Microsoft at Sibos: Payments – process improvements or game changers?
At Sibos, Microsoft will demonstrate how it is empowering the industry to drive digital transformation with the financial services ready cloud. Microsoft CEO Satya Nadella will deliver the closing keynote on October 19, and we have an extensive suite of events planned and opportunities to meet Microsoft executives during the show.
Driving Product Innovation
There have been many changes in the payments industry over the years which seemed big at the time, but on reflection were merely ‘process improvements’ in the guise of gear-gnashing transformation. As volumes grew – and new technology hit the scene – banks got organized around SWIFT standards and automated processing. Though in reality this turned out to be more of a process improvement – a profound and necessary one – but, in fact, the basics of the payments industry were no different.
Fast forward through a litany of new dawns in banking technology including electronic banking, the fax machine (!), the internet, the ubiquity of mobile phones, and so on – and each time the press heralded a ‘once in a generation’ game changer. They certainly seemed so at the time, but one quickly realizes that it is actually the baseline of innovation that is the thing that is always changing.
Banks adapted to this shifting landscape with numerous process improvements but without fundamentally changing their model or culture. Mobility, in particular, has the hallmarks of being a game-changer. But was this a true industry transformation? Perhaps. Certainly, the reach, scale and appeal to millennials means that mobility has re-shaped the payments industry by shifting control to device-toting users. At first banks feared this new environment in which customer experience, not a traditional hallmark of big old banks, would shift outside of the traditional banking value chain. Banks felt they would be left with only the drudgery of mechanical processing, settlement and attendant regulatory burdens.
So what, then, is transformational change?
The deeper determinant of an inflection point is when the fundamental business model changes in conjunction with the technology that supports it. In the payments industry this means a realignment of activities around customer centricity, and the redefinition of a bank’s role as intermediary in serving their needs in an open and interconnected world (the ‘API economy’).
It requires deeper cultural mindset changes to take advantage of new business drivers in recognition that the level playing field of yore, which featured only bank-to-bank competition, is now coming to be dominated by new entrants who are ‘born in the cloud’ without the shackles of legacy design and the economics that support it. In this new reality, insights, simplicity and anticipation of client needs frame both customer expectations and how they wish to be served.
As we shared in earlier blogs, at Sibos Microsoft will demonstrate how it is empowering financial institutions to drive digital transformation with solutions to reimagine the customer experience, empower employees with a secure and productive digital workplace, optimize operations through improved risk insight and regulatory compliance, and transform products with agile and interconnected business models and real-time predictive digital processes. We have an extensive suite of events planned and opportunities to meet Microsoft executives during the show.
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