Postcard from Geneva – the @SIBOS that didn’t change #SWIFT…

I do apologise for taking a while to write after SIBOS 2016, the annual conference of #SWIFT, the global messaging platform. I had to spend a few days putting my finger on the key takeaways at this annual jamboree of transaction banks held in Geneva last month. I met all the usual suspects, but some of the key reflections as follows:

It was anything but transformational

1.      In their opening remarks, both Yawar Shah and Gottfried Leibbrandt ticked all the boxes in terms of issues that SWIFT was dealing with today, so that you would think they were doing their job and that there were no surprises. But somehow, while compliance and cyber security were necessary “reactions” to current issues, both lacked a sense of purpose or direction as to where the organisation was going with these. The last time I thought there was real purpose in the statements of the SWIFT leadership was when Yawar as chairman, and the previous CEO, Lazaro Campos initiated a cost reduction strategy to end an unsustainable culture and pass on savings back to SWIFT members. This was nearly 10 years ago. For several years they reported real cost cuts, without which the SWIFT network would have become susceptible to a members revolt. Today, the SWIFT network is clearly susceptible to a new agenda – that of being replaced by any number of virtual network technology already available in the market, but Yawar and Gottfried’s unspoken position is that it ain’t broken yet, so we just keep running it. Not that they don’t care. Their position is a reflection of their board and their members – very busy people with a lot of fires to fight, and no time to sit and think where they want to take their own organisations, let alone the volunteer cooperative.

2.      There was a lot of talk about “collaboration” and “competition” – in fintech, in cybersecurity, in blockchains – you would think that SIBOS was the perfect platform for some of these collaborations to be pushed along enthusiastically. But the sub-text unfortunately, was “buy our products.” SWIFT’s own employees have become hardwired to achieve sales targets rather than build communities and this was evident in the way some compliance and cyber security solutions were mentioned several times in the sessions.

3.      SIBOS 2016 will be remembered for conversations on Cybersecurity that failed to push to the next level of shared understanding and action. The dialogues on cybersecurity ranged from the tearfully resigned comment by a senior regulator that “cybersecurity is an inherent risk, just like credit risk, market risk and operations risk” that made you want to cry, to the more aspirational “let’s start to share data globally like disease control in the medical profession,” that Ginni Rometty of IBM called for. Marco Gercke Director of the Cybercrime Research Institute, Cologne was an eloquent expert who kept saying that cybersecurity was not a bank-level data breach but a new global phenomenon. But blame it on the clueless moderator at his session and the panellists who simply did not know how to pick up the point and build on it. Also blame it on Gotfried on shaming the Bangladesh bank in his opening remarks and suggesting that the recent breach would not have happened if they just kept their house in order. Again, the organisation is hamstrung from being able to lead the conversation into building a new global community on cybersecurity that is not bank-centric but one that involves governments, telcos and a whole range of other players, because it is focused on selling patch software. A global alliance on cybersecurity could have easily redefined SWIFT’s raison deter for the next 20 years, but the organisation is not wired to drive something at that level.

4.      “Blockchain” was everywhere at SIBOS 2016. The year before the industry was in denial about this topic. Suddenly every major bank had an initiative, had a story to tell. Except for one tiny but important point – all of the lovely blockchain demos, discussions, products, and programmes featured this year insisted/assumed a closed bank-centric networks, protected by regulation, with bank-defined participants. Clearly by the time we meet at SIBOS 2017, the agenda would have been blatantly stolen and put firmly on open networks where banks are just one of the participants, if not sidelined altogether. But for the moment, at least two of the three most developed blockchain initiatives – Ripple, Digital Assets and R3 – appear to derive their financial viability based on blockchains being regulated business models. Some of these initiatives are also curiously driven by personalities rather than collaborations. In at least one of them, I saw a methodology that I thought was designed to make the founder wealthy as participants paid to participate in each step of the development process from setting standards to defining physical security tokens, long before reaching any utility. Block chain has to be given back to the community for it to really take off, and this is what the current bank pilots are determined not to allow.

5.      I had rushed across the Palexpo complex to reach a session promisingly called “The Future of money”, but which turned out to be a thinly veiled platform for sponsored product placements. Payments and the use of digital money should have been one of the most powerful topics to be discussed at this meeting, on trends that will shape the use of money in the future. But with a panel comprising product people and people who were on stage because their companies paid SWIFT some money, it turned out to be an offensive demonstration of how far SIBOS can veer from its role as a community and agenda builder and into a for-profit event manager. The product speakers were hardly able to camouflage themselves despite their “we are not here to sell anything” promise. At a time when in China, WeChat has completely disintermediated the banks in peer-to-peer payments and in any number of countries, remittances and wholesale payments were being ripped apart by start-ups who are handing over price transparency back to the customer, this was a grave mistake. In a week where the Wells Fargo fiasco was breaking, it called into question the point at which an organisation like SWIFT slides down the ethics hill and starts losing the plot with borderline instances like these. Most of the other “Big Issues Debates” suffered from the same malaise of not taking off for different reasons, but the one with IBM’s Gini Rometty was still exceptionally good because they put the chairman instead of an IBM salesman or product manager on stage.

6.      I also heard the curious buzzword “rails” several times this year. Banks use their “rails,” “fintechs are using the same rails”, we need to build the “payment rails”. Was this a code word for infrastructure? Was it a new euphemism for outsourcing? I dare not assume, but everyone appeared to assume they understood it meaning whatever it meant inside their own heads. Meaningless buzzwords and mindless jargon does not an intelligent conversation make. Sorry.

7.      The role of good moderators at a conference is very important during a transformational phase in an industry, so that they could lift the quality of conversations. When you have moderators who ask questions like “do you think that technology will affect regulation” in all earnestness, the best reply you can hope to get from the best of minds is a nonchalant “yes, I do.” Also, nobody turns up at a global conference to be reminded of the details of the job they already do. The Sibos TV moderators were even proud about their ignorance, waving a copy of “ISO20022 for Dummies” for all to see. You can still watch on the internet how neither of the moderators picked up on any of the useful ideas thrown at them. Cost management applied on the wrong foot.

8.      The general sense of carelessness to details, such as the fact that almost all the participants name badges were flipped over because they were hung on one rather than two hooks, and signages which did not have the “You are here” dot on them gave me the sense that there was a depersonalisation in the management of SIBOS. Nobody was really in charge. Nobody was walking the hall taking ownership for the total experience. Like the film company Kodak was in its days, SIBOS is a very successful annual jamboree, that looks like will go on and on and on until one day it does not.

Otherwise, Geneva was its peaceful self and we took a side trip to Yvoire and Chamonix on the French side to get away from the crowd. Even there, it occured to me that SWIFT will eventually die or be replaced not because of technology or obsolescence, but because its employees and its members were too busy to care enough.

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