SWIFT Business Forum New York: Building the Future, Together
On 14 June, 630 senior leaders from across the banking and financial technology industries gathered at Chelsea Piers for the SWIFT Business Forum New York 2017. The theme of the day, “Building the Future”, focused on how the financial industry must innovate to remain relevant, while staying resilient against a backdrop of uncertainty – one of the biggest challenges facing the industry today.
SWIFT Chairman Yawar Shah opened the day by detailing the new SWIFT Customer Security Programme, challenging the SWIFT community to answer a “call to action” to reinforce its security standards in the wake of cyber breaches that have targeted multiple banks around the world.
“The customer security attestation process will require an investment in people, processes and departments,” he said. “SWIFT is committed to continuing not only to develop and innovate but also to help protect the industry.”
SWIFT is committed to continuing not only to develop and innovate but also to help protect the industry.
Yawar Shah, Chairman, SWIFT
The opening plenary panel, “Innovating for Tomorrow, Securing Today” followed the Chairman’s remarks. Moderated by SWIFT CEO Gottfried Leibbrandt, the panel of banking, payments, cyber and market infrastructure experts discussed how financial institutions can continue to encourage innovation while dedicating resources to risk management in an uncertain environment.
Right from the start, a consensus formed: financial institutions and financial technology startups need to work together to survive in a competitive landscape.
“There’s only one thing we can do,” said David Puth, Chief Executive Officer of CLS. “The only way we can fight that battle is by disrupting ourselves and looking for innovative partnerships.”
“Collaboration is the only way forward for banks and fintechs,” agreed Tom Jessop, President of block chain startup, Chain.
Charles Blauner, Global Head of Information Security at Citi, was on the same page, proposing that innovation was itself a prerequisite for robust risk management. He pointed to the increasing complexity of modern cyber threats.
“The bad guys collaborate brilliantly and innovate rapidly. If we can’t do the same thing, we’re going to lose,” he said.
Emma Loftus, MD, Global Payments and FX Product Executive at J.P. Morgan, cited SWIFT’s global payments innovation (gpi) initiative as an example of the kind of collaborative partnership that banks need to use to find efficient solutions to their common issues.
“It’s not enough for one bank to go alone,” Loftus said. “Banks have a responsibility to think of new technologies, and how these can be integrated into the banking infrastructure while at the same time creating a simple user experience for the client.”
Following the plenary panel, delegates had the opportunity to choose from any of the four concurrent, breakout sessions to hear banking and technology experts discuss issues ranging from cybersecurity, to compliance, to securities, to payments innovation. A showcase of the latest innovations, R&D and proof of concepts from SWIFT were featured in the SWIFTLab throughout the day.
Mary Harman, Payments and Strategy Executive at Bank of America, said the key to innovation could be as simple as having teams within a company communicate with each other. “Sometimes the solution sits a couple doors down, but we haven’t always broken down those silos,” she said.
Further, Tom Halpin, Executive Vice President, Global Head of Payments Products at HSBC pointed out that “embedding the bank with the client is critical to driving innovation.“ Halpin stated that we must “look through the eyes of the client when addressing payments innovation.”
David Watson, Chief Digital Officer, Global Transaction Banking and Head of Corporate Cash Management Americas at Deutsche Bank, believes “this shouldn't just be a question for banks alone; industries and organizations are all part of the landscape.” Watson agrees that collaboration is important when it comes to innovation.
As to what innovation would look like, experts again pointed to SWIFT gpi as a solution with transformative potential. Mark McNulty, Global Clearing and FI Payments Head at Citi, said, “Here and now, the major initiative we see making significant impact on corporate cross-border payments is SWIFT gpi.”
“That real-time interconnection between your client, yourselves and the marketplace completely changes the dynamic of how business is done,” said Mike Bellacosa, Global Head of Payments at BNY Mellon.
In another room, cybersecurity experts were in agreement that the global financial industry must continue to innovate despite today’s increasingly challenging environment. Working together to build upon and maintain a strong foundation is the key to security.
“They’re always going to pluck the low-hanging fruit, which can be anywhere in the world,” said Jeff Lunglhofer, Chief Information Security Officer at BNY Mellon, “even in places you wouldn’t associate with a high degree of wealth.”
“Over and over again, companies have missed basic cybersecurity hygiene. Not keeping patches up to date, for example,” said Todd Inskeep of Booz Allen Hamilton. “You have to address cyber vulnerabilities, and you have to have a response as well.”
On the compliance panel, experts discussed how the changing geopolitical landscape was affecting their field. Alan Ketley, Head of AML Global Strategy, Americas Compliance at The Bank of Tokyo-Mitsubishi, said increasing threats would breed innovation. “After a security event, there’s always a desire to ask how you can prevent an event from happening again,” Ketley said.
Delivering the closing remarks, Javier Pérez-Tasso, Chief Executive, Americas & UK Region at SWIFT, concluded that innovation is happening right now, but needs to go hand-in-hand with cybersecurity and compliance measures to keep the industry thriving.
“Cyber and compliance are keeping our feet on the ground,” he said. “Strong defence is certainly as important as innovation or ‘commercial attack’. It is vital to foster a cyber and compliance mindset from the outset when coming up with innovation.”
Cyber and compliance are keeping our feet on the ground. Strong defence is certainly as important as innovation ‘on the attack’. It is vital to foster a cyber and compliance mindset from the outset when coming up with innovation.
Javier Pérez-Tasso, Chief Executive, Americas & UK Region at SWIFT
Merrill explained to the assembled delegates how to cultivate a successful free-thinking environment, how to listen more deeply to customers, and to combine data and intuition to avoid stale business practices:
The first thing a business leader must do is be ready to fail. Innovation is like juggling, he said. “Know when to drop the ball.”
In order to encourage businesses to follow their own instincts, Merrill told the story of how Google engineers noticed that, when entertainer Britney Spears first rose to fame, search engine users were misspelling her name multiple times before finally reaching the correct search. By following the patterns of searches and re-searches, the engineers were able to develop a tool to anticipate the correct search term. By analyzing its customers’ mistakes, Google gave birth to Spell Check, the site’s most popular search feature.
The last lesson of Merrill’s speech focused on the need to be proactive about fighting one’s own bias. In order for a company to foster innovation, it must hire people with different ideas and backgrounds.
“You need to force diversity into the system,” Merrill said. “Innovation is a very fragile flower. It is not adapted to everyday life.”
Innovation is a very fragile flower. It is not adapted to everyday life.
Douglas Merrill, former Chief Information Officer at Google
As the forum concluded, many delegates expressed their anticipation for this year’s Sibos conference, which will take place in Toronto in October.