Guest blogger, Bob McDowall, research director, TowerGroup, asks have banks, technology and service vendors attending Sibos 2008 in Vienna, and even SWIFT itself, heeded the significance of events in the last 12 months in global credit markets?
From a business perspective Sibos 2008 will be a more sober affair than 2007, when the conventional view was that the credit crunch was a brief, albeit disruptive, episode in the life of the global financial system.
The challenge for all exhibitors, technology vendors, service providers and financial institutions, is how to contribute effectively to re-engendering trust and confidence in the financial institutions and global financial system while benefiting their clients and themselves.
The challenge should not be underestimated. In the western hemisphere, financial institutions individually and collectively have suffered a downturn in revenues. The liquidity famine in the wake of the credit crunch has led to disenchantment by investors and their loss of trust and confidence in financial institutions and the financial system.
Financial institutions have experienced reduction in revenues. Expectations and timing of growth are at best uncertain. In other geographic regions, financial institutions have not been as badly affected to date, but they anticipate lower growth and more modest increase in earnings.
Demonstrable, improved risk management will contribute to restoration of trust and confidence. Financial institutions have to implement permanent improvements in their risk management systems. Regulators have to make improvements in two of their roles; oversight of conduct of risk management by financial institutions and oversight of risk management in market clearing and settlement systems.
The central challenge to SWIFT, its membership, technology vendors, and service providers is delivering meaningful services that will contribute to these objectives.
SWIFT conveys transactions and data that support confirmation and settlement of transactions in banking and securities markets globally.
SWIFT’s financial institutional members, in concert with technology and services providers, deliver the information on which informed risk management decisions can be taken. They formulate, implement and control the timeliness, form efficiency, and cost of delivery of that information.
Sibos 2008 provides the premier venue for exhibitors to showcase their own competitive contributions to improved services to support quantitative and qualitative risk management by financial institutions and financial regulators.
Technology and service providers that fail to encapsulate the underlying message of restoration of trust and confidence in financial institutions and the global financial systems in their offerings signify that they have not appreciated the significance of the changes and the events of the past year.
Investors' and customers' confidence in financial institutions and global financial markets and systems has diminished. It has to be restored before financial institutions can restore their own fortunes. Successful exhibitors will embed the importance of restoration of trust and confidence in financial institutions and the global financial systems in their technology and service offerings.
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