Key Themes and Takeaways from SIBOS 2024

Last year's SIBOS 2024 was a melting pot of ideas, innovations, and discussions which underscored the dynamic nature of the global banking landscape. The event brought together industry leaders from around the world, each sharing insights on the future of banking amidst shifting economic, technological, and regulatory environments. And for the first time it was held in Beijing, China.

Below, I reflect on the prevailing themes that emerged from the conference and the implications they hold for the sector. 

Instant payment and emerging fraud challenges 

One of the standout themes centred on the universal shift towards instant payments. As nations adopt faster payment methods, the immediacy and convenience come with heightened risks, particularly fraud. 

This past year, we've witnessed a significant uptick in fraudulent activities, especially those orchestrated through social media channels such as phishing scams and investment schemes.  The banking sector’s pivot to instant payments demands robust fraud prevention strategies. It’s clear that as an industry, we must enhance our vigilance and continue adopting advanced technologies to safeguard transactions. 

Leveraging artificial intelligence (AI) and machine learning can help in real-time fraud detection and prevention, thereby fostering a safer banking environment for consumers. AI and automation can also play a role in improved management of any customer service issues or requests linked to payments and access to funds and credit.

The evolution of cross-border payments 

The discussions around cross-border payments were particularly interesting. With the Chinese Yuan solidifying its position as the fourth most utilised currency globally, the landscape of international trade is undoubtedly evolving. China itself is focused on how to adjust to what it calls ‘the weaponizing of currency flows’. This makes sense when you put yourselves in their shoes, as they seek to protect and strengthen their position with trade and associated currency flows. Shifts in currency flows is also closely tied to the rising influence of fintech players who continuously innovate in this space, challenging traditional banking norms and offering novel solutions that promise greater efficiency and inclusivity. Recent failure of the ‘Zing’ app launched by HSBC to compete with the likes of Wise and Revolut, show how difficult it is for the more established banks to compete.

With that said, the sector still faces significant hurdles at its core including regulatory compliance, transactional costs and speed and security concerns that impede seamless global transaction flows. Margins are being squeezed through both expectations of customers and competition for business. As we move forward, the development of frameworks that can support a diverse range of currencies and conform to varying national regulations will be critical in maximising the potential of cross-border payments.

Diversification of Payment Methods 

During the proceedings, the declaration regarding China’s own currency payment clearing was a pivotal moment. This highlighted the broader theme of payment method diversification, by both nation states, central banks and companies. This shift is part of a larger narrative where countries and corporations are increasingly motivated to mitigate the risks associated with sanctions as well as geo-political risks.

These strategic shifts in payment modalities suggest a need for flexibility in transaction mechanisms to accommodate a changing global political and economic landscape. Banks will need to evaluate their team setup, processes, policies and supporting technologies to adapt to this changing complex environment. 

The Swift Transition to ISO 20022 

A critical technical discussion at SIBOS 2024 was the migration to ISO 20022, a new standard for financial messaging that promises more precise, less error strewn data transfer across global networks. The focus was on the ability of the broader base of mid-size and smaller banks to be ready in time. 

This transition is more than a technical upgrade—it is a fundamental shift towards greater global financial coherence and efficiency. It also requires some re-engineering of processes and policies, as well as technology to ensure that banks are adequately prepared for this change. 

SIBOS 2024 reinforced the notion that the banking sector is at a pivotal moment in time. The evolution towards more immediate, diverse, and secure payment systems, coupled with the strategic shifts in international finance and geo-political turbulence, sets a dynamic stage for the coming years.

As we consider these shifts, the path forward requires that we continue to evaluate team structures, processes policies and technologies to navigate these changes.