On the third day of Sibos, we solved security, data and all future issues. Well, that’s not quite true. But there were quite a few talks on the topic.
Payment Providers, Are You Ready?
Preparedness for what’s coming was a huge topic for day three of Sibos. Maybe that should be preparedness for what’s already here?
There was a great deal of conversation around whether payment providers are ready for a 24/7 world and a 24/7 economy. Things that have existed for a considerable time already. Being ready for the present goes back to the issue of standardization from previous days and making sure that businesses are able to have a high degree of interoperability.
However, working together isn’t just about standards, it’s also about building systems together. The old adage of ‘build it and they will come’ does not apply in the financial industry. If you build alone then you will be alone.
There is a need to homogenize how payments are utilized to make sure everyone benefits. Standardization brings in reliability and an understanding of what the customer experience will be no matter where you are in the world. When customers see a Visa or Mastercard logo they know exactly what to expect. Replicating that is necessary for the future of payments.
Of course, what exactly that future will be is still up for discussion. QR codes were mentioned for some reason, but they’ve not seen any traction outside of the APAC region. It’ll be interesting to see what structures the payments companies come up with to handle the 24/7 economy.
Real-time vs Data
It’s worth noting that ‘real-time’ has vastly different levels of importance depending on where you are in the industry. It may be of vital concern to payment providers but corporates are significantly less concerned.
Value vs cost is the real debate for corporate entities. And that’s where batch processing still has life because at a large enough scale batch processing is accurate enough for the corporates to provide value while being cheaper than real-time.
For real-time solutions to be able to compete with batch processing at that level it needs to drive down cost while raising value. And here’s where it gets interesting, according to the buzz at Sibos, corporates biggest concern is around the lack of data.
If real-time can continue to improve and deliver better quality data at larger quantities (which it will) then there’s not much of a future left for batch processing. After all, it’s impossible to innovate around bad data – and at the inflection point where real-time data outperforms batch processing at every level, those who don’t innovate won’t survive.
Security in the age of connectivity was big on day three. Specifically the issue of how to address modern cyber threats when there’s no time to address them.
For all the benefits of hyperconnectivity, it does leave institutions more open to risk as breaching one company’s security may lead to breaching several others due to access. In addition to the weaknesses of hyperconnectivity, the opposition has become more complex.
Before, unlawful state actors and criminal actors had separate agendas and worked separately. Now they’re united by money laundering goals and work together. It’s not just the industry that’s becoming hyperconnected.
A lot of this comes from the issue of data analysis. Industry leaders are convinced that the data already exists to identify criminal and unlawful actors, it’s just an issue of aggregating and analyzing it correctly.
There’s also an undercurrent of belief that businesses owning risk makes them far better at handling risk elements. It makes perfect sense that companies would put more effort into compliance when they’ll be held accountable for it.
That wraps up the third day of Sibos. We’re still at our stand 32C but it’s Talent Day so you’re more likely to find one of the team at the many networking events happening today.