Insights

Five Major Takeaways from Sibos 2020

During his keynote speech, JPMorgan Chase CEO Jamie Dimon said the world should have been better prepared for the COVID-19 crisis but that the financial sector proved resilient during this difficult year.

“People like us kind of prepare for things like pandemics and closedowns, disasters, but not a global pandemic shutdown,” Dimon said. “The really shocking thing is we were able to – a lot of companies, not just JPMorgan – send our people home [to] work. With the communications tools and trader kits and all these other technologies and stuff like that. It was kind of an amazing lesson.”

He said bureaucracy disappears when you need to make decisions quickly. The banks continued to serve their clients. In fact, April through July were some of the most active months the industry has ever had for trading, investment banking, etc.

Dimon said working from home created minor vulnerabilities – less surveillance for instance – but that the heightened business was essentially “flawless.”

“All [the pandemic] did with digitization was speed it up,” he said.

Dimon stressed the importance of cloud adoption. He said JPMorgan Chase has around 20 percent of its systems in the cloud, but that they need to “get it all there.”

Gonca Latif-Schmitt, global head of commercial cards at Citi, said customer relationships are increasingly built on experiences as the financial services industry moves to a digital future.

“Customer transactions need to be faster. They need to be simpler. Payment platforms need to be open, compliant and secure. We know that technology is an enabler but most importantly client experience is the differentiator,” Latif-Schmitt said. “And financial institutions really need to understand the relationship people have with their banking partner and the interaction with financial products and platforms.”

In order to meet the needs of future customers, she continued, financial institutions need to deliver better services by leveraging technology and streamlining processes. She said the corporate users are customers as well and B2B experiences should be much more like B2C experiences. If their experiences are great at home, why shouldn’t they be just as good at work?

Marie Chinnici-Everitt, managing director and chief marketing officer of DTCC, said financial institutions can differentiate themselves from the competition through a superior client experience.

When asked about promising technology combinations, Lisa Frazier, chief innovation officer of Wells Fargo, North America, said that today’s most promising technologies (the cloud, big data, robotics, machine learning, etc.) are already delivering value across customer journeys.

But she pointed out that people typically combine technologies to address specific problems, which leads to creative solutions. They are not usually mixing technologies together for its own sake. As the saying goes, necessity is the mother of invention.

“We don’t actually think about combining these technologies,” she said. “We think about solving whatever problem we’re faced with. Then those technologies just come together to do the job.”

Ayeesha Sachedina, head of cross-product solutions at Bank of America, said it’s important to demonstrate the value of employing emerging technologies to internal stakeholders, which is easier with good use cases.

“It’s not only about bringing in new fintechs to test [new technological solutions] and do proof of concepts but also to roll them into execution and really deliver faster for our clients,” Sachedina said. “It really is about ensuring whatever we’re doing has benefit and purpose for our clients and the bank.”

During the “Technological Revolution in Financial Services” panel, Michael King, chair of finance at the University of Victoria, said traditional banks and fintechs should stop thinking of themselves as rivals and start seeing the others as potential allies.

“Partnerships between banks and fintech start-ups is the winning combination that will deliver a superior end customer experience. Ultimately, we don’t see banks and fintechs as rivals. We see them as complimentary with different strengths,” King said.

King pointed out that banks have large customer bases, capital and scale, as well as expertise in risk management and compliance. However, he continued, banks have traditionally been focused primarily on products rather than customers. Fintechs, on the other hand, better understand the needs of customers, develop innovative solutions and use technology to solve pain points. They also boast design thinking and agile teams.

NatWest CEO Alison Rose said the financial industry must do more to leverage its influence to drive progress in the fight against climate change. She encouraged financial professionals to look beyond their organizations, sectors and geographical boundaries to act as global citizens and stakeholders in the future of the planet.

“It’s important to be clear that positive climate change is not a competitive sport. We will not be able to do this on our own,” Rose said. “This is about collaboration across the industry, collaboration with sector-leading experts, collaboration with customers and governments because this is going to need everybody to help support.”

Jean Lemierre, chairman of BNP Paribas, said the current pandemic reveals a unique opportunity for confronting the climate crisis. He said it’s foolish to think we need to choose between economic recovery and environmental protection. He wants the financial sector to address them in tandem.

“We should put them together. We have to find a way to do it,” Lemierre said. “I think banks are the core of this. We have to be creative to find solutions, helping investors, the corporate sector and individuals to address the challenges they want to address and offer them products, approaches and financial policies which can help them.”

Alexandra Basirov, global head of sustainable finance at BNP Paribas, argued that better banking can result in healthier lives and that banks should help countries meet their Paris Agreement commitments through sustainable business practices.