[ U P D AT E ]
Top tech talking
points at Sibos
Sydney
WE SUMMARISE THE MAIN
TECHNOLOGY TAKE-AWAYS
FROM THIS YEAR’S SIBOS
CONFERENCE, AND WHAT
TECHNOLOGICAL TRENDS ARE
BEING SET FOR THE SECURI-
TIES SERVICES INDUSTRY.
A
nother year, another Sibos. While the
industry collectively recovers from the
sheer intensity of the four-day marathon
event, let-alone the jetlag upon returning
from Sydney, some interesting themes
did emerge out of the conference. Sitting
through industry gatherings has been a
fairly depressing exercise for securities
services professionals recently, not least
because they have been constantly pumped
with apocalyptic missives from FinTech en-
thusiasts warning them that their days are
numbered. Sibos Sydney, however, marked a
dramatic change in tone, much to the relief
of securities services.
Collaboration is in
Rather than attempting to aggressively
disrupt intermediary providers, the best fin-
techs are now working with them. “There
is a real opportunity for banks like ours to
collaborate with FinTech, as they are agile,
innovative and unconstrained by com-
plex processes. However, fin-techs cannot
disrupt the industry in isolation, as they do
not always have the clients, relationships
with regulators or capital, which banks do
have. This has created synergies for banks
to work with fin-techs,” said Margaret
Harwood-Jones, global head of securities
services and transaction banking at Stand-
ard Chartered, speaking at Sibos.
FinTech risk
Other factors are also accelerating these
partnerships, chiefly the general reluctance
among many clients to outsource core
operational activities to start-ups. “Clients’
primary concern is safety and they want
to work with trusted counterparties which
have long, proven track records, robust asset
safety provisions and the correct infrastruc-
ture from a risk management perspective.
It is important to remember that clients
still incur liability whenever they outsource
so their providers need to be strong. As a
result, a partnership approach is becoming
more common between banks and those
fin-techs offering innovative solutions,” said
John Van Verre, global head of custody at
HSBC Securities Services.
Are we at peak blockchain?
Roll back five years, blockchain was going
to transform everything, be it clearing and
settlement, corporate actions, reporting
and payments. While blockchain is certainly
not a dud, the technology has not quite
met expectations. Even its purported ability
to facilitate instantaneous cross-border pay-
ments has been met with short thrift from
correspondent banking clients, who say
they are more than happy for transactions
to complete in several hours or on the same
day. Van Verre acknowledged many banks
were mostly using the technology to resolve
internal issues involving duplication, adding
APIs now seem to be more of a business
priority for them.
Quantum computing in the limelight
Just as the securities services industry had
finally adjusted to the tsunami of blockchain
verbiage like mining, nodes, hard forks, and
soft forks, a new, even more mind-bending
technology made headlines at Sibos. Quan-
tum computing – depending on who you
speak to – may or may not be genuine, but
as a conjectural premise it could enable the
industry to digest and disentangle the most
byzantine problems and calculations well
beyond the comfort zones of any existing
technology. While some believe quantum
computers could unravel blockchain encryp-
tions, most experts are not flustered about
it yet. As one seasoned securities industry
veteran put it, “quantum computing is a
long way off.”
Winter 2018
globalcustodian.com
15