Concentrating on the now – with an eye towards the future

When it comes to payments, cash management and liquidity, it’s wise to keep one eye on the future and stay up to date with innovations that will lead to better customer experiences.

On Day One, Mark Brant, NatWest’s Chief Payments Officer joined a panel discussing ‘Is the future of money, digital and instant?’. One of the first key messages to emerge was that, while it’s important for corporates to keep developing digital solutions to manage cash, the treasury is such a core part of a bank or other financial institution that it’s also important to concentrate on keeping the status quo secure. Corporates are beginning to realise that instant payments are the way forward for the industry, while keeping pace with necessary regulation and emerging standards.

Mark pointed out the benefits that come from regulation: “In any payments journey there is necessary friction. You need a period of time to make the right checks – so the profile of the payment is key, each has its own size and type needs.

He continued: “I don’t see threats to the search for collaborative solutions here, I see opportunities we can work on to get things right.”

Considering the role of regulation in driving interoperability across the payments ecosystem, Mark said that the user experience is key and the customer should always be at the heart of how things develop: “It’s hard to measure what the user experience is across the globe but regulation is there to make everything is safe and fair”.

A key session on Day Two centred on insight from NatWest’s report ‘Fit for the future: How tech is transforming the banking industry’ published specially for Sibos 2023. The report takes a deep dive into how banks are transforming to wrestle control from fintech disruptors.

NatWest CIO Payments Technology, Ian Povey; spoke to Nick Kerigan, Managing Director, Head of Innovation at Swift about the report.

They agreed that banking is evolving to keep pace with tech firms and is in a good position thanks to the trust placed in banks by customers. However, developing technology and APIs is expensive and time-consuming. As Nick said: “Everybody always has more strategic priorities than they do resources, so it’s always an area of development.”

Ian agreed: “The modernising agenda is always set against strategic outcomes, so we need common understandings. Proposition and journey teams need to work together so everyone is part of the modernising effort.”

One important aspect of that modernisation is NatWest’s implementation of ISO 20022, the new payment messaging standard, aimed at creating richer data for faster and more reliable payments. 

But as Nick Kerigan said: “ISO 20022’s impact is much more profound than just regulatory. Because you can structure data into different sets, it provides richer data and routes to efficiency.” 

Ian agreed, adding: “I see it as data enabling the bank.”

The key session on Day Three at Sibos saw Caroline Haas, NatWest’s Managing Director & Head of Climate & ESG Capital Markets, join fellow delegates from HSBC, IFC (the Impact Finance Centre), BNP Paribas and CIFOR (the Centre for International Forestry Research) to tackle the topic: ‘It’s not easy being green: building standards into green finance’.

The main topic was the role of regulation in both green finance and ESG. This is still a nascent part of the sustainability landscape but regulators are responding to the focus that is being placed upon them. 

Caroline said: “Regulators do want to help, they want to understand what’s needed of them, it’s not a case of them dictating anything. This is a hugely collaborative space, with a significant number of industry groups already working together”. 

Recognition of the different impact on and capabilities of, the ‘global north’ and ‘global south’ is a key aspect in creating workable financial models to deal with carbon sequestration among other solutions. Caroline stressed: “Though we have to be careful to recognise what is feasible, we have a responsibility to help the developing world and give them access to the tools that will help address their needs.”

On the wider question of the efficacy of corporate ESG, Caroline said: “ESG is a collection of key performance indicators (KPI), so when it’s done well, it is additive to a company’s goals and provides long term opportunities. Private equity believes in ESG because it’s good for people and good for business.”

On Day Four of Sibos, Stacey Wilkinson, API Growth Manager was on stage for a session titled ‘Why Digital Identity is key to product innovation in retail and transaction banking’. She was joined on stage by fellow delegates from TD (Toronto-Dominion Bank) and Interac for a lively session helmed by Rob Kotlarz, of One ID.

The discussion began with the panel agreeing that there is a global appetite to grow the life and application of verified credentials across banking and payments – a need underpinned by the threat of fraud. The key to growing the use of digital identities is empowering customers by leveraging the trust that banks have.

Stacey was keen to point out that in the UK, and especially at NatWest, Open Banking is the key unlocking the use of digital verification. 

“Open Banking is an enabler of products of additional products and services, which allows us to meet our customer’s needs, at the point where they want them to be met. We’ve also created a foundational layer that additional products can be built on top of,” she said.

On the topic of digital identities among corporates, Stacey said: “We do see that the benefits to corporates, in terms of the reduction in fraud and the enhancements to customer journeys and experiences, are driving increased conversion of products and services.”

To see how NatWest’s innovation, technological capabilities and ESG propositions might help your business, speak to your usual representative, or read more on this dedicated Sibos hub.