This year Sibos* took place as a virtual event for the very first time, reflecting the rapid shift to remote working across many industry sectors. The annual conference, which was originally scheduled to take place in Boston, USA, featured 70+ sessions with more than 200 speakers and a staggering 18,000 delegates, making it the biggest Sibos to date.
Naturally, many of the conversations at Sibos 2020 centred around the Financial Services Industry's response to the pandemic, with organisations of all sizes having to adapt quickly to the rapidly changing retail and finance landscape. The consensus was that COVID-19 had led to an incredible two years' worth of digital transformation in just two months. This rapid change is being accelerated by approaches that use a combination of emerging technologies, such as edge computing, big data, Robotic Process Automation (RPA) and machine learning.
Finextra* in association with Intel, will shortly be releasing a detailed Sibos 2020 report. In advance of that, we wanted to share a high-level summary of the six key trends.
1. Banking continues to shift towards a cloud-enabled platform business model
Leading global banks are continuing to shift towards a platform-based model, supported by a hybrid multi-cloud framework. To accomplish this, they are building tighter strategic partnerships with cloud providers. An example is the partnership that Deutsche Bank* and Google Cloud* announced in July this year1. This kind of high-profile collaboration is likely to be a key trend in the near future.
2. Trusted execution is the solution to data sovereignty
As data is subject to the laws and governance of the country where it is collected, this data sovereignty can potentially prevent its use or storage in other markets. This presents a major challenge for global financial organisations that work across multiple geographic locations, particularly when it comes to cloud adoption and platform strategies. At Sibos, confidential computing was discussed as the solution to this problem. This involves the protection of data while it's being processed, rather than only when it's at rest in or transit. This is achieved by carrying out computations in Trusted Execution Environment (TEE) or 'enclaves'.
Just last week, Intel announced new data security and privacy capabilities called SGX to help the industry address this issue on the upcoming 3rd Generation Intel® Xeon® platform.
3. Automation and AI must be ethical and explainable
Automation and AI are now widely used for certain tasks but the technologies are still very much in their infancy in terms of their full potential. The importance of looking at how these technologies will be used in the near future and in the longer term was a key focus at Sibos. The need to make AI ethical and explainable requires new technology that can enable the measurement and explanation of input, processes and outputs. Specialist providers are beginning to provide solutions in this area so this is something that we're likely to see more of in the near future.
4. Customer experience should be a key consideration for innovation pathways
A report released at Sibos from Deloitte* and the World Economic Forum* describes the multiplicative impact of emerging technologies in FSI2, in the context of three innovation pathways. As banks innovate using these pathways, it's essential that they keep customer experience at the centre of their strategies. However, customer expectations are changing and this must be taken into account when developing personalised services. Taking a dual approach to customer experience for B2B and B2C banking is no longer viable.
5. Environmental, social and governance (ESG) strategies are good for attracting new talent
Not only is focusing on environmental, social and governance (ESG) strategies a question of good ethics for banks, there is increasing evidence that it can also have positive business outcomes. At this year's Sibos, sustainability was underscored as a key trend for FSI businesses, with many major banks leading the way in encouraging governments to implement emission reduction targets. Projects addressing social issues were also highlighted as a way to attract the best young talent in the FSI sector.
6. The global cyber security workforce gap must be addressed
The rapid shift to remote working presented a major challenge for FSI businesses in 2020. The need to scale up remote working capabilities while also ensuring data security was a key focus, as well as mitigating the risk from an increasing number of cyber-attacks. One of the key issues facing FSI businesses in the short term is the global cyber security workforce gap. Strategic hiring and training will be essential in addressing this. A more long-term concern in the financial world is the arrival of commercial quantum computers, which could result in existing encryption methods no longer being robust enough.
More to come in the full Finextra and Intel report.