Q: Since Sibos was last in Singapore in 2003, what has changed in Asia?
A: One is [the] economic growth in the region, and we see that reflected in investment in infrastructures. They are building their plumbing. We have seen real-time gross settlement systems [RTGS] pop up, we have the Hong Kong RTGS [operated by] the [Hong Kong Monetary Authority] in four currencies.
So there has been a lot of focus on newer infrastructures and general economic growth. For Swift, you see that reflected in our volumes in the area and also in our investment. We have opened up offices, we have done initiatives there, we have the Go Local India venture to help connect the Indian RTGS to Swift.
Q: Will the slowdown in China affect the growth of the renminbi as a payments currency?
A: The renminbi is still a small percentage [of total payments] given the size of the underlying economy. So I think [China is] still playing catch up to get to the same level as some of the European currencies in relation to the economy. Maybe some of the steep growth will slow down a little bit with the economic slowdown.
But the real drive will be China’s reform measures – what the country is doing to foster convertibility, open up capital markets, etc. If those reforms continue, I think you will see a continued rise in the use of the renminbi.
Q: Africa is also playing catch up in terms of payment volumes and we have seen huge increases.
A: The other interesting thing in Africa is the building of new transnational infrastructures. There are at least three, including the West African Monetary Zone, the Southern African Development Community and the East African Payment System. So there are three large regional initiatives to integrate markets and there is lots of experimentation with new payment systems, such as [Kenya’s] M-Pesa, on the retail side. There are also new RTGSs – two years ago, we welcomed the Nigerian RTGS onto Swift.
Q: Sibos is always big on technology and innovation. Many are saying while there is a lot of noise around Bitcoin, it is actually its blockchain technology that has the big applications. Is that correct?
A: I would not belittle Bitcoin too much. Will it be a global currency like the US dollar? Probably not. I urge everybody to download a Bitcoin and play with it. I did it myself a few years back and I found the experience really interesting. On your iPhone, you can send money to anybody, anywhere in the world, which is a very interesting way of doing it. So [it is worthwhile] for everybody to go through the consumer experience.
On the blockchain itself, we see huge investment going into it right now. There will be challenges to solve, such as how we can scale it up to deal with higher transaction numbers than originally planned, as well as the mining cost.
Q: We see huge developments in real-time payments but also banks experiencing problems with their payment systems. Should we fix the basic infrastructure before we move to faster payments?
A: You have to do both at the same time. I would also argue that it is only when the electricity fails that you realise how reliable electricity has become and how dependent you have become on electricity.
I think part of the publicity around the outages may also be that people now have real-time access to their balance account on their mobile. They are used to being able to wire the money in faster payments immediately. So yes, if there is a one-day failure, maybe a few years ago you wouldn't have noticed, but now that you have come to rely on these faster payments, you start noticing these outages more.
I think banks will have to do both at the same time – fix the legacy systems and make sure that these outages don't happen – while continuing to innovate.
Q: Please tell us about the Swift 2020 strategy.
A: The Swift 2020 strategy involves three key pillars: growing and strengthening the core messaging services for payments and securities; expanding and deepening our market infrastructures offering; and building our financial crime compliance portfolio.
For our core, this means increasing our technology investments, reducing time to market and making our platform even more secure, reliable and scalable for the future. We will also focus on adding new capabilities to our platform, both in terms of connectivity and extending the breadth of services.
On market infrastructures and our real-time payment ambitions, we will drive adoption of our messaging services among RTGSs and central securities depositories, and build our portfolio of resilience services. We will maintain a strong focus on the ISO 20022 [international standard], which cuts across all three business areas.
Financial crime compliance will continue to play a central role in our shared services portfolio together with SwiftRef [our reference data utility], and our business intelligence offering.