How nation first politics can impact global financial organisations
It’s clear that data and regulation are the two key topics that are on every financial service executive’s minds at Sibos. So much so that during the panel discussion on the impact of nation first politics on financial services, Timothy Adams, president and CEO of the Institute of International Finance stated that “data is the new oil” for the financial services industry.
The talk continued on the impacts of politics on global trade and finance, with the unexpected Brexit vote in 2016 undoubtedly effecting London’s status as the global financial hub of the world, and the more recent events such as the French elections and the latest political hitches occurring with China’s 19th congress.
One thing was clear, however, that despite political dispute, e-commerce is becoming one of China’s greatest trade markets. Panellists agreed that western countries need to catch up with the momentum that’s being created by Chinese consumers and fintech players.
The panellists and audience were also quizzed by moderator Anne McElvoy, senior editor of The Economist, on which city could replace London as the financial hub. Amongst the top choices of relocation were Frankfurt, Singapore, Paris and Chicago.
Heather McGregor, executive dean at Edinburgh Business School stated: “I know that London is the financial centre of the world.
“I don’t think that Brexit is going to matter at the end of the day – I think we will keep calm and carry on.”
Panellists agreed that Brexit is too big of a political decision, and that for financial institutions, the best thing to do is modify the collateral damage and move on to the next phase which supports the least worst outcome. Banks and financial industries move dramatically overnight, so it won’t make too much of a difference.
Circling back to the London’s financial centre alternative, the final audience votes were in: 45% believed that Frankfurt would be the next global financial centre. Our vote on Twitter also concluded with the same results.
Becoming a financial centre requires a lot more than just corporate offices; it’s more than just banking – a city needs a good social and physical infrastructure, good schools and good life standards.
Panel discussion: The impact of big technology companies
Collaboration between financial services and fintechs is moving at an accelerated pace; there’s no doubt that co-operating has gained traction and opened up new opportunities for both. Progress is being made in areas such as data, AI, machine learning, and growth within these sectors are increasingly seen as an opportunity rather than a disruptive threat.
With the industry embracing partnerships in the midst of regulatory transformation, this panel talk debated where this leaves the big tech players such as Google, Apple and Facebook. The debate began with who should fear whom and who should work with whom amongst fintechs, big techs players and banks.
JP Morgan’s Umar Farooq said “if you ask someone on the street what big technology company is – they would say the Google’s and Amazon’s of the world.
“Banks and technology overlap a lot more people think. One thing you can’t underestimate is the culture of a bank.”
Elisabeth Rochman, financial services chief technologist at Hewlett Packard Enterprise said that banks have been good at partnering with fintechs.
“Fintechs are no longer are a threat to big banks, it’s more the big technology companies such as Amazon and Google. They’re the ones who are now hungry and competitive, making billion dollar investments within the industry.”
The panellists agreed that although the relationship between banks and fintechs can be complicated, both are a perfect match for one another– fintechs have the innovation, banks have millions of customers, and collaborate is key to move forward together and succeed in the industry.
Figuring out what has good potential and what can bring good business value is also extremely important to bring value to our partner and clients.
Paul Camp, Global Head of FIG at HSBC believes that innovation can come from anywhere.
“Being innovative isn’t being fast or being first – that’s just getting to the market faster.”
Panellists referred to Amazon’s customer journey and recommendations as the future of payments – where the tech company could hypothetically ship products to customers before they order them because they have so much information that they’ll already know you’ll need it before you do.
The top five sectors Asian fintech investors are interested in are data analytics, blockchain, lending, payments and regtech, according to Gary Hwa, EY regional managing partner.
On the third day of the Singapore Fintech Festival conference, there was a focus on specific applications of fintech innovation. One was trade finance, which is clearly is ripe for a revolution.
Kicking off the first day of the Singapore Fintech Festival, issues with cryptocurrencies were addressed by MIT media labs director, Joi Ito, and panels of technology leaders discussed how they’re using data analytics.
The EU and US’ shift in accounting standards may bring balance sheet losses and increase credit risk, according to James Elder, director of risk services at Standard & Poor’s (S&P) Global.