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I am deputy editor at The Banker, a Financial Times publication. I joined the magazine in August 2015 as transaction banking and technology editor, which remain the beats I cover. Previously I was features editor at Profit & Loss, an FX and derivatives publication and events company. Before that I was editorial director of Treasury Today following a period as editor of gtnews.com. I also worked on Banking Technology, Computer Weekly, and IBM Computer Today. I have a BSc from the University of Victoria, Canada.

Friday, 24 July 2009

Bean there…

Features

More than 7,260 financial services professionals from almost 100 countries gathered in Boston for Swift’s largest Sibos conference since it began 29 years ago. On the following pages, we summarise some of the themes and stories.

Five months into the job, Sibos was the first real public outing for Lázaro Campos, who replaced the long-serving Lenny Schrank as chief executive in May. It was an obvious opportunity for him to outline the direction that he intends to take the industry-owned consortium.

Taking the bull by the horns in the opening plenary, Campos outlined some of the issues still outstanding for Swift, such as the perception that it is too expensive, too complicated to sign up with and connect to. He claimed that Swift has these issues in its sights and is moving towards solutions, and outlined his concept of a more user-centric organisation.

“By the middle of next year, if low cost connectivity and simplicity is what you want, it will be available. Streamlined processes and a new light interface are part of a new proposition,” he said.

But Campos also called on participants to contribute to Swift and continue the community networking feel that marks the Sibos conferences throughout the rest of the year. One way Swift is supporting that takes its lead from Web 2.0 social networking concepts, with the creation of www.swiftcommunity.net, a set of blogs, forums and comments. “It may be Swift-inspired, but it’s for you. It is a community enabler engine; it is launching a new collaborative experience,” Campos said. “I believe it may well become the best investment Swift has ever made to harness the power of the community for the benefit of the community. Because we want a community that does not keep value at the centre, but delivers it to the end points.”

This community feel has now extended to corporates – last year was the first year that corporates were allowed to join Swift – so in Boston corporates ranked high on the agenda with more than 260 corporates, financial institutions and vendors registered for the first dedicated two-day Sibos Forum for Corporates. Over 800 people attended the plenary session on Wednesday.

Paul Burstein, managing director, Treasury Services Strategic Initiatives, GE Corporate Treasury, said that he participated in a closed session where it was just corporates talking to corporates about clarifying priorities and supporting each other. He thought it was very beneficial – about 15 corporates that were present agreed to continue the dialogue.

“This effort has been well received by Swift and all the banks that we have talked with,” said Burstein. “We have spoken with a number of banks that have said that they will send out notifications to their corporates around Swift about this initiative. They will encourage their corporates to join. Everyone agrees that this corporate forum is going to be very powerful.” He believes that the more corporates that are on the Swift network the better it will be.

As well as the corporate agenda, Panos Tzivanidis, the new head of events and Sibos operations at Swift – he has taken over from Patrik Neutjens, who is now partner solutions manager – said the other two main topics that attracted attention were standards and the Single Euro Payment Area, and he expects these three issues to top the agenda next year in Vienna. “SEPA was something that everyone was very keen to look at, with the SEPA session on Tuesday attended by over 700 people. And standards as well – the standards forum was attended by more than in the previous years.”

Swift encouraged high attendance by changing the pricing structure this year and letting all participants attend the sessions, removing the historical distinction between delegates and exhibitors.

But the added numbers did not fundamentally change the dynamics within the sessions. Many participants felt that the meetings were flat and some, like Mike Foley, managing director and chief executive at Peterevans, an independent UK provider of front- to back-office solutions for the financial services sector, hark back to Atlanta in 2004 and the commotion caused by Heidi Miller, then executive vice president of JPMorgan Chase Treasury & Securities Services, now chief executive.

“The best Sibos ever for me was in Atlanta where there really was some dialogue. The first plenary was quite controversial – Heidi Miller said that we were slow on the uptake and there were firms out there like the PayPals that would happily steal our lunch if we weren’t watching. I haven’t seen anything like that since then. It changed the whole conference – in the next plenary Lenny Schrank attempted to answer it but didn’t really, he just talked around it. It took him another day before they sorted out a response to that,” says Foley.

The reality is that not everything will be plain sailing for Swift. By expanding the franchise and taking a more commercial angle, Campos and the board are at risk of stepping on the community’s toes. Steve Nichols, managing director and head of global trade services, Global Financial Institutions and Trade division, Wachovia explains that although the bank is very supportive of Campos as a leader, Swift may have stepped across the line by moving to the belief that it is its responsibility to create the utility to provide the matching between purchase orders and invoices. In fairness, Nichols points out, Swift is responding to recommendations put forward by the Trade Services Advisory Group.

“Personally I feel that Swift’s remit is to provide the secure messaging channels and the leadership role in standardising messages. They have done a terrific job in meeting these objectives. However, in my opinion, I do not believe that it is Swift’s role to build functionality around those messages nor to provide processing utilities to the banking community – that is up to the individual banks,” says Nichols. “Philosophically I have a problem when Swift says ‘we are also going to be providing process and functionality’. Again, in my opinion, it is the responsibility of individual banks to provide these value-added services.”

At Sibos, Wachovia launched its TradeXchange trade portal, a web-based messaging platform designed to provide greater visibility throughout the financial supply chain. “Part of our decision to launch this at Sibos was because of the positioning of the trade service utility that Swift has sponsored. 35-40 banks have signed up to the TSU and are now asking ‘what do we get out of this?’ Our TradeXchange hopefully answers some of the questions that the TSU does not address,” says Nichols.

But there is an inherent contradiction within Swift’s business model. Foley argues that standing still is not an option because of “Lenny’s virtuous circle”, pointing out that Swift is committed to “reducing prices in x number of years by certain percentages – the consortium must grow the business and increase the volume”.

“The difficulty they have with this is that every time they come up with some initiative to make Swift more pervasive, they are going to upset somebody, aren’t they?” he says.

“When [the remit] is drawn up, it is fairly narrow and everybody agrees on it, but if you put people in charge, they are obviously going to try to improve and grow – if you are the man who is heading Swift and your brief was to stand still? You can’t really win. They need to grow the business in order to increase the number of transactions which they have to do to cope with the large standing costs to administer the network, so the more volume you put through there reduces the unit cost.”

Beyond the sessions and the controversy, Sibos presents an unrivalled opportunity to network and do business. Madhavan Ramaswamy, head of product management and marketing support at American Express Bank’s Financial Institutions Group, says that Sibos is an important venue to meet with clients and prospects from around the world. The bank arranged close to 200 meetings in the five days – and he has already started planning lunches and dinners for Vienna.

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