Microsoft and three major banking organisations – Bank of America, ING and UniCredit – discussed why the financial sector should focus on interoperability and the implementation of cloud and artificial intelligence technologies to overcome challenges in the global payments industry at Sibos 2023.
Panellists included Chris Barry, president of Microsoft Canada; Elvira Kruger, head of transaction services at ING; Massimo Ortino, head of financial institution sales at UniCredit; and Christian Stolcke, managing director at Bank of America. The industry session, titled ‘Embracing global connectivity to unlock the future of finance’ was hosted by Katie-Ann Wilson, manging director of digital monetary institute at Official Monetary and Financial Institutions Forum.
First, the panel considered the challenges of interoperability and agreed that financial institutions need to work together to tackle cross-border payments. “In terms of retail banking, banks have failed on the cross-border payments side,” said Ortino. “But we are now catching up in an area where we should have been leading the change.”
They also highlighted the two current priorities for banks. “First, we need to address some of the commercial models that need to exist so that services can be provided in a way that consumers want to see them,” said Kruger. “Second, there needs to be a certain level of standardisation across the board, such as the ISO 20022 standard that firms are spending millions of dollars to implement.”
Technology will be the enabler of this, according to the panel.
“We are at a pace right now to open a new data centre every three days somewhere in the world to accommodate for the adoption of the cloud,” said Barry. “We work with financial institutions to understand what they need, and a hybrid world is the correct world.”
Barry then explained several use cases for AI in the financial services industry including Microsoft Copilot in Microsoft Teams, which summarises meetings and provides transcripts for participants that have provided their permission.
“The potential implications [for banks] are much broader for AI technology compared to other siloed technology,” said Stolcke, who suggested that there are still several outstanding questions that need to be addressed regarding the adoption of AI-powered capabilities.
Nonetheless, technology will be there to support the sector. “But governments, policymakers and others will play a role in what happens beyond that,” said Barry.
The session also covered the impact of fintechs on banking business models, the rising need to address central banking digital currency (CBDC) and the conflict between inclusivity and interoperability.
In response to what finance will look like in the next two to three years, compared to the next 10 years, Stolcke concluded: “In the short term, there may be more fragmentation between financial services providers but in the long term, I hope we will have solved the fragmentation and the need for CBDCs.”
Technology Record is at Sibos 2023, covering the latest news from Microsoft and its partners. Find out more here.