• ISO 20022 preparedness: with deadlines fast approaching in the UK and elsewhere, are banks and their customers ready to take full advantage of all that the new standard has to offer?
• Open Banking: how to leverage the next wave of services.
• Environmental social and governance (ESG): how banks can use distributed ledger technology and data to help better manage environmental, social, and governance risk.
• Trade transformation: adding more value when it comes to trade finance.
• Central bank digital currencies (CBDCs): how should banks and their customers get ready for the future of money?

Thousands of business leaders, decision makers and experts from across the financial ecosystem gathered in Amsterdam to debate major industry topics including the digital landscape, succeeding in uncertain times, and driving sustainability initiatives forward.

Here’s our take on the big themes to emerge from Sibos 2022.

As the UK payments industry moves to ISO 20022, the emerging global standard for payments messaging, studies have shown firms with advanced data management capabilities are around five times more likely to make decisions more quickly than their peers.

Banks are already migrating to ISO 20022 as the standard for high-value payments systems, and better data in payments stands to deliver long-term benefits.

ISO 20022 offers efficiencies resulting from increased straight-through processing, fewer rejections, fewer exceptions and better reconciliations and risk management. Ultimately, it could lead to reduced costs for corporates that adopt it. What’s more, it will enable firms to enrich how they interact with their data, which should:

• Make it easier for businesses to detect fraud and help target financial crime
• Enable more detailed and better structured reference information
• Improve analytics and decision-making

To adapt to the new messaging standard and accompanying data requirements, your organisation might have to make process and technology changes. You can find more guidance on this here.

As regulators push payments providers (and increasingly network operators) for more openness, we believe the best route is through Open Banking services.

Realising the benefits – better security, speed, efficiency, reporting and compliance – means ensuring payment partners invest in open infrastructure that complies with the latest standards and frameworks including ISO 20022 (see above) and regulatory technical standards (RTS), and aligns to new central infrastructure requirements, which are transforming the payments landscape globally.

With Open Banking, financial institutions could meet the new demands of customers and update their own processes to be more agile and future fit.

Climate change is a complex challenge. As organisations respond to demands from stakeholders as well as authorities for better environmental, social and governance (ESG) reporting, there might be real benefits in standardising reporting.

Could distributed ledger technology (DLT) be part of a solution to transform ESG reporting? This can be a challenge in the best of times, not least when minimum data disclosure requirements differ widely across regions.

Emerging trade information networks and platforms that facilitate the flow of information, including ESG data, across entire networks of suppliers, buyers, and financiers could transform our ability to cut greenhouse gases (GHG) in our supply chains.

They create opportunities for banks and other financial services firms to structure financial products that reward openness on ESG with better access to capital at more favourable terms for buyers and suppliers.

If payments are the lifeblood of the economy, global trade constitutes the arteries – and it faces pressures from regulators, businesses, and consumers.

Take bills of lading, for example – an integral part of trade documentation. Their electronic equivalents, electronic bills of lading (E/BLs), have been around for nearly a decade and bring potential benefits including greater efficiency, reduced costs and better traceability of goods. E/BLs can lead to less human error, require fewer people and more streamlined processes to manage them – all of which are measurable.

The challenge, however, is coexisting in a hybrid environment where some rely on digital trade finance platforms, others on phones and paper slips.

With the world digitising, all trade participants need to adapt their mindset. Paper processes are deeply embedded for many. As we await legal reform in the UK, everyone – banks and businesses – need to do their homework so they’re ready for the new trade environment.

The need for interoperability across the traditional and digital financial landscape is rarely more evident than with Central Bank Digital Currencies (CBDCs), digital currency issued by a central bank alongside cash and bank deposits.

The digital future will likely include digital currencies, which will play a significant role in driving digital asset adoption. A handful of CBDCs are already live and close to 100 central banks are currently exploring the possibility of introducing one, according to the International Monetary Fund. Here, the challenge isn’t just integration; it’s helping businesses understand that CBDCs are actually quite distinct from traditional currencies and ‘crypto’.

Perhaps one of the most prevalent themes woven throughout all the sessions and meetings at Sibos, and one relevant here, was importance of purpose in a more uncertain (economically, politically, environmentally) world.

Innovation is important, but it shouldn’t just be for innovations’ sake. The CBDC use case and business drivers for the financial services industry need to be clear. A well-designed CBDC could have the potential to enhance financial stability and inclusion, support a resilient payment infrastructure, and enable financial authorities to better understand aggregate behaviour. But it remains to be seen whether the future of money lies in CBDCs, or non-CBDCs that deliver similar benefits; in either case, banks and businesses should be prepared.

For more information about Open Banking, trade digitalisation, getting ready for ISO 20022 and more, check out our NatWest @ Sibos 2022 hub or get in touch with your NatWest Corporates & Institutions representative.