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Shaping the future of finance

Is banking being fundamentally disrupted by technology change? (#Sibos 3)

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Another year, another SIBOS, but this one’s not the same.

Yes, there are all the normal first morning frustrations:

  • Where do I go?
  • What time’s the next shuttle bus?
  • Why the long queue to get in?
  • Do you really have to shove your security buzzer up there?
  • Why is the Wi-Fi so rubbish (2.4GHZ does not work at all!)?
  • Where’s my session?

But you can add one more this year: where’s the agenda?

The overview hard copy agenda for SIBOS has been ditched this year in favour of electronic alternatives – apps, online etc. – and some of us can’t get online due to the Wi-Fi so we have little idea where to go or what to do.

Ah well, wander around like lost sheep.

Not I however, as my scouting days took over and we came prepared.

So the first part of the day is in the innotribe talking about the future of money, as session that went pretty well I thought, with a full room and a good interaction.

This year we talked a lot about the business model of banking and whether it was being fundamentally disrupted or just challenged by the changes of digitisation and technology.

The business modelling tool we used is based upon the Business Model Canvas methodology of
Alex Osterwalder (, and comprises nine pieces of the puzzle:

  • The Value Propositions – the services and products you provide;
  • The Channels – how are you delivering those  services and products;
  • Customer segmentation – who are you trying to service; and
  • Customer relationship management – who provides the service and how

These four factors are underpinned by the revenue model of the bank, the fifth and most fundamental foundation of the model.

There are then three factors that comprise the other foundation: costs:

  • The resources required to create the products and services  - capital, labour, etc;
  • The activities required to create the products and services – workflows and processes; and
  • The partnerships required to deliver those products and services.

That’s a pretty complicated idea to get across in a short session, but we managed to do it through a great selection of panellists, starting with Scott Bales, Chief Mobile Officer of Moven.


Scott maintained that banks had lost touch with customers as customer relationships became digitised, and that the remote, digital customer is very different to the customer of the past.

At the end of the dialogue, we asked the audience if the customer relationship was being revolutionised by digitisation or whether this is just an evolution of the banks outreach.

About two-thirds of the audience voted that the customer relationship is being revolutionised by technology.

We then moved on to the core value proposition: moving money; and were lucky enough to be joined by Gottfried Leibbrundt, CEO of SWIFT and Patrick Murck, General Counsel with the Bitcoin Foundation.

Most of the audience were aware of Bitcoin and that it is digital value exchange, rather than a pure virtual currency, and Gottfried and Patrick put forward the idea that banks should possibly offer stored value for Bitcoins, in the same way that they store gold, commodities and other tradable

This is the view of the German government, who have just legislated that Bitcoin is seen as a tradable store of value, and may illuminated the future of how we exchange many capabilities, both commercial and community based.

However, the Bitcoin community is small right now – about $1 billion of value – which, as Gottfried pointed out, is the sort of amounts that SWIFT move in seconds.

The vote here said that digital currencies is purely an evolution of money transfer, as banks have known for decades that stores of value can be exchanged as bits, and bytes, of value.

No big deal?

Well, what about the back end infrastructures?

Are they being disrupted by change?

Our next speakers Dan Marovitz, Founder & CEO of Buzzumi, and Hank Uberoi, CEO of Earthport, thought so.

They put forward the notion that as we built big infrastructures, they become harder to change because the larger the backbone, the more complex it is to adapt.  Hence, many new players
are nibbling away at that infrastructure from Amazon and Apple to niche players like Earthport and the Currency Cloud.

After all, if you have a complex backbone, you cannot break it but you can place steel pins to work around the core infrastructure, and that’s what these new nimble players are doing.

Another facet to this piece is that the backbone is the core of why we offer customers the services we do, in the way and format that we do it.  We may not want to offer corporates cash management, trade finance and treasury services in the constraints that operate in this space, but we have to due to the way we built that backbone in the past.

Is it time for revolution of the core, or evolution to allow the steel pins to provide the workarounds?

This one was a 50:50 audience vote, with no strong view on revolutionising the core infrastructure or just evolving it.


Nevertheless, that’s a view that needs granularity as we need to ask which infrastructure needs to evolve.  SWIFT and VISA may be keeping up, but what about Chips, Fedwire, TARGET2, SEPA, national systems and others?  This is a subject we are currently exploring in our annual payments infrastructures: are they fit for purpose? survey (have you joined in yet?  Get a free copy of
the survey results if you participate).  

Anyways, we moved finally into a dialogue with Dave Gray about the connected company, coincidentally the title of Dave’s book.

The discussion is around organising the bank for the future model of operation, and that the old organisation built in pyramid shape around the division of labour has done just that: divided the organisation so it cannot adapt.

If businesses are to keep up, they need to be fast moving and that implies lots of small teams all working to a common purpose – as Google does – rather than a large hierarchy where every small change has to be sent to the boss for authorisation.

How can anything fast happen if the layers of hierarchy are there to filter it out?

We finished by asking everyone whether, from all they had heard, is the fundamentally cost-revenue structure of banking and its business model failing?

Do we need a revolution of the model, or can we simply adapt to survive?

Although the audience voted 60:40 in favour of revolution, I personally expect the industry to evolve and keep up.


Because we have a model protected by compliance, audit and regulation to ensure our capital controls are held high enough to be stable and resilient.

Does Bitcoin, Moven and the others challenging the banks have this control and resilience?

We will wait and see … or at least that’s what the banks think.

Ah well, off to find a Wi-Fi hotspot that works now (there aren’t many) and then network a little before this afternoon’s plenary session.

Talk later!



Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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