The main theme for the Swift Regional Conference in Copenhagen this year is disruption. The programme will explore the different challenges arising from newcomers, technology and regulation. It will look at how the financial industry can cope and turn these challenges into opportunities.
Thursday 5 March 2015
Editor's note: All times reflect local time in Copenhagen, Denmark
16.00: Conference ends. Blog ends. The end. Fin.
15.59: Concluding thought comes from Danske Bank’s Haugaard : “There is a lot of knowledge in banks. Don’t give up the fight, but be prepared to fight,” he says. The market is certainly getting tougher and it is up to participants to rise to the disruptive forces impacting FS, which have been outlined here at this conference.
15.56: Amusingly, Swift’s Aggarwal mentioned some of the challenges facing this conference. “There was a strike locally involving staff at a low-cost airline, and in Belgium [Swift’s HQ] taxi drivers were on strike against Uber", making it hard for some speakers to get to the airport. The conference happened, however, and attendees have stayed behind to hear this concluding panel.
15.44: Marianne Sorensen, Head of Securities Operations at Nordea is aware that the securities sector is moving from development phase of post-crash regulations into the implementation stage now. T2S is a good example and has been much discussed here today.
15.39: In response, Soren Haugaard, SVP, Global Head of Trade & Supply Chain Finance at Danske Bank is saying banks need to be agile. “We need to be agile enough as an industry to navigate these challenges and indeed turn them into opportunities.”
15.35: Arun Aggarwal, Head of UK, Ireland and Nordics, EMEA, Swift is reminding attendees of the key conference theme of disruption. It’s been debated from a regulatory angle; a technology angle; and from the perspective of new entrants challenging existing FS firms and threatening disintermediation.
15:30 – 16:00 Closing plenary
• Soren Haugaard, SVP, Global Head of Trade & Supply Chain Finance, Danske Bank
• Marianne Sorensen, Head of Securities Operations, Nordea
• Arun Aggarwal, Head of UK, Ireland and Nordics, EMEA, Swift
15.30: Erica Åhman, Head of Swift Nordics, is thanking everyone for coming to the Swift Nordics 2015 conference.
Nice touch here. She is explaining that Swift has made a EUR10,000 donation to SOS Children’s Villages International, before handing over to a representative from Finland who provides delegates with an overview of the children’s charity. The final panel of the day is preparing in the background as she speaks.
15.23: Panel ends: “MIs have a central role to play in encouraging ISO20022 adoption,” concludes Swift’s Kennel. The banks on the panel can help too. ISO20022 universal adoption will take the active participation of everyone.
15.20: The floor is thrown open for any more audience questions now, but unfortunately attendees have already asked the questions they wanted answering and are keen for their coffee break, so Swift’s Kennel sums up.
15.15: VPS’ Moe is now entering a plea for Norway, Sweden, Finland and Denmark (the Nordics) to work together to ensure they’re all standardised on ISO20022 by 2025. “That is a global challenge as well, of course,” he adds. “I expect Swift to help us with this.” Things are hotting up here for Swift's standards man, Lindsay. Tough crowd.
A. It’s green for yes! Yes, by 2025 we’ll have ISO2002 widely adopted thinks this securities audience at the Swift Nordics 2015 Conference. “It might have been a closer vote if we’d said 2020 instead,” says Swift's Kennel. True.
15.10: The panel moderator, Swift’s head of MIs, Juliette Kennel, is asking the audience to hold up their green cards for yes, or red for no, in answer to the question:
Q. By 2025 will we have universal ISO20022?
15.04: “Having three different formats to support in our operations is expensive,” continues Nordea’s Sorensen, as she robustly articulates the bank viewpoint. “We’d really like one standard!”
A plea for Swift to address there and something perhaps addressed to Stephen Lindsay, Swift’s Head of Standards on the panel, who updated delegates earlier about the organisation’s efforts.
15.01: Great comment from Marianne Sorensen, Head of Securities Operations, Nordea. “Yes, ISO20022 is a good standard but as a bank we still have to co-exist with ISO15022 and other standards.” That is the banks' beef right there.
14.56: Bjorn Stendorph Crepaz, Head of Issuance and Safekeeping, CSD Services, VP Securities, speaking as an MI, is making the case for ISO20022 and perhaps trying to get some of his refusenik colleagues from Norway and Sweden to join him. “We’re all best off if we all adopt ISO20022 together,” he says.
14.51: Kjell-Ivar Moe, Head of Customer Relations New Core System at VPS is talking about T2S’ impact locally in the Nordics and specifically in his country of Norway.
“It is important for us (and others). Norway will join T2S. The question is when and how.”
14.45: We’re talking T2S again. It is a huge project and is animating the room. As mentioned in yesterday’s Day 1 blog Sweden and Norway aren’t yet joining T2S, or getting the ISO2002 encouragement that joining it would provide.
14.38: Panel session begins: Juliette Kennel, Head of Market Infrastructures, Swift (moderator) introduces the panel. She is moderating it with Isabelle Olivier, Head of Clearing & Settlement, EMEA at Swift, who starts with a brief reminder of the Nordic securities environment that was discussed on Day 1 during her securities session - see blog:
14.33: ISO 15022 is being replaced by ISO 20022 as well, explains Lindsay, although as he points out Swift cannot force individual banks to adopt it. It’s a process of encouragement.
14.29: First mention of FPL (FIX) in this securities discussion. Lindsay is explaining the syntax for this will be incorporated, under questioning from the securities audience. Important for funds handlers to know this.
14.25: This is all well and good but how then have we ended up with 19 different flavours of XML ISO20022 during the intitial migration phase of SEPA? Corporate treasurers handing payments are less than pleased about this. However, Swift's Community Management programme is aimed at MIs, and cannot harmonise national regulators. It's a problem.
1422: Swift’s MT messaging series is also standardising on ISO20022 as well, explains Lindsay. He is now outlining the Swift Community Management programme for MIs, which is trying to coordinate the standardisation drive for ISO20022.
1419: “In the securities area you’ve got DTCC using it, JASDEC and T2S in Europe,” says Swift’s Lindsay. T2S is obviously going to the big thing and it will have ripple impacts as those connecting to it assign up for IS0 20022 as well.
14.11: Why use ISO 20022, asks Swift’s Lindsay?
- To enable new services
- Streamline end-to-end processes (e.g. T2S)
- To facilitate regional integration (e.g. SEPA; SADC - Southern African Development Community; etc)
14:02 Stephen Lindsay, Head of Standards at Swift opens the session with an overview of ISO 20022. “It’s been around for 10 years,” he explains. “There are more than 200 different global initiatives using it that we’re tracking. It’s mainly MI market infrastructure driven.” Swift is also standardising its MT messaging series on it.
14:00 – 15:30 Securities stream sessions - Making ISO 20022 work, presented by Stephen Lindsay, Head of Standards, Swift.
- Knut Haugan, Head of Settlement & Corporate Actions, Securities Services, DNB
- Kjell-Ivar Moe, Head of Customer Relations New Core System, VPS
- Isabelle Olivier, Head of Clearing & Settlement, EMEA, Swift
- Bjorn Stendorph Crepaz, Head of Issuance and Safekeeping, CSD Services, VP SECURITIES
- Marianne Sorensen, Head of Securities Operations, Nordea
- Juliette Kennel, Head of Market Infrastructures, Swift (moderator)
14.00: The Swift Nordics 2015 conference now splits into a securities and a payments stream. The Finextra blog will be following the securities stream.
12.30: Session ends. Lunch.
12:30: If a global real-time payments structure is to be created one thing is for sure. It will require standards. As Lasker mentioned earlier that is where Swift should come in. Along with others, it can help to support the adoption of ISO20022.
12.24: “Some kind of compromise will be necessary,” admits Nets’ Korsgaard, if a federated solution is ever to come to pass.
12.21: The panel has moved on to debate interoperability, ACHs and if a federated real-time payments structure will be created across the Nordics, Europe and perhaps eventually the world.
A. (from DNB’s Flatraaker): “They can be used to link in with financial crime compliance services, sanctions screening, fraud detection and all kinds of things.”
Q. The first question is: 'What can real-time infrastructures be used for: cross-border and operationally'?
12.16: At last the panel debate begins with Robert Widmark, Senior Account Director, Swift, moderating it and asking the questions.
12.13: Nets is also ISO 20022 and SEPA compliant. “We can turn that switch on when we want,” adds Korsgaard.
12.11: The service level agreement (SLA) for Nets’ is that a payment should be processed within 1.5 seconds. “We’re actually way beyond that. 10 milliseconds is our average time,” says Korsgaard. That’s real-time!
12.06: “Nets’ Danish platform is intra-day and real-time,” says Korsgaard, claiming it was voluntary, “but there was encouragement from the central bank in Denmark.”
The intra-day functionality will certainly be useful for corporates seeking data rich payment information and in the coming Basel III era where collateral and capital is much more important than it used to be.
12.03: “Denmark is the newest kid on the block in terms of having a real-time payments system,” says Nets’ Korsgaard. “Usage numbers are already beyond what they had in Sweden. It’s growing very fast.”
11.58: Nets is up next, let’s hear from an infrastructure provider. Stig Korsgaard, Engagement Director, Nets, walks up to the stage … Not much of a panel debate here; just a series of presentations.
11.52: First mention of API Banking. A big technology 'hot topic' at the moment, but Application Program Interface banking is really just the re-branding of the old concept of swapping apps in and out of an infrastructure seamlessly. It's a great idea if you can get it to work. The concept is fine, delivery is another matter.
11.48: Swish take-up numbers from SEB: 2.1m users, payments per month now running at 3.3m.
11.45: “Swish is very much smartphone-based,” says SEB’s Bergman. Social media is no doubt part of their calculation as well, because they want other payment service providers (PSPs) to use the platform.
Swish also has a small-scale B2C payment capabilities for small businesses, which it has added to the initial consumer-focused launch.
11.41: Henrik Bergman, Senior Manager, WCM Market Infrastructure, SEB, is now talking about Sweden’s payment infrastructure and especially Swish, its mobile peer-to-peer (P2P) real-time payments offer. “Wanted to create customer delight,” he says, referencing this morning’s opening speaker, the co-founder of Skype.
11.38: DNB’s Flatraaker is focusing on SEPA and updating the audience. As a sometime participant in the Mobey Forum he is understandably talking about mobile payments too, plus proximity contactless payments. “We’re entering a digital revolution,” he says.
11.34: Dag-Inge Flatraaker, General Manager DNB Bank & Co-Chairman of the Cards and Mobile contactless proximity payments Working Group at the Euro Retail Payments Board (ERPB) starts off the panel session by giving an overview of cards; regulation, SEPA in particular of course; real-time payments, P2P players and some of the potential disruptors out there targeting the payments arena. Payments is in the firing line for tech disruptors.
11.32: We’re now moving into the panel discussion element of this session.
11.26: Swift's Lasker is now highlighting the Australian faster payments and settlement initiative. “It’s being pushed through by the domestic community,” he says. “Swift’s role is to support standardisation (which these strcutures rely upon).”
11.21: Swift’s Lasker is running through some real-time payment user cases, highlighting how real-time can perhaps help to fight newcomers to the market and give banks a way to battle newcomers to the payments market, which want to disrupt this space. If a technology company is offering fast payments, tracking capabilities and other data rich services you’d better too, he is essentially saying.
“You need to move to a 24x7 operational model as well,” points out Lasker. “That requires investment.” Stanardisation is necessary too: ISO 20022 is required.
11.11: “Norway is discussing implementing a real-time payment system,” says Swift’s Lasker. “Canada too. This is a rapidly evolving market.”
11.05: Elie Lasker, Senior Market Manager, Swift, is doing the introduction to this real-time payments session laying out the market landscape, the benefits of real-time payments, the evolution of real-time payment infrastructures in the UK, Singapore, Poland and elsewhere in the world. The Nordics is a fairly advanced market in this regard. Mobile payments is often a driver, as it was in Sweden. Ditto with SEPA and other such payment regulations.
11:00 – 12:30 Payments stream session - Next stop: Real-time payments
- Henrik Bergman, Senior Manager, WCM Market Infrastructure, SEB
- Stig Korsgaard, Engagement Director Nets
- Dag-Inge Flatraaker, General Manager DNB Bank & Co-Chairman of the Cards and Mobile contactless proximity payments Working Group at the Euro Retail Payments Board (ERPB)
- Elie Lasker, Senior Market Manager, Swift
- Robert Widmark, Senior Account Director, Swift, (moderator)
The Swift Nordics 2015 conference now splits into a securities and a payments stream. The Finextra blog will be following the payments stream.
10.38: Coffee break. Bitcoin was so interesting the session overran. The Swift Nordics 2015 conference attendees take a break.
10.30: The likelihood is that transaction fees will fall as the block chain distribution model gains popularity. That would be disruptive.
“Our technology allows fiat and crypto-currencies to exist in parallel, “ says Epiphyte’s Patrick. “I think this technology is the future,” she concludes. Maybe, but there is some way to go yet. Regulation, the criminal uses Bitcoin can be put to [a la Silk Road] and how to best use the block chain are all still to be resolved.
10.29: The collapse of Mt. Gox is now being discussed with the panel arguing that the collapse of one ‘exchange’ shouldn’t be taken as proof that this concept cannot work.
So, there is security there, a distribution network and a business model.
10.27: “Wells Faro is looking at this area, using Ripple, as our lots of other banks,” says Skinner, arguing for the block chain. “You could use the block chain for mortgages title deeds as well. Once you have an irrevocable agreement on the block chain you have to give up your private key to release it. A couple have even got married using it.”
10.25: The panel is moving towards its conclusion by discussing the block chain in detail, if banks can leverage this technology and how. “Yes, banks can use the ledger model”, says an audience member. “Why not?” whether, they will or not is another matter.
10.18: The panel responds by saying yes, there are special factors in FS but it’s not unique. Things can and do change.
Look at the move from national currencies to the euro, says CoinJar’s Smyth, while Skinner talks about Second Life and how it "eventually came to realise that to be a virtual bank you actually have to be a bank in real life as well" [referring to the case where a virtual bank was ‘deleted’ overnight]. Linden dollars anyone? Interesting.
10.11: Arun Aggarwal, Head of UK, Ireland and Nordics, EMEA, SWIFT, starts off by launching a stout defence of FS, saying that, “we’re different to the newspaper industry and it won’t be so easy for technologists to disrupt us.” A bold statement but he backs it up stating that all money is digital now anyway, especially after quantitative easing (QE), and FS is interwoven with governments who police fiat currencies. That is a guantlet being thrown down I believe!
Into an interactive debate now with the audience asking questions of the panel and vice versa, about if BTC will replace fiat currencies?
10.03: Skinner is now talking about Ripple and other players in this market and how big tech vendors are now putting money into this sector. “Reid Hoffman, the co-founder of LinkedIn and others are putting money in, proving there is something here and forcing FS to take a look and recognise this is not a Wild West outsider interest anymore.”
10.01: Epiphyte's Patrick is explaining that the Bank of England (BoE) has expressed an interest this year in creating its own currency. “That shows how crypto-currencies are becoming understood and accepted.” True, but they’re also being regulated more now and that is likely to accelerate. New US licensing rules were introduced this year, for instance, on BTC traders.
09.56: Bingo! There's the first mention of the block chain by the third member of this Bitcoin panel, Chris Skinner.
09.51: Gabrielle Patrick, co-founder, Epiphyte explains that her firm helps others leverage the technology aspect of Bitcoin, aka crypto-currencies. “We don’t deal in BTC but helps companies use the network,” she says.
09.48: The panel has now taken to the stage. Lui Smyth, UK General Manager of Coinjar, a recent winner at Finovate in London, explains that his firm CoinJar is a wallet and an exchange that is aimed at consumers who want to use Bitcoin.
09.44: Actually that video wasn’t so short, but it was informative. As Johnson says there were ledgers, messaging, encryption, and so on, all mentioned in it. “All things banks know about.”
09.34: Swift’s Kevin Johnson is playing a short video explaining what Bitcoin is and the concept of crypto-currencies. Bet the block chain will be mentioned once the video finishes.
09:30 – 10:30 Innotribe plenary: Beyond Bitcoin is the first panel session of the morning, introduced by Kevin Johnson who describes Swift's innotribe as, "the innovation arm of Swift".
• Gabrielle Patrick, Co-founder, Epiphyte
• Chris Skinner, Chair, The Financial Services Club
• Lui Smyth, UK General Manager, Coinjar
• Kevin Johnson, Innotribe Startup Challenge Manager, Swift(moderator)
09.30: Kjellberg concludes by saying: “Ask yourself: What are you selling, to whom, and why?” Answer that and you’ll be successful.
09.29: Kjellberg sums by citing Ikea, Ryanair and other disruptors with low-cost operations. "Does the fast always beat the slow," he asks again. "Yes, but it's not the only factor."
The four business lessons he has talked about apply:
- Be low-cost
- Have a good business model
- Delight your customers
- Be persistent and have frequency.
09.26: Skype has no business number on its site, on its card, anywhere. “If you don’t like it, leave,” says Kjellberg of his co-creation. Skype has a low cost business model and it has disrupted telcos. It’s a disruptor. Same thing can happen with banks. Fourth business lesson: keep costs low.
09.23: Kjellberg is now talking about H&M, a big Nordics fashion retailer. “They’ve been successful because they delighted their customers, but also because they are friction-free,” he says, pointing to their online operation and fast fashion business model. “You also need a good business model.” Third business lesson learnt.
09.17: "Innovate don't imitate," says Kjellberg. Delight your customers, and you'll be successful.
A second lesson learnt: “delight your customers,” says Kjellberg. That is what innovators do.
09.11: Kjellberg is now talking about his time with Lycos, then the second largest search engine in the world. They were soon overtaken by a little company called Google that just grew and grew. Why? Well, because they had a better product. It’s simple, frequency only gets you so far.
09.04: Kjellberg was advised that it's a frequency game. He learnt a simple equation:
- 100 knocks
- 10 talks
- 1 yes (and 1 sale).
09.01: After five years at university Kjellberg didn’t know what he wanted to do or how to sell so he asked his father and his friend the head of Electrolux want to do.
Kjellberg is now talking about how to set up and run a company. If you are a CEO and aren’t sure what you want, then what do you do? “You hire a consultant of course,” he jokes.
A. The answer according to Kjellberg is both. “It’s not always true that the fast firm wins. It depends.”
A small majority of the Swift Nordics 2015 conference votes for fast.
08.55: Having an audience vote now to wake the packed room of a couple of hundred people up. Kjellberg asks:
‘Q. Will the fast beat the slow or the big?’
08.52: “All my life I’ve been obsessed with what creates game-changers. It’s interesting in FS at the moment because you’re going through this now. Lots of people want to challenge banks.”
08.45: Jonas Kjellberg starts by explaining he has not just been involved with Skype but was also chairman of iCloud, an online shoe company and many many other firms. He’s a serial innovator so ideal to speak about one of the key themes of the conference: technology disruption.
08:45 – 09:30 Innovation / motivational keynote
- Jonas Kjellberg, one of the creators of Skype and lecturer at Stanford and the Stockholm School of Economics
The crowd is gathering here ready for the second day of the Swift Nordics 2015 conference. Th opening speaker will be one of the creators of Skype, Jonas Kjellberg, so it should be interesting. Erica Åhman, Head of Swift Nordics, is just welcoming everyone ...