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Sibos Reflections

by Helen Sanders, Editor

Gold at the end of the rainbow?

The last two Sibos conferences have suffered turmoil of different sorts: 2008 saw the collapse of Lehman Brothers on day one, this year saw a typhoon. Somehow, despite climactic events of all sorts, the event seems to go on regardless. This year, like most international conferences, Sibos saw lower numbers of delegates than usual, but the sessions were of a consistently high quality with good interaction amongst participants in panel discussions. Indeed, although Sibos is largely a ‘single issue’ event from a corporate treasurer’s point of view, namely exploring SWIFT Corporate Access, there were some excellent panel discussions which addressed issues of more generic appeal. Consequently, we will be sharing comprehensive content from the event, together with presentations from the BNP Paribas’ Cash Management University, in the next two editions of TMI.

Last year, with everyone distracted by rapidly unfolding market events, the messages and key themes of Sibos were rather swamped. This year, just as the rainbow that appeared as the typhoon passed was particularly striking, there seemed to be a universal perception that the financial crisis is also coming to an end. As David Blair, now VP Treasury at Huawei warned, however, “Recovery will not be V-shaped” and companies will still be under pressure to cut costs as well as grow revenues.

Collaboration and compliance

It has been widely believed that the banking market would need to, and be forced to go through radical reform to avoid a repeat of the crisis. While these discussions are still ongoing, the impression at Sibos was that little has changed in reality, except that the regulatory burden continues to grow. This in itself is important. A few years ago at Sibos, I remember a panel discussion in which one participant (from  a very large bank) suggested that to mitigate the ever-increasing cost of compliance, collaboration between banks would reduce the overall cost burden without compromising each bank’s differentiation. At the time, this suggestion was received mutely by some and negatively by others, who responded rather archly that this was simply a cost of doing business and would prove a catalyst for the survival of some banks and not others. Today, the situation is very different. Every bank has more cost pressure than at any time. Increasingly, banks of all sizes have recognised that while there are some investments that are critical to maintaining a bank’s competitive position and delivering value to customers, there are others, such as the cost of compliance and establishing infrastructure in new regions, that are currently replicated by every bank, adding no competitive advantage or benefit to customers. Given the choice between the two, clearly a bank will invest in value-added services that generate revenue, so it makes sense to collaborate more closely.