Sibos 2010: Will SEPA Bloom in Amsterdam?

19 Oct 2010

The three themes of Sibos 2010 are regulation, rebuilding trust and recovery. But topics such as the SEPA end-dates, risk, cloud computing and social media will also be creating a buzz on the conference floor.

After much talk at the EuroFinance conference earlier this month about the need for the regulators to step in to set an end-date for the single euro payments area (SEPA), which would retire legacy payment instruments in favour of the SEPA Credit Transfer (SCT) and Direct Debit (SDD) schemes, the powers that be have taken a step forward. At a European Payments Council (EPC) meeting on 14 October, Gertrude Tumpel-Gugerell, a member of the executive board of the European Central Bank (ECB), made the bold statement that “not having a regulation is not an option” with regards to an end-date.

But with only 9.3% of all euro area credit transfers processed as SCTs, and well below 1% of all euro area direct debits processed as SDDs as of August 2010, there is a long way still to go. On the positive side, adherence will be ensured for the SDD scheme in November 2010, as banks will be legally obliged to be reachable.

Tumpel-Gugerell said that the ECB still has a preference for two different migration end dates for the SCT and SDD schemes: November 2012 for credit transfers and November 2013 for direct debits. However, it is the European Council and the European Parliament that will determine the actual end-date.

But this means that SEPA will again be a hot topic at Sibos, SWIFT’s user conference, in Amsterdam next week. Sean Fitzgerald, chief executive officer (CEO) at Sentenial, a specialist provider of SEPA payment solutions for banks and corporates, believes that this push to set an end-date will catalyse activity in the market. He highlights the impetus for corporates: “As soon as an end-date is published, then every day compounds corporates’ problems - every new mandate for direct debits that they set up in a legacy system will cost them in the future when they migrate to the SDD scheme. Through this process, corporates could possibly lose customers and will certainly incur costs, unless they start to act now.”

On the other hand, Amanda Gilmour, product director for anti-money laundering (AML) and straight-through processing (STP) at Temenos, believes that SEPA fatigue has set in. She is unconvinced that proposed end-dates will revive the subject. “It has been discussed, understood, and thrashed to death over the last few years,” she says. But she does think that other regulations will be topping the agenda, such as Basel III.

Regulation is one of the three ‘Rs’ that SWIFT has identified as the main themes of the Amsterdam conference, alongside rebuilding trust and recovery.

Sibos 2010: Big Debates

Sibos is recognised as a premier financial networking event, where the high-level decision-makers gather to do business. At Sibos in Hong Kong last year there were 5,782 attendees, according to SWIFT, with 24% at the managing director/director/executive vice president level. The primary market focus was payments, with 33% of the attendees, followed by cash management (21%) and securities and trade services (16%). The highest majority of participants were from commercial banks (36%), software supplier/consultancy (25%) and investment and central banks (5%). Corporates made up 7%, or 404 attendees. The majority of participants in Hong Kong were from Asia-Pacific (42%) and Europe (40%).

This year SWIFT is expecting 8000 attendees - similar to the number registered in Vienna in 2008.

The Sibos conference programme has been built around three themes:

Regulation

The conference will debate the industry’s collective response to regulation following the financial crisis and examine the operational impact of financial reform.

Basel III will be on the lips of many, as explained by Jamuna Ravi, vice president and delivery head, banking and capital markets, Infosys, in a pre-Sibos video interview with gtnews.

In addition, Temenos’ Gilmour picked out a debate centering on the conumdrum that if there had been tighter legislation three years ago, with stress tests, etc, would there have been a financial crisis? “That will be thought-provoking,” she says.

Rebuilding trust

The second big debate will examine how the industry should go about regaining the confidence of its customers, its counterparties and the public at large.

Recovery

There are differing opinions about when and how it will come about but the one thing everyone agrees on is that a recovery is coming. The conference will look at the uncertainty that prevails in the marketplace and discuss where to compete and where to collaborate.

In a video interview with gtnews, Andy Brown, payments expert at ACI Worldwide, looks at the theme of recovery from the perspective of the changing payments industry and how banks can survive in this new environment by implementing an agile payments solution.

The big issue debates have attracted many high calibre speakers such as Om Prakash Bhatt, chairman, State Bank of India; Charles Goodhart, professor, London School of Economics; Anna Edwards, anchor, CNBC; and William Cohan, best-selling author.

Another interesting debate will be the session ‘India and China: How do you choose?’. The two big emerging market power blocks in Asia are moving forward under distinct national strategies. Both have much to offer in securities, treasury, transaction banking and trade. The panel will address how to operate successfully in these markets. But - as pragmatically pointed out by Sri Sundar, head of banking and financial services, TCS North America - there is no need to choose between the two countries, as it is possible - and indeed strategic - to operate in both.

Corporate Forum: Trade and Supply Chain Tops the Agenda

Over 700 corporates are now on SWIFT, according to Marilyn Spearing, chairperson of the SWIFT corporate access group and global head of trade finance and cash management corporates, Deutsche Bank - which is an increase of almost 200 since last year. But, as many continually point out, this is just a drop in the ocean in terms of the number of corporates worldwide.

In the fourth year of the corporate forum - which is rumoured to be the make or break year - the main topics are around trade and supply chain, digital identity, working capital optimisation, electronic invoicing (e-invoicing), risk management, and electronic bank account management (eBAM). It boasts numerous case studies and speakers from the treasury departments of Ipsen Group, Airbus SAS, JT International, Unilever, Bayer AG, Stora Enso, Huawei, AkzoNobel, Procter & Gamble, Alcatel-Lucent, Swiss Re, and General Electric.

In addition, this year is the inaugural gtnews Global Corporate Treasury Awards, sponsored by Bank of America Merrill Lynch, which pay tribute to treasury innovation that has contributed to the success of a corporate's business. The awards will be presented at a gala dinner at Sibos in Amsterdam at the end of the first day of the Corporate Forum on 26 October 2010. Visit the awards website to see the shortlist of high calibre entries.

Hot Topics: Risk, Cloud Computing and Social Media

The big debates will not be the only hot topics at the conference. TCS’ Sundar believes that risk will be significant aspect of discussion at Sibos. “A lot of spend that is happening in the industry is on risk and compliance and there is a huge amount of work to be dome to satisfy regulatory reporting in terms of collecting and analysing the data to ensure compliance,” he says.

Cloud technology is another topic on everyone’s lips. Jean Pierre Arens, director of global payments, Logica, says: “Everyone is talking about cloud - trying to understand what it is and what could it mean for their organisation. This is a hot topic but not because SWIFT has put it on the agenda.”

In a video interview with gtnews, Robin Crewe, chief technology officer (CTO) at Misys, defines cloud computing, and explains how corporate treasuries can benefit from this emerging technology.

In addition, Infosys’ Ravi thinks that social media will be a hot topic and highlights how many banks have taken up social media already, not just for communication among the banks’ employees but also their customers.
Conclusion

If you are attending Sibos for the first time, the advice from ‘old-timers’ is pretty straightforward: prior preparation is key. As TCS’ Sundar explains: “You need to have your objectives well defined before going to Sibos, otherwise you can be overloaded with information. Therefore you need to do your homework ahead of time, or you will end up with a lot of goodies but no real information to work with when you return to your office.”

Sentenial’s Fitzgerald agrees: “It is a great place for meeting all the players, but preparation is important because it is so big you could spend a lot of time wandering around.” He also makes the point that it is a long week and suggests that participants take it easy in the evenings, which is code for restricting the number of parties you attend.

Looking back on the past few years, one could draw the conclusion that Sibos can be a dangerous event to attend. In Vienna, the first day coincided with the disappearance of Lehman Brothers and a global economic crisis. In Hong Kong, Sibos opened during a Level 8 typhoon called Koppu. Therefore, as Amsterdam is 13 feet below sea level, my advice is to bring your water wings.

First published on www.gtnews.com