarding the enforcement of these regulations were presented by Denisa Iatan, expert in the National Bank of Romania.

The ISO 20022 standard has recently become the preferred option for market infrastructures and is also gaining ground in the corporate-to-bank space. Evelyne Piron, ISO 20022 Business Development Standards SWIFT, delivered a presentation on the future of standards and the status of migration to the ISO 20022 standards. She highlighted the role of SWIFT in supporting the community as it adopts the standards and seeks to get the best out of the opportunities offered by them.

During the same session, Mihaida Meila, Head of Participants and Settlement Customers Department, Central Depository, talked about the challenges and opportunities for the Romanian capital market and mentioned the current and future projects as regards processing and settlement infrastructures in this market.

The session was followed by a workshop given by Benoit Pirotte, Programme Manager e-Learning, regarding the modernization of SWIFT’s training services, by launching a new e-Learning platform, SWIFTSmart, available to all users as from November 2016.

The second part of the SWIFT Business Forum Romania was dedicated to innovation, new technologies and their impact upon financial & banking services. A topic of great interest which concerns the global financial & banking community pertains to distributed technologies - Distributed Ledger Technology (DLT).

Damien Vanderveken, R&D, Labs and User Experience Marketing SWIFT, presented the conclusions of the survey conducted by SWIFT and Accenture, on the existing capabilities of DLT. Vanderveken explained that whilst the technology has not yet reached the right level of maturity to be used on a wide scale within the financial industry today, it does have the potential to transform payments and financial investments if certain limitations in areas such as  governance, data control, compliance and scalability, are addressed. .

The last session of the Forum explored the development potential and the opportunities brought about by new technologies. Alina Florean, Senior Project Manager Roland Berger Romania, presented the outcome of a survey on the adoption of digital technologies and the ways to eliminate the legal barriers which prevent the adoption of some complete digital processes in financial & banking services.

Cristian Mustață, Head of Digital Strategy BCR, talked about the potential of the digital market in Romania, about the achievements and concerns in this field and about the need for banks t o be present – relevantly and frequently – in the everyday financial lives of their  customers.

Instant payments, a topic that is of particular interest, both at European and global level, was  examined by Ionel Dumitru, TransFonD advisor. The instant payments made in a few seconds, available already in some regions, are expected to become a reality in Europe in 2017, for euro payments. TransFonD is considering building a system for instant lei payments too, so that Romanian banks are able to offer their customers payment services 24/7/365, in a time interval of at most 10 seconds and in a secured environment.

Sorina Bera, CEO Allevo, talked about open technologies in financial & banking services and the collaboration that is needed among banks, software firms and FinTech companies, in order to give customers the experience they want. The session concluded that opportunities are most likely to be realised by a strong community and intense collaboration among all the entities involved.

On the occasion of the SWIFT Business Forum Romania, SWIFT – via its  Corporate Social Responsibility (CSR) programme – made public the donation of €3,000 to the  ‘SOS Children’s Village București’.

More information and the speeches held during the Forum are published on the Romanian Banking Association’s site.

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