“I don't know how many kilometres I walked on the first day,” BPAY Chief Executive John Banfield says. “The exhibitors were on two floors, which were huge, and the amount of effort and expense that people had gone to was unbelievable.”
More than 8200 delegates from financial institutions, technology companies, and government attended this year’s conference in Singapore to discuss payments, trade, cash management, and securities.
Two topics dominated conversation: real-time payments and blockchain technology.
Australia is one of about 12 countries planning its own real-time payments system – the New Payments Platform (NPP) – and its separation of underlying infrastructure from innovative overlay services attracted plenty of attention.
“The crowd showed real interest in hearing about the differing solution that Australia has come up with and they leveraged from what the UK and Singapore has done. The NPP is transformational and will set the way forward in terms of how real-time payments and overlay services operate,” Banfield says.
Just two weeks after the Sibos
conference ended, the NPP announced that BPAY (the publisher of Banter) would build the Initial Convenience Service
(ICS), which will allow consumers to immediately transfer bank funds via their mobile phone, tablet, or the internet from 2017.
It is understood that the flexibility of the NPP to run such overlay services will make it unique among the 18 countries already running real-time payment systems, which have embedded services within their infrastructure.
“It gives you leverage for futuristic overlay services that haven't even been thought of yet,” Banfield says.
Sibos also proved an opportunity for BPAY to hold discussions with other real-time payment providers such as BCS Singapore and the National Payments Corporation of India (NPCI), which is in the early stages of building its own real-time payments system.
“They are certainly interested in what BPAY and others are looking to run on top of the NPP and whether those services could also be rolled out internationally on to other existing or future real-time platforms,” said BPAY’s General Manager product, scheme and business development, Keith Brown, who also travelled to the conference.
While crypto-currency Bitcoin remains on the outskirts of mainstream financial services the technology which underpins it – blockchain – has quickly taken centre stage.
Bockchain’s decentralized model relies on a single distributed ledger which allows monetary value to be transmitted directly between users. It dispenses with the need for a trusted central counterparty and raises questions about the role of banks and other established financial services companies.
“A lot of the panelist discussions specifically brewing between banks and blockchain specialists were about determining what the future may look like,” Banfield says, pointing to the lack of a commercially-viable model just yet.
Brown says many issues remain about digital identity and how to build trust across a global network using blockchain technology. “It's about more than payments – it’s about transactions that occur between parties that can be trusted and done in real-time. There's clearly an opportunity there. I don’t think anyone has necessarily landed on exactly what the problem to be solved is yet but it's not far away.”
A rising number of banks, including the Commonwealth Bank of Australia and National Australia Bank, are developing a framework for using blockchain technology in markets via the R3 distributed ledger initiative.
More innovation and challenges
Brown says the challenge posed by mobile payments was also a major focus for many of the global banks at SIBOS.
“How they fight back against the disruptors in the market with Apple Pay now getting broad entry, PayPal’s brand getting stronger, and Android Pay – and keep their brand at the forefront of payments is something that has had a lot of noise around it.”
Digital wallets form just one part of a broader challenge for major financial services players as new fintech threatens to disrupt their successful businesses. It is a challenge which BPAY – itself owned by the major banks – is acutely aware of as it prepares to build the ICS.
“It takes us out of our traditional bill payment world into a new innovation at the forefront of payments again, as we were 18 years ago,” Brown says.
But innovation is something which has to permeate an entire organisation and Banfield notes that a number of employees recently took part in Citi’s hackathon.
“We're actually going to run a hackathon internally to see if we can generate a few ideas. But it's just amazing the way things are changing.”
This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY.
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