How organisations can overcome challenges and modernise their business models to succeed in uncertain times is a key theme of this year’s Sibos.</em></p> It has been impossible not to notice an increase in regulatory, cybersecurity and geopolitical risk factors in 2022. Recent geopolitical developments have forced financial services companies to rethink their cybersecurity measures and business continuity plans and ask themselves whether they need to review their crisis scenarios and cyber defences, and whether any areas of weakness have been exposed.</p> Various reports have suggested that geopolitical risk is at its highest level since before the global financial crisis. In the first industry session of the risk and trust stream, participants from BNP Paribas, Wells Fargo, Deutsche Bank and Mambu will consider how companies can assess their preparedness for current and potential future events.</p> A day two session will then look at what organisations can do to future-proof business service operations while managing global technology and cloud service providers under different jurisdictions and regulatory regimes.</p> “As digitisation and geopolitical impacts expand, I believe we will see an even more pronounced acceleration in how the financial services industry is fuelling resiliency through regulations and the cyber talent agenda,” says Tami Hudson, EVP & cybersecurity client officer, Wells Fargo.</p> Prior to this, a ‘Meet the experts’ session will explore some of the key issues around digitising trade.</p> Digital trade</strong></p> Trade digitisation is high on the agenda of trade associations and policy makers across the world. Earlier this year an electronic trade documents bill was included in the UK government’s proposed legislative agenda for the 2022-23 parliamentary session and there is growing support for alignment with the UN Model Law on Electronic Transferable Records (MLETR) guidelines.</p> With research showing that many businesses have no digital communication with their bank and continue to rely on fax or post to share documents with trade finance banks, financiers and trade counterparts, such initiatives will only gain momentum.</p> Reliance on paper documents increases the scope for fraud, an issue highlighted during the pandemic. Global collaboration around the exchange of richer data is vital to unlocking the opportunity for banks to verify financing requests and mitigate risk and friction. </p> In this session, SWIFT will explain how it is collaborating with fintechs to bring value-added services to its platform and help trade digitisation scale through collaboration.</p> Data developments</strong></p> In addition to replacing a number of bank-specific formats, ISO 20022 supports additional data elements that are carried along the end-to-end payment chain, including the account statements that corporates receive from their bank. Enriched payment data also enables more advanced analytics for better liquidity forecasting or improved risk insights.</p> The remittance information in ISO 20022 payment initiation messages facilitates the automation of reconciliations, invoice matching, and account receivables and payables management. When integrated with corporate enterprise resource planning systems it could also support automated cash position reporting and enhanced traceability and assurance of payments.</p> It is therefore clear that the move to ISO 20022 not only marks the dawn of a new era in payments, but also in financial crime compliance. In ‘The power of data: Delivering a step change in financial crime compliance’ session participants will explore the value of ISO 20022 for compliance, how data can be leveraged to detect financial crime, and how to overcome some of the barriers related to data.</p> Intelligent approach</strong></p> As quantum computing moves into the mainstream and artificial intelligence becomes more accessible there are legitimate concerns that cybercriminals will increasingly look to use these technologies to implement attacks that financial institutions will find hard to pre-empt or repel.</p> “To effectively mitigate cybercrime risks that come with innovative technology adoption, emphasis needs to be placed not only on the significance of technological innovation but also corresponding controls, particularly those that address the human element to guide user cybersecurity awareness and behaviour,” says Dr Paula Musuva, lecturer in the School of Science and Technology at United States International University - Africa.</p> To effectively mitigate cybercrime risks that come with innovative technology adoption, emphasis needs to be placed not only on the significance of technological innovation but also corresponding controls."</p>Dr Paula Musuva, School of Science and Technology at United States International University - Africa</cite></blockquote> But AI is also an effective tool for combatting cybercrime. For example, machine learning techniques allow for the understanding of content in context and promote more effective risk detection. In a day three industry session, a diverse group of experts will provide insights into how to stay ahead of malicious actors.</p> “From manual to electronic to digital transactions, sanctions screening is critically important to help safeguard customers, financial institutions and society as a whole in the fight against financial crime. Effective and focused use of data while respecting privacy principles is key to all participants in the anti-money laundering/combatting the financing of terrorism ecosystem,” explains Vivienne Artz, strategic advisor at GSS-Rose</p> Supply chain</strong></p> A variety of factors have contributed to supply chain pressure over the last 12 months, resulting in higher shipping rates and longer lead times.</p> Firms have taken a range of steps to reduce the impact of the pandemic on the movement of goods, ranging from renegotiating their logistics costs and exploring alternative shipping routes to switching to local suppliers and reducing the product lines or services they offer.</p> Supply chain was one of the most widely discussed topics at last year’s Sibos event, so this year a group of panelists from Barclays, McKinsey & Company, the International Chamber of Commerce, and J.P. Morgan will explore the second order consequences for global trade in terms of business models, capital, data, and economic flows.</p> DeFi implications</strong></p> Decentralised finance or DeFi is one of the biggest stories in cryptocurrency over the last two years. DeFi refers to a class of decentralised cryptocurrency platforms built on top of smart contract-enriched blockchains - primarily the Ethereum network - that fulfil specific financial functions determined by the smart contracts’ underlying code.</p> DeFi represents one of the fastest-growing and most innovative sectors of the cryptocurrency economy. However, concerns around its safety and compliance obligations remain. The Bank for International Settlements has warned that structural aspects of the system lead to a concentration of power and that if it were to become widespread, its vulnerabilities might undermine financial stability.</p> Representatives of Microsoft and some of the world’s leading banks will explore this topic in an industry session, looking at the potential ramifications of decentralised finance for global trade and considering the best way forward for facilitating access to financing for the real economy.</p> “The current macroeconomic landscape represents a perfect storm weighing most heavily on millennials. Nobody has a crystal ball, but we can assume today’s extreme circumstances will catalyse change,” says Marion Laboure, macro strategist, Deutsche Bank.</p> The current macroeconomic landscape represents a perfect storm weighing most heavily on millennials."</p>Marion Laboure, macro strategist, Deutsche Bank</cite></blockquote> Customer due diligence and KYC are essential to protect the global financial system from money laundering and financing of illegal and criminal activities. This was the motivation behind the establishment of the SWIFT KYC registry, a secure global platform providing predefined data fields and document types to standardise and streamline the data collection process.</p> In a session entitled ‘Mitigate risk with the SWIFT KYC Registry and traffic data’, experts from SWIFT and the asset servicing banking group of Crédit Agricole and Santander will explain how KYC and business intelligence data can be used to spot anomalies in behaviour, hidden relationships, or consistently high levels of activity with high-risk countries and entities, mitigate risk, and improve back-office efficiency.</p>