Monday, October 09, 2006

Turf wars

With the theme tune of Peter Allen's 'I still call Australia home' bursting out of the loudspeakers in the plenary hall, replete with a live performance by the Sydney Girl's Choir, I thought I had walked into the wrong room at the opening plenary of the Sibos conference in Sydney.

I expected the Solid Gold dancers to materialise at any minute, but they didn't. It reminded me of an opening session at an NCR conference many moons ago in Disney World Florida, where delegates clapped and sang along to some 80s nostalgic hit complete with svelte dancers.

But that was NCR, a commercial organisation and this is SWIFT, a not for profit co-operative. The sense of deja vu continued throughout the plenary as I heard the key speaker, David Morgan, CEO of Westpac Bank in Australia, take banks to task for not doing enough to stifle competition from non-bank providers in the payments space.

"Non-traditional payment providers are ahead of the curve and are on our turf," Morgan asserted. "Tesco Financial Services and General Electric Consumer Finance are making money we should be making, which does not fill me with sensations of peace." He went on to say that he had the same less than charitable feelings towards online payment providers such as PayPal.

In order to compete with the more nimble non-bank payment providers, Morgan said banks needed to not only be more competitive but co-operate through industry utilities and competitive pricing. I had heard it all before. Isn't this what banks tell themselves at every Sibos? At Sibos in Atlanta, Heidi Miller of JPMorgan Chase took the industry to task for not being the first to develop online payment solutions like those pioneered by PayPal. When are banks going to stop talking and debating and start acting? I am sure they will be beating themselves up about how much payments revenue they have lost to alternative providers at the next Sibos.

As SWIFT's new chairman Yawar Shah took to the stage, some delegates left the auditorium. They were probably thinking like I was that they had heard all the rhetoric before, or maybe they were just eager to get to the welcome cocktails. Shah spoke about challenges the industry faced over the next 10 years and the standard rhetoric about price reductions for SWIFT members and SWIFT's 2010 growth strategy.

Taking up the 2010 growth strategy theme, SWIFT CEO Leonard Schrank said it was the most "profound" of SWIFT's visions (SWIFT has had many visions including its 2006 one about making SWIFT the lowest cost and lowest risk chief global financial messaging provider). But given the challenges SWIFT still faces around the cost of using its network and privacy issues, has it even delivered on its 2006 vision before it sets its sights on 2010?

Once again its 2010 vision is about SWIFT being all things to all people; not only will they solve the reference data issue, but hey guess what, they will also solve the complexities around automating derivatives and the corporate supply chain. That's it everything's solved, we can all go home.

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