April 25, 2017 : London, UK, has been witness to the 2017 SWIFT Business Forum Conference, which commenced business today, just a few hours ago.
The key theme of the year’s Conference was the various issues affecting the financial industry, more so, as how they impacted and are linked to the UK and global markets.
One of the focus areas of the discussions was how financial institutions can stay on top of today’s ever-increasing ‘instant’ culture in the banking and financial world, and the need for rising attention to security and resilience, while implementing innovations and when manoeuvring through change, as well.
Extract from an on-the-spot report, as received by a leading Fintech source, follows:
Morning Session: 8.30 am to 10.25 am.
The day got off to a great start, with the delegates enjoying a good English breakfast and large helpings of Coffee, as the fine weather of a sunny morning in London with blue skies welcomed them with a smile. The venue was well-dressed and arranged at the London’s Tobacco Dock.
The agenda, scheduled to begin at 9 am, covered the Plenary and Workshop Sessions.
A few minutes past 9 am, Gavin Esler, famed for his role as broadcaster with BBC, came in as the MC, and in his words of welcome, checked out audience reactions on the snap elections announced by Prime Minister May. He received a feedback of 39% opinion that it is a risky and uncertain move for UK’s financial services.
SWIFT’s Board Chairman, Yawar Shah, came in next with his opening remarks, after an introductory video clip on the rising cyber threat situation and regulatory challengers for bankers and financial institutions. His words marked the proceedings starting off in good stead.
Mr Shah introduced the latest Customer Security Program from SWIFT as the highly advanced development to face the challenges of the industry on this front.
He highlighted the Program as an industry standard in cyber security which will deliver the user major advantages in security and protection, particularly if banks are also evaluating their clients and counterparty standards, using apps such as SWIFT’s KYC Registry.
The circles of cyber security will also ascertain cyber governance and internal control measures by the regulators, according to the Chairman of SWIFT. Of course, the process will include guidance and directions to be passed on to customers and counterparts, as the system moves on, and those who implement this cyber security early enough, will reap much advantage from the investment and harvest deeper CRM results, he said.
First off-the-block, ‘Building Tomorrow, Today’. Panelists : JF Legault, Global Head of Cyber Security, J.P. Morgan; Baroness Kingsmill CBE, Chair of the Board at Monzo; and Gottfried Leibbrandt, CEO, SWIFT’ Coproration.
Legault opened the conversation with the remarks that ‘what keep him up at night is what issues are keeping the business up at night’. He went on to describe how one must be cautious of not just the Fintech infrastructure, but also the people and processes which are in place.
Getting an upper-hand on the security issues and knowhow, means getting an enhancement on the opportunities to increase one’s competence to address risks. This is applicable across all business components, he added. Compared to earlier times, cyber security teams have come a long way, and have a better understanding of payment systems and risks today, he concluded.
Baroness Kingsmill, said she desired to open a bank of her own that people would love to associate with, and it has taken her 2 years to achieve that goal, to some extent. Today, her bank’s team is focussed on treating customers with much more customer relationship benefits and facilities and imparting the capabilities on them to be in tune with the times. This approach, steered away the conventional image of ‘extracting profit’ and brought-in customer friendliness.
Being a start-up, most regulations at Monzo, were still paper-based. While she referred to the present central system as ‘one size, fits all’ in terms of regulation, a two-pronged approach would benefit the smaller players, she added.
A noteworthy event in the operations of Monzo has been the ability of the bank to raise 1 million Pounds in crowdfunding, as one of its revenue sources.
This was an indication of the customer trust to simple and straight-forward banking, she added.
Leibbrandt came up next, with the comment, the way London has made of developing in the same geographical area the financial centre with legacy systems, there can be further improvements, especially in the payments world. The threats that surface in the cyber systems due to wek points in the end-to-end chain, where everything is connected to everything else. Thus, the solution must also be eco-system-wide, covering all links.
Breaking down cycber crime into 3 parts, he illustrated : a pre-compromise state, the post-compromise but pre-abuse, and the post-abuse stage.
SWIFT with its Global Payments Initiative has improved performance results in understanding the threats, their origin, etc.
One must be aware of the ecosystem, communication, and must conduct simulations of a fraud scenario to get a grip over circumstances that may crop up in crisis situations.
Involving the various business units, peers and linking the process systems to this exercise is needed for its success, he added.
Such exercise expose the security involved in abetting crime on a larger scale. He appreciated Bank of England for bringing in these advancements in technology. He added that cross-border payment risks also needed to be addressed. SWIFT is building a system which will address over 200 countries in a global information sharing process network, he noted
No bank will want to go on record that they have been hacked. As a sector, to show the statistics and educate people is the way forward for the industry, suggest Leibbrandt, but adds that this should be as a sector as a whole, rather than individually. It can take a century to build a reputation but five minutes to destroy it.
Baroness Kingsmill opined that while regulation strictness is necessary, a practical approach to be inclusive of ‘challenger banks’ would be welcome. Initial costs of regulatory infrastructure is high, and such a practical alternative would benefit newcomers in the industry, she said.
Communication with clients is key to creating a fail-safe system, said Legault. Training about risks, internal and external cyber security, and ‘fishing tests’ can help in this training program. Those who fail the tests be imparted mandatory training, and once done, they will never forget to be cautious and risk-preventive.
With the global stance towards PSD2 and access to APIs, Leibbrandt agrees that regulation is moving towards encouraging competition and innovation.
As far as customer confidence is concerned, Kingsmill says that their customers go everywhere with a card and a phone and that is all they need. Banks should think like they are a utility and offer services accordingly to public.
Towards the end of the Session, Leibbrandt described the future of technology in banking as exciting times. Anyone who likes a ‘boring life’ would not find banking and financial services the right place to be. The pace of change and technology would be high and sweeping. He also pointed out that continuous cops-and-robbers game or challenges will be there in such a scenario in the future between cyber security professionals and fraudsters.
By 10:25 am, the Morning Session ended with a networking and coffee break opportunity. The next subject to be covered : Banking & Payments Stream with the focus theme : ‘The Transformation of Banking – Threats and Opportunities of Open Banking’