Live blog | SWIFT India Regional Conference 2018 – Driving the next wave of innovation in banking and finance
The SWIFT India Regional Conference concluded at 6.00pm on 8th May. Read about all the highlights below.
India’s financial ecosystem has undergone massive transformation over the last few years, resulting in a wave of new technologies, services, and possibilities. Driven forward by government initiatives such as ‘Digital India’ and other technological advancements, the banking industry as we once knew it has changed, not just within the country but also across the subcontinent.
The SWIFT India and Subcontinents Regional Conference 2018 aims to explore key issues in the nation’s financial market development, with a specific focus on innovation, digitisation, and minimizing the digital gap. Featuring a range of experts from financial institutions, regulators, and MNCs, the conference will address the impact of digital technologies on trade finance, the possibilities of growth and collaboration among SAARC nations, and the challenges and opportunities in the securities fintech space, among other topics. Read about all the major highlights from the event below:
■ 5.27pm: Alain Raes, Chief Executive, APAC & EMEA, SWIFT presents the closing remarks for the evening. “Thanks all around to participants, speakers, panelists, and dignitaries who have made the event a success,” he announces. Raes reviews the core topics under discussion -- innovation, digitisation, and cybersecurity -- and underlines that technological possibilities are only going to evolve further. The idea is to collaborate actively and harness innovations so that the financial ecosystem becomes more efficient and far more attractive to investors and new businesses.
With that, the SWIFT Indian Subcontinents Regional Conference, 2018, concludes. Signing off from St. Regis, Mumbai.
Relli believes that product innovation is already here, and it is important to review existing solutions before jumping on to new ones — a thought seconded by Chauhan. Our customers expect a very simple UI/UX, explains Relli, and this is something that we never lose focus on. “For this, it is important to own the complete customer-relationship value chain,” he says.
The floor is now open to questions from the audience.
■ 4.40pm: Kothari talks about the gaps in existing infrastructure in light of the rising number of transactions in the country. “The entire infrastructure needs an overhaul to support the massive growth in users and facilities”, he says. Chauhan echoes Kothari’s thought and believes it’s important that regulators step up and move with the times.
So, how does one cope with all these new waves of change? Relli says the ‘good news’ is that investors expect a lot out of their chosen financial services and institutions. For example, execution of orders itself has undergone a lot of change in the last few years — as technology evolves, so do our operations. Fintech players are an essential part of this movement.
“No single technology can be the mother of all solutions,”asserts Krishnan, be it blockchain or AI. It is easy to confuse the requirement of ‘digitisation’ with that of a singular trend like blockchain. The key lies in knowing what technology to leverage at specific points so as to benefit the organisation’s focus areas.
■ 4.10pm: SESSION 5 (post coffee break): Panel discussion— Digitisation in Securities Market – Fintech revolution: What technology is delivering value, what is not?
Panelists: Ashish Chauhan, CEO, Bombay Stock Exchange, Sriram Krishnan, Managing Director, Head-Securities Services, Deutsche Bank, Vikram Kothari, Managing Director and Chief Executive Officer, NSCCL and Dhiraj Relli, Managing Director & CEO, HDFC Securities Limited. Moderated by Philippe Dirckx, Managing Director, Markets & Initiatives, Asia Pacific, SWIFT.
In the emerging securities fintech space, what are the challenges and opportunities faced by market players trying to adopt new technologies, from both markets and regulatory perspectives? Dirckx opens the discussion by outlining certain trends in the securities market. The focus is on more high-quality data and the shortening of the settlements cycle. Cross-border initiatives and regionalisation are some other aspects that have come up in recent years. Dirckx highlights, in particular, the different resources and the facilities available under SWIFT.
The discussion moves towards Asia, more specifically the securities market in India and the subcontinent. Chauhan weighs in on areas where investments are most needed, beginning with investing in open systems and infrastructures. “Indian markets are hugely cost-sensitive,” he affirms.
Regulators have already been in discussions regarding various aspects of risk management. Standardisation of key identifiers are a must here, says Krishnan. Moving to interoperability means that a minimum amount of risk-management infrastructure needs to be common.
■ 3.00pm: Tanksale believes that SAARC nations should share best practices amongst themselves and leverage on their existing common interests and motivations. Rajendran brings up the issue of standardisation -- a major factor towards facilitating cross-border trade and payments.
“The willingness to participate in regional cooperation is very important,” weighs in Ali. Banks can take up the mantle here, he says, by working with their counterparts in other nations.
Mathur adds that the inter-regional cooperation zone should also include nations such as Myanmar and Thailand -- regions with which we already have healthy bilateral relationships. Capturing data on trade-in services is quite challenging today, and that’s a concern that SWIFT can take up, he adds.
Innovations in payment is important for security as well as cost-saving in business, says Ali. Here, facilities like GPi which integrates different payment systems, can bring in significant change. In addition, one also needs to look into the technology behind clearings and settlements.
Next, Ranasinghe highlights some of the key challenges that hinder interregional trade and payments, with efficient interoperability being the need of the hour. “Communications between the involved countries can also be a hurdle sometimes,”adds Rajendran. Clearer communications will lead to more efficient exchange of payments, and consequently lead to improved understanding between them.
This brings us to the end of session 4. The final panel discussion of the day begins after a short break.
Leaders talked about the implications on payment systems across #SAARC countries #INSRC @swiftcommunity— Mint Events (@MintConclaves) May 8, 2018
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■ 2.45pm: SESSION 4: Panel discussion- Digitisation towards SAARC regionalisation and trade
Panelists: KD Ranasinghe, Deputy Governor, Central Bank of Sri Lanka, Arfan Ali, Managing Director, Bank Asia, Bangladesh, N Rajendran, Chief Technology Officer, NPCI, Akshay Mathur, Director, Geo-Economic Studies, Gateway House, and Mohan Tanksale, Ex- CMD, Central Bank of India & Ex-Chief Executive, IBA & SWIFT Consultant. Moderated by Eddie Haddad, Managing Director, APAC, SWIFT.
As local payments move towards real-time, there have been efforts to find linkages with cross-border payments. Given these market trends, what are the implications on payment systems across SAARC countries? How can local domestic payments go real-time across borders as well? What are the innovation imperatives for banks and other ecosystem players across SAARC to improve trade?
Interregional trade in SAARC nations is less than 5% of their total trade. Compared to Europe (60%) and East Asia (35%), the figures are dismal, says Haddad, going on to outline SWIFT’s resources in SAARC regions.
Mathur begins the discussion by highlighting the emergence of ‘trade in services’ and outlining existing regulations in place that help facilitate movement of services between nations. Ranasinghe stresses on the importance of forward-looking policies from a national level which fosters inter-region trade and exchanges. Monitoring and regulating payment systems is an important step here.
■ 2.20pm: The conversation steers towards collaboration. Bhasin talks about co-creating innovation with new-age startups and fintech players through effective partnerships. This encourages the startups to follow and improve upon industry-standards of security and hygiene.
By enlisting experts from not just IT but across sectors and domains, and leveraging their learnings in different situations, the industry can create a more wholesome approach towards collaborating against cyber risks.
A short Q&A session with the audience marks the end of this discussion.
■ 2.00pm: Bhasin believes that cybersecurity is part of the entire IT value chain - it shouldn’t be an afterthought, and definitely not the last item on your plate. Often, the risk of focusing only on high-end innovations is to overlook basic hygiene, weighs in Saravade, which can mitigate core, recurrent threats.
Ciminelli joins the discussion with an outline of SWIFT’s key role in cybersecurity. This includes taking responsibility for risks, sharing information on tackling new threats, and constantly updating and improving on own products. Information sharing among different stakeholders can help in mitigating risks in the long run, as it leads us to review and change existing market practices.
■ 1.45 pm: SESSION 3 (post lunch): Panel discussion- Operational risks and cyber risks: fallouts of technology advancements in banking
Panelists: Nandkumar Saravade, CEO, Reserve Bank Information Technology Private Limited (ReBIT), BalSingh Rajput, SP - Cyber, Maharashtra Police, Stefano Ciminelli, Deputy CISO, SWIFT, Rama Vedashree, CEO, Data Security Council of India, and Shiv Kumar Bhasin, CTO, State Bank of India. Moderated by Saqib Sheikh, Head of Sales Services, Asia Pacific, SWIFT
Cyberattacks on a nation’s financial institutions serve as a wake-up call for the industry to be more vigilant and proactive. What are some learnings from recent episodes, and how should banks prepare to deal with cyber security risks?
Sheikh begins the session with a slide from the Global Risks Report 2018 (World Economic Forum). Cyber risks, according to the report, is now among the top three risks in the world. The attack surface today has grown increasingly large and complex with paperless, cashless payments, and banking coming to the fore. As per an Ernst & Young survey of 124 Indian executives, a staggering 75% believe that cybersecurity functions do not meet the needs of their organisations.
Saravade believes that its not just important to invest in cybersecurity solutions but also ensure that the investments are being made in the right place at the right time. Rajput adds that just like private players, the government is also facing and tackling cyber attacks on a regular basis.
■12.27pm: Mahapatra takes the conversation to blockchain and how it is both computing-power intensive, as well as protocol intensive. It needs time to develop and adapt.
Corporate clients are largely not confident about the security of their banks, or so goes the general perception. Kannan indicates that the scenario has changed immensely over the past few years. As banks move fast on their digital journeys, they’re also strengthening their security frameworks.
With that, we conclude the second panel of the day with a break for lunch.
A range of experts from financial institutions, regulators, and MNCs talked about #Innovation and #trade digitisation at The SWIFT India and Subcontinents Regional Conference 2018@RajKiranRaiG @UnionBankTweets @mmahapatra @TheOfficialSBI @aphota @NPCI_NPCI#INSRC @swiftcommunity pic.twitter.com/3LImWZhn4D— Mint Events (@MintConclaves) May 8, 2018
■11.50am: Mrutyunjay Mahapatra discusses the challenges banks are facing with full-scale digitisation in trade finance.
Alain Raes believes that the biggest solutions in global trade finance are likely to come in parts. He hints back at SWIFT’s upcoming GPi payments platform -- introduced earlier in the day -- as one such tool to facilitate complex payments across the value chain.
AP Hota highlights the importance of building solutions at a population scale, especially in matters like trade finance, a highly paper-intensive process. To digitise across industries, a consolidated platform can become a simple yet common solution. The National Trade Processing Platform is one such superstructure.
■ 11.40am: SESSION 2: Panel discussion- Industry leaders panel on innovation and trade digitisation
Panelists: Raj Kiran Rai, Managing Director & CEO, Union Bank of India, VG Kannan, Chief Executive, Indian Banks Association, Mrutyunjay Mahapatra, Deputy Managing Director & CIO, State Bank of India, Alain Raes, Chief Executive, APAC & EMEA, SWIFT, AP Hota, Ex-CEO, NPCI and SWIFT Consultant, and Nitin Nadkarni, Chief Financial Officer, Sony Entertainment. Moderated by Prateek Roongta, Partner & Director, BCG.
Roongta begins with a comic on blockchain, eliciting laughs from the audience. The discussion moves on to the need for sustainable change in trade, with digital being a key enabler. “Technology has a very important role to play in the digitisation of trade finance,” he begins.He goes on to highlight a few ‘standout’ opportunities for digital innovation. These include intelligent automation and digitisation, finding emerging solutions (like harnessing big data, blockchain, etc) and industry disruptors (like IoT and additive manufacturing).
Rai weighs in on the challenges of digitisation in trade finance. “Digitisation will help us identify the buyers, the customers, and the customers of our customers”. It will help track payment patterns and identify defaulters.
■ 10.55am: The discussion moves on to risk and fraud, and the technological infrastructure required to tackle these concerns. Rajnish Kumar talks about how SBI has completely revamped its training system, with a focus on corporate banking and risk management.
“Leaving everything to technology is not the answer. The idea is to empower people to use and master new tools, and this is possible only through training and practice,” says Rajnish Kumar.
Jhaveri - At Citibank, our best corporate bankers are those who have had risk management experience. We’re now also moving on to the concept of sector expertise, not just in India but globally. We encourage deep vertical knowledge in our corporate bankers.
The final point of discussion is around pricing. “How do we see pricing evolving in the country?”
Rajnish Kumar - Pricing is a very dynamic issue. No one institution can control it. Down the line, it’s time to make some hard decisions -- especially to know when to let a bad deal go. Banks must move towards risk-based pricing eventually.
Ananthasubramanian - Collaboration is the way forward; we need to determine prices through RAROC (Risk-adjusted return on capital).
And that concludes the panel discussion. The conference adjourns for a short break.
■ 10.35am: SESSION 1: Panel Discussion- Digitisation & Ease of Doing Business
Panelists: Rajnish Kumar, Chairman, State Bank of India, Pramit Jhaveri, Chief Executive Officer- India, Citibank NA, Usha Ananthasubramanian, MD & CEO, Allahabad Bank, IBA Chairman, SWIFT User Group Chairperson. Moderated by Saurabh Tripathi.
Rajnish Kumar opens the discussion, “Faster decision-making can unlock a lot of capital, and will be beneficial for corporate banking, lenders, and the ecosystem as a whole.”
What is new at SBI? Tremendous changes in the personal banking forefront with YONO (SBI’s digital banking platform). In corporate banking, digitisation is a much wider term. There are plans for using data analytics in a big way, given SBI’s immense database. This is also creating new jobs and opportunity in the industry itself.
Jhaveri says, “We are passing through a phase where the narrative is dominated by some amount of bad news; but that shouldn’t cloud our outlook of the future”
India has undergone a massive digital revolution, both for individuals and households as well as for corporates and businesses.
The important question, adds Jhaveri, is how do we use this massive amount of information and data on our platforms to the benefit of our users and our organizations? At Citibank, one of the examples is industry analytics, which encourages insightful discussions among partners and stakeholders to track patterns on a global scale.
■ 10.23am: Nilekani moves on to the buzzword of the year: Artificial Intelligence. He says that the approach globally is either convenience-driven, or it has a job-substitution, or a surveillance agenda. In India, AI will have more widespread impact and possibilities.
For example, amplifying the skills of public school teachers with AI, or supporting paramedics in remote areas through AI. We have to think of using AI to amplify capabilities and reach more people.
“Today India has 600 million people who have linked their unique IDs to their banks. $17 billion have been transferred using this programme - possibly the world"s largest cash transaction programme." - Nandan Nilekani, @Infosys at #INSRC @swiftcommunity pic.twitter.com/bja3C8Ra10— Mint Events (@MintConclaves) May 8, 2018
■ 10.05am: Nandan Nilekani, Co-founder & Non-Executive Chairman, Infosys, and a recipient of several awards and recognitions like Top 100 Global Thinkers 2010, steps up for the keynote address. Begins with an overview on Digital India.
“Today India has 600 million people who have linked their unique IDs to their banks. $17 billion have been transferred using this programme - possibly the world’s largest cash transaction programme.”
GST will make it dramatically simpler for companies to file returns, he says, giving an overview of upcoming simplifications in the process that are currently in the works. “For the first time, we will have a centralised database of every B2B invoice in the country, possibly creating the world’s largest bill-discounting market”.
He talks about how GST has brought the level of technology in each state to the same level, since they all operate out of a common tech platform.
How can we use proliferation of data generated in the country to improve the lives of our people? We have the infrastructure now to make data empowerment possible, thanks to tools like unique IDs, smartphones and unified payment systems.
■ 9.50am: Saurabh Tripathi, Senior Partner & Asia Pacific Regional Leader Financial Institutions, BCG takes the stage for a special report launch by BCG (knowledge partners for the event). Alain Raes (Chief Executive, APAC & EMEA, SWIFT), Kiran Shetty, Pramit Jhaveri (Chief Executive Officer- India, Citibank NA), Usha Ananthasubramaniam (MD & CEO, Allahabad Bank, IBA Chairman, SWIFT User Group Chairperson) all come on stage to launch the report, Corporate Banking in India - A call for action.
According to the report:
•45% banks are showing decline in profits.
•50% corporate banking divisions have return on capital below the hurdle rate.
•10 Percentage Point difference in pre-tax returns on regulatory capital between top quartile and bottom quartile banks.
He discusses seven emerging themes for winning in corporate banking. These are, creating industry specialization, unlocking the full potential of pricing, rebooting the corporate relationship manager model, digitising customer journeys, exploiting the power of analytics, using innovative ways for lending, and enabling organisations against security breaches.
■ 9.30am: Gottfried Leibbrandt, CEO, SWIFT, begins with the event’s opening remarks. He starts with a global perspective on digital transformation, with a focus on two core areas.
First, its impact on global correspondent banking. He discusses SWIFT’s newest innovations in the area— a payment system that facilitates global payments at a much faster and bigger scale, called GPi.
SWIFT plans to make this the default payment system by 2020. He goes on to mention a new customer security program to address the current cybersecurity crisis. SWIFT is collaborating with banks, regulators and anti-virus software developers to fight these challenges. The company will also set up new digital tools, with alarms and triggers to detect security threats. This includes a new “payments control” tool that blocks payments that fall outside your set parameters. Leibbrandt concludes his overview on SWIFT global with an optimistic note on India and its huge potential not just in terms of cross-border payments, but also immense potential within the country.
■ 9.27am: “SWIFT India is critical to the financial community in India”, he begins. He goes on to give an overview of the organisation and its many roles and function. It is ‘by the community, for the community”- MV Nair
M.V. Nair, Chairman of Board of Directors, SWIFT India, takes the stage at India and Subcontinents Regional Conference 2018— Mint Events (@MintConclaves) May 8, 2018
Stay tuned for more LIVE updates.@swiftcommunity #INSRC pic.twitter.com/TD3A6GiwF3
■ 9.20am: We’re all set to begin with the SWIFT India Regional Conference 2018, at St Regis Mumbai. Kiran Shetty, CEO & Regional Head, India & Subcontinents, SWIFT, begins the welcome note.
The core themes of today’s event as introduced by Shetty are, digitisation, innovation, and cyber security. He goes on to mention how collaboration among banks, partners and institutions are the only way forward.
MV Nair, Chairman of Board of Directors, SWIFT India, takes the stage.