The fourth and final day of Sibos 2013 focused on the growing Africa and Middle-East region with a whole day devoted to the banking, trading and technology opportunities in the area, writes Neil Ainger. The winners of the Innotribe Challenge were also announced overnight and the technology companies on the exhibition floor share their vox pop thoughts on the show in Dubai, UAE. [Click here for Day 1 report; Day 2 & Day 3]
As you enter Sibos 2013 in Dubai, UAE, the first stand you see is the ICBC stand. Now admittedly this may be because of last year’s absence of the Chinese banks for political reasons but it is surely not just to make up for last year; the growing influence of China’s economy and banks has been an on-going theme at Sibos for more than a decade. Other regions and emerging markets are now offering the early stage opportunities that China used to offer, which is no doubt why SWIFT dedicated the fourth and final day of Sibos to Africa and the Middle-East – the fact that Dubai, UAE, sits slap bang in the middle of the Gulf Cooperation Council (GCC) region also helps explain the dedicated conference stream.
Abdul Aziz Al Ghurair, chief executive officer (CEO) of the local Mashreq Bank and Chairman of the UAE Banking Federation and of the Dubai International Financial Centre (DIFC) Authority's Board of Directors, introduced the Africa and the Middle-East day at Sibos 2013 by outlining the social, economic and technological trends affecting the region, and detailing the opportunities and challenges for financial services providers.
“The GCC put together is the 12th largest economy in the world, with a gross domestic product (GDP) of $1.56 trillion, and by 2020 this is predicted to grow to $2trn,” said Aziz Al Ghurair, before outlining the development of the region’s infrastructure and non-oil related industries such as financial services, technology and services.
He also claimed that the GCC remained “largely unharmed” by the 2008 liquidity crisis, although at least in the case of Dubai the bursting of the property bubble there led to a bailout of the Emirate by its neighbour and the United Arab Emirates capital, Abu Dhabi - not to mention the renaming of the world’s tallest building from the ‘tower of Dubai’ to the Burj Khalifa, after the ruler there rode to the rescue.
The Sibos 2013-hosting Emirate of Dubai has, however, recovered quickly since those days. As Aziz Al Ghurair pointed out the UAE’s banking system across all the Emirates' is now the biggest in the Arab world with an 18% capital ratio base common to the banks here. “Almost half of the 51 banks in the UAE are also foreign owned,” he added, while promoting the openness of the state and indeed the wider Middle-East and expanding African region to the audience.
There are certainly many banking dollars available to spend at the region’s banks and often a lack of legacy concerns to inhibit innovative technological rollouts in the mobile banking, trading, and other FS arenas.
Africa and Trading Opportunities
The links between the Middle-East and Africa were explored in the next session of the dedicated Sibos conference stream entitled ‘Growing Trade Corridors’, which examined the remittances, payments trade, finance and other links between the areas and Asia. Mohamed Al Ansari, Chairman and Managing Director of the Al Ansari Exchange, and H.E. Hamad Buamim, President and CEO of the Dubai Chamber of Commerce and Industry, both outlined the opportunities available to the technology companies, banks and other exhibitors at the Sibos 2013 show, while Rassem Zok, CEO for the Middle East and North Africa at Standard Bank and Millison Narh, Deputy Governor of the Bank of Ghana, laid out the opportunities in Africa with the latter country growing 8% per annum over the last five years, spurred on by the discovery of oil there.
The role of securities market infrastructures in attracting foreign investment to the growing African market was addressed next with Tim Masela, Head of the Payment System Department at the South African Reserve Bank, explaining how “work is underway in the country to integrate its payments, clearing and settlement systems”.
Sunil Benimadhu, CEO of the Stock Exchange of Mauritius and President of the African Stock Exchange Association, then went on to explain how his own domestic exchange in Mauritius is moving away from a traditional equity-centric nationally-focused exchange after investing in a new multicurrency trading platform and other infrastructure improvements to attract foreign capital.
“Custody costs more in Africa,” said Cyrille Nkontchou, a Partner and CIO at Enko Capital, who raised a number of the problems still afflicting African financial markets. “There are not that many global custody players in Africa so we’re reliant on local custodians and the lack of competition add to the cost. Maybe this is something the African Stock Exchange Association can look at.”
Innotribe Technology Winners
The winners of the Innotribe Startup Challenge and the Innovator Challenge - respectively, Klick Ex and Waratek - were revealed overnight proving a handy motivator for attendees arriving at the fourth and final day of Sibos 2013 to discuss if there is a disintermediation or a technology threat they should be aware of. The Innotribe awards seek to recognise and fund innovative business-ready financial technology (fintech) ideas and provide seed money for early stage development.
Klick Ex is a peer-to-peer (P2P) currency exchange based out of New Zealand that is seeking to disrupt the market by utilising web-based technologies.
Waratek is based in Dublin in Ireland and is a Java virtualisation innovator that is seeking to bring the infrastructure efficiencies and flexibility of the virtualised world to as many people as possible. For the full story and other bobsguide news from the exhibition floor of Sibos 2013, such as the development of Myanmar's stock exchange, Barclays' expanded Pingit mobile app product range, and the Eurosystem's cancellation of the CCBM repatriation requirements under the correspondent central banking model (CCBM) next year, please click on the highlighted section. Full news from the show can be seen here.
Vox Pop: Euroclear, BAML - Views From Sibos Exhibition & Concluding Trends
As the final day of Sibos 2013 dawned the thoughts of the 7,500 attendees naturally turned to the technology and business trends that were evident this year in Dubai, UAE, with mobile banking once again much discussed and its spread into commercial banking and other sectors of the industry prevalent.
For Bill Pappas, CIO at Bank of Amerrica Merrill Lynch (BAML), the cloud was another key technology trend at Sibos 2013, and one he addressed during his prsentation to the opening Technology Forum. "You need to stay ahead in developing the knowledge and skillset of your technology employees," he added while reviewing some of the important tech trends evident at Sibos 2013 with bobsguide. This issue of staff training, technology and management / communication skills was also addressed as part of the Tech Forum at Sibos.
"The T2S presentations at Sibos have underscored the need for Central Securities Depositories (CSDs) to offer highly flexible and agile service portfolios because there is more than one way to benefit from T2S," commented Joel Merere, Executive Director at Euroclear, as he also reviewed the hot topics of Sibos 2013 for bobsguide. T2S was certainly front and centre here.
The huge changes which are imminent when migration towards the TARGET2Securities (T2S) single euro securities settlement engine in Europe begins in 2015 were addressed in the bobsguide Day 2 show report. It has certainly been a key discussion topic at Sibos 2013, alongside the need for banks to collaborate with each other and perhaps with technology partners to ward off the threat of disintermediation or to cut operational costs in order to meet the “tsunami of regulations” that Gottfried Leibbrandt, SWIFT’s CEO referred to in his opening plenary speech [see the bobsguide Day 1 report here]. The SWIFT Know Your Customer (KYC) platform is just one example of this collaborative trend towards adopting shared services across the industry to cut costs in non-proprietary systems, although whether everyone on the exhibition floor is happy about SWIFT moving into another potentially conflicting field has to be up for debate.
Tech Companies Share Their Thoughts: Misys, SmartStream, TCS, ACI, CGI
Tim Brew, a partner and director of financial services at CGI, identified the growing prevalence of real-time payments platforms and the opportunities this opens up in other areas, such as reconciliation, mobile banking and so forth, as a key theme of Sibos 2013. “I’ve had a lot of meetings with member banks and payment infrastructure providers at the show and the consensus is clear that it is not about float, but rather about the data that these new systems make available, and the opportunities this opens,” he said, while speaking to bobsguide on the show floor.
Dr Darryl Twiggs, executive vice president of product management at SmartStream, explained that “the majority of my meetings and discussions this year have been around intra-day liquidity and how to deliver strategic solutions for Basel III compliance ahead of 1 January 2015.”
According to Sambamurthy Subramanian, head of banking at Tata Consultancy Services (TCS), the collaborative trend at Sibos was marked this year, but for him it was more about treasury collaboration with banks and how best to improve straight through processing (STP) efficiency.
For Paul Thomalla, general manager for Europe, Middle-East and Africa (EMEA) at ACI, the location of Sibos 2013 in Dubai, UAE, was important as it reflected the trend for emerging markets to dominate trade discussions, and indeed technology contract awards. “I’ve been covering the region for many years and we’re now seeing a lot of innovation in payments and banking generally in the GCC,” he said. “They’ve also not got 70 years of merger and acquisition (M&A) or other technical legacy issues to overcome.”
For Wisam Mahmood, global solutions director for transaction banking at Misys, Sibos 2013 has been a great success. “Banks are finally moving towards making the transaction banking business a cost effective enterprise and looking at cross-border standardisation via initiatives like the single euro payments area (SEPA) and the adoption of common ISO 20022 messaging. The Gulf region is also moving towards adopting ISO 20022 in common with other regions. I find this encouraging, and supportive of the wider collaboration theme at Sibos 2013.”
Collaborate to innovate never used to be the mantra of the iconoclast inventers of the past, but it seems that at Sibos it is the approach that is increasingly being adopted, whether that is in the Innotribe relying on crowd-sourced models, or at banks cooperating to reduce technology and operational costs in order to be able to afford to operate in the increasingly stringent FS regulatory environment. That last theme of regulatory burden could perhaps be taken as the over-arching theme for Sibos 2013. It remains to be seen if collaborating will lighten the load.
Vox Pop: Broadridge, SocGen, BIAN
Continuing with the wrap-up thoughts from the exhibition floor at Sibos 2013, Patricia Rosch, president of investor communication solutions (ICS) International at Broadridge, commented that: “Regulation [a key theme this year in Dubai of course] and regulations in general heighten firms’ need to benefit from a mutualised cost model. By collaborating firms can take advantage of economies-of-scale, enabling regulation to be turned to your advantage.”
For Christian Behaghel, head of global transaction banking at Societe Generale (SocGen), the topic of collaboration and the need to comply were both issues that constantly cropped up for him during his Sibos 2013 meetings and his discussions with peers. “Intra-day liquidity between banks and how to track and report it, and to invoice clients was also an issue.”
According to Hans Tesselaar, executive director of the Banking Industry Architecture Network (BIAN), a not-for-profit organisation that consists of technology vendors like IBM and SAP, and banks such as UBS, and pushes for common standards to be developed among its members to support flexible service orientated architectures (SOAs), Sibos 2013 was the perfect show for him. “All the discussion of collaboration plays into our mission,” he said, before departing the Microsoft stand at the Dubai World Trade Centre venue in readiness for the closing Sibos party that evening on the fourth and final day. Thousands of other attendees joined him in heading for the exits in order to go back to their hotels and change into their Sibos party clothes at the end of the first ever Gulf region Sibos.
• The Bobsguide daily show reports from Sibos 2013 in Dubai, UAE, 16-19 September, can be seen here – Day 1: Technology revolution or evolution; Day 2: Market Infrastructure Change and Corporate Forum; Day 3: Compliance Forum channels frustration at regulatory overload; Day 4: Africa and Middle-East focus, vox pops and tech winners. All preview material, subsequent interviews, blogs and opinions surrounding the show and other general technology trends can be seen via the bobsguide blog section here, while the new bobsguide bloggers (aka contributing editors) section is here.