The Swift Nordics Regional Conference 2016 in Oslo is focusing on how to effectively harness disruptive trends and deliver practical, real world change to the financial industry. Over the course of two days, the programme will examine challenges and opportunities in the Nordics and beyond, and assess how new technologies, changing business models and collaborative ways of working pave the way for the future.
16:30: Ahman is telling us how actively the event has been covered on Twitter - and bigging up the blog of course - and thanking everyone again. It's over people. Thanks for reading, and see you again soon.
16:26: Remember to keep lifting your own talent, he says, wrapping up...
16:24: Now on 8 c's for innovation. (not i's). Culture. Creative Spaces. Careers. Cross functional. Collaborate. Collect. Constraints (counter-intuitive but necessary apparently). Capabilities... On constraints, citing a story about halving the number of pieces its designers had to work with to create the models. Sometimes less is definitely more.
16:23: And what if these guys say, how about we move money? Another new entrant to worry about...
16:22: Execution is everything. It has to work beautifully to achieve what you want. He is bigging up Danske Bank's Mobilepay... Now on Telegram... free messaging app... 15 billion telegrams a day! This could take out WhatsApp in two years... The pace of change again.
16:20: Now talking about the numbers of employees... The wealth is becoming very concentrated in the top few at companies like Facebook... You really have to focus your teams, technologies and processes on not just fixing this problem now but adapting to the gathering pace...
16:18: Were Kodak just doomed? No. Fuji had the same opportunity/challenge - and successfully diversified. Similar to Lego. They were a bit more targeted than Kodak. At the start we were doing 3-5 adjacencies a year and that was killing us. Now we do one every three to five years. So you can innovate TOO much.
16:17: The real cost of not doing anything is not that you stay the same, you go down... Just because you choose not to innovate doesn't mean others won't. Citing the Netflix example again. And referencing Kodak... again... with Moore's law, you can see what will happen... you can apply these models as well.
16:16: Where do you focus? It may look like we are focused ruthlessly on the core but we also have people constantly looking out to see what is next? Also, you need to ask, who are your 'intrapreneurs'? How do you identify them and give them space to innovate?
16:15: It's working now. 10 years of double digit growth.
16:14: 75% of Lego pieces can go into any set - highly efficient. Means new sets can be delivered very quickly. Efficiency in the back end!
16:13: Toys to life... Now this we get, Skylanders etc... Lego Dimensions is just shy of number one... focusing on what we do differently... it's a new category, should we play, if so how - and make sure whatever we do is loyal to our DNA.
16:12: Showing some very cool work spaces at Lego... lot of yellow.
16:10: Digitalisation... how can you use it in what you do to lift it and take it forward?
16:09: Infinite Lego worlds... why would you buy bricks? But Minecraft is already out there. Whether you want it to be in the world or not, it is. Wouldn't you rather they be playing our brand? This is his killer point... it's the Kodak digital camera thing again. Disrupt yourself.
16:08: Now on video games... done over 2bn worth of business with Warner... one of the most successful gaming franchises in the world...
16:06: More partner action... TV and film stuff. Ninjago, Friends, Lego Movie etc. It took a while to get some of the partners excited. When the TV show is popular, it sells physical bricks.
16:05: We realised that a Lego logo alone wouldn't make things sell. The design has to be right. 'Friends' was a great success - it got us into girls. They just wanted a different figure. We changed the doll and since then girls have been a huge success for us.
16:04: A lot of complexities we hadn't seen coming created a lot of costs for us... and at the same time the video game market was on the rise.
16:03: We fell into a trap that can happen with innovation. We went so far above plan in the first few years, we raised the targets, we produced too much, and it took us a while to recover...
16:02: For the 'new new' - there is a lot of focus on gathering data. We sent people out to other families. See how THEY play.
16:01: We know we have a finite amount we can do and we are ruthless about it
15:59: You also need one team, who realise that they can only win if they play together... Get the team all together as often as you can.
15:58: If you're partners are happy, they will make money, and so will you...
15:57: Bringing in partners earlier in the innovation process - ToysRUs etc are closer to kids than we are. Talk to them early.
15:56: A shared vision... manage for cash, manage for profit, manage for growth... Howard was hired in 2005 to work on the last, which was due to kick in in 2009. You need to do that. You can't say, it's so bad, we'll wait, focus on this and don't worry about the future... because by the time you start innovating everything has already changed.
15:55: Remembering what Hyttfors said about being 35... the new CEO took over at 34 so had one year where everything was possibilities!
15:54: Diversifying into new products but unintentionally dissolved its own DNA... becoming unrecognisable as a brand. And forgetting about its core customers.
15:52: He's going to talk about how Lego fell... and rose again. By 2000 Lego was the toy of the last century - but it was also in a lot of trouble. How did it fall so fast? Key answer - innovation. It did everything the consultants recommended but it didn't work... It had all the market research, it did it all, and it went horribly wrong...
15:51: Here comes Cephas Howard... Been doing innovation at Lego for 10 years... And now in the digital games area... Innovating the next form of play for kids... Digitally speaking.
15:50: Now introducing Lego man...
15:48: Now a global portfolio... Why is it crucial SWIFT is involved in compliance? It's a universal problem and it's non-competitive. That's the link he says - SWIFT is here to reduce cost and risk and enable agility - and is ready to work with its customers in the Nordics - and is here to build the future. We don't know how it will work out with blockchain but SWIFT's core strengths - security etc - are also needed in blockchain so we are confident we can play a role in that going forward...
15:45: Continuity first: core services, price reduction... Innovation side: core is not just about continuity... also looking at how we can selectively drive real-world change eg correspondent banking and GPII (ref'd yesterday by Raymaekers in digitalisation session). MIs and compliance - we see a lot of compliance, especially in MIs. Real time payments. CSDs. In the past five years we have seen a lot of innovation coming from this space. We want to help the banks get the best out of these innovations - real time is a great example. Compliance - giving the history of SWIFT's service provision in this area, starting with Sanctions Screening...
15:44: Ah... so how can SWIFT help? Now we are on SWIFT 2020 strategic priorities. Describing the path of continuity and the path of change. Which elements do we continue. Which do we innovate and change?
15:43: On his final point... Common theme around real-world change has been discussed... Really explored how to create real-world change rather than just speculating what the future might look like...
15:41: A payment is in many cases a means to an end and everything needs to come along with that... your payment needs to facilitate physical services... So the big question is, where do the banks co-operate? Where do they compete? Where do they look to start ups to complement? This is the balance in the innovation space. This relates to legacy... He thinks the SWIFT community can work on... its proven to be a good platform for non-competitive challenges... we can be the platform, technology and collaboration, to make things happen...
15:40: Once more... the Amazon example ie the goods get there before the payment...
15:39: It's clear there will continue to be a vying for resources in the banks. How to stay ahead of innovation while also complying with regulation. This will continue to be a tricky balancing act. Links to real-time session. It's clear this region is leading the pack when it comes to providing innovative service on instant payments. Consumer demand is pushing real time payments. Everybody recognises that.
15:38: Now on PSD2 and access to accounts, enabling competition. He refers back to Kreutzer saying the regulators' priority is to drive innovation, competition and consumer protection. At the same time we need to remain ahead of other regulatory areas... segues into FCCM... the drive to be more comprehensive in sanctions screening etc.
15:37: It's pretty clear that something will materialise from the blockchain and we will have to wait and see, Gilderdale says...
15:35: WTF... what's the future? Talking about Hytffors now. The opportunities and challenges of differentiation. Moving on the blockchain session: trying to separate the hype from the reality and two clear views provided he says. One view - it will completely change the value chain and big chunks of our business will disappear. The other was that we will incorporate and use the best of the technology and bring it in. Also learned Bitcoin is still alive even though it apparently died 95 times...
15:34: Now referencing Kreutzer and his call for a more agile, pragmatic approach to innovation. A figure that sticks in his head - 20% of fintech investment in Europe going into the Nordics region. Expects to see them working more with the banks.
15:33: Reminding us of the 'playbook for challengers'. Key takeaway - find a win win between new entrants and the existing banks. Everyone has to work together. A recurrent theme indeed.
15:31: Gilderdale is back, beginning his recap... reminding us of the stat we heard yesterday about 1% of DNB's transactions only now happening in the branch. Also the legacy problem of course. Now echoing Toivonen (Holvi guy if you remember) saying how regulation has HELPED. A contrast to the rhetoric of recent years.
15:29: This is a global problem, exacerbated by the internet. The downside of a globally interconnected world.
15:27: Thommessen is saying how grateful he is for SWIFT's donation since many organisations shy away from being associated with such a dark cause.
15:24: This is pretty sobering stuff... This charity is combatting sexual exploitation of kids, which is often about the exploitation of the very poor by the very rich. Again the rich poor divide rears its ugly head. Echoes the comments of the futurist earlier.
15:22: He is telling us about his charity. It's focused on stopping sexual exploitation of children. Launched in Norway the DAY SWIFT called and said it wanted to donate!
15:21: He's going to recap the sessions... Hope he's read the blog!... He is also talking about the CSR charity SWIFT is giving to around this event. Welcoming Olaf Thommessen ECPAT Norway's executive chairman.
15:18: Closing video rolling... Voxpops from participants... Bit of b-roll... Jaunty tune... Very positive feedback from participants...and big thanks from SWIFT for everyone participation. Nice. Now Gilderdale takes to the stage.
15:15: Stand by for the beginning of the final session...
14:55: Some excitement building about the closing plenary. It's going to last an hour and a quarter and feature Cephas Howard, Director of Digital Games, Lego, and Stephen Gilderdale of SWIFT, among other elements, apparently. The home straight is upon us.
14:35: Van Es is wrapping up and sending delegates off for the last coffee break before the grand finale - of which more soon.
14:33: Van Es pulls out the crystal ball question. What will banking look like in 5 years' time? Olsen - it'll be a world where customers choose their interface themselves and select products and services connected to that. They will change often based on interest rates etc. And everything will be close to real time. Walvik-Joynt - thinking 10 years - it's going to be - globally not just Nordics - banking of the unbanked is going to be a huge issue. One of the biggest the industry will tackle. And secondly there will be in 5 and 10 years a gigantic shift towards smart contracts and the internet of banking things. Things that interact in some way with the financial space. And to make that happen you need instant payments.
14:32: Walvik-Joynt says it's critical to collaborate where there is a need for interoperability. Not concerned about all elements being designed in precisely the same way. We have to ensure the service layer is as open and transparent as it can be. This is one of the strengths of the industry - pull together, identify issues, tackle them, fix them. They're non-differentiating. Interoperability has to be on the issues that are non-differentiating. Then you can have all the discussions about what it means for the nitty gritty details.
14:31: Quick as a flash, back in the real-time room. Picking up a discussion around harmonisation.
14:29: Haugaard... wrapping up... over the next few years the structure of how we work together will change rapidly. If we are not ready, not agile enough to operate in the future, then we will lose... He is thanking everyone and closing the session.
14:28: Kjollesdal - says corporates are challenging ERP vendors as to how they can respond to our future needs as well. We need technology in place to be competitive from our internal systems.
14:27: Bergdahl says the banks have been at the forefront but now there is competition (bitcoin) and the banks need to look outside the box more.
14:26: Haugaard says the Nordic banks should agree to be at the forefront, in the tradition of the Nordics. It's on the banks to drive this and in the future work with the corporates.
14:25: Kjollesdal - we will evolve and try to push for solutions.
14:24: Bergdahl: looking forward to having corporates on the SWIFT KYC utility - though smaller companies never will be.
14:22: Haugaard... maybe we should engage in closer dialogue with the regulators about KYC. Face it - around the globe there is no harmonisation. There are lots of country rules and a large number of countries with no rules. As an industry we have to do something.
14:21: Kjollesdal says the first issue is to agree on a standard in the Nordics, and then Europe - but there is also a big challenge about how we can find a global standard. I am interested to look at new technologies and solutions.
14:20: Kwan says in the UK banks have not issued bitcoin accounts. It's because banks are concerned about their licensing in the US...
14:19: Bergdahl says all banks have different AML expectations and there are differences between countries. The US is also important... Referring again to Iran and the lifted ban and the fact no one will restart the payments mechanism.
14:18: Haugaard is talking about trust... is this something for blockchain? Kwan says you need to start with something and agree that it works and then everyone starts trusting it...
14:17: Rantanen says he would love the LEI to be available for use by corporates. Why shouldn't this be used? There are discussions about who owns the registry and the terms and conditions behind it.
14:16: In the corporate to bank session now. Kwan from the earlier session (Magnr) is probing the panel on regulation and especially KYC. The concept here is that we can control our ID, digitise it, put it somewhere (blockchain?). We do it once, are verified, and this would simplify everything dramatically.
14:13: Time to move to the other session now... Don't go away...
14:12: Walvik-Joynt - it's about opening up the environments that create the competitive space. Maybe there is some adoption you have to foster in the beginning. You need a nucleus of a community driven idea or a couple of banks - but then you have to get your ecosystem as wide as possible so you are in front of your customers' expectations. Now talking about a furniture design company in the US. And the design team there has to go with clients and look at the other side eg Boeing about engines. That's the kind of thinking we need to bring into innovation.
14:11: Olsen: we have started hiring non-bankers - so we can get closer to the users. Many bankers have great ideas but we are only standing from one corner looking out. We have to be better at changing our organisation and culture.
14:09: Walvik-Joynt - talking about the innovation possible through linking different value chains. Invite other participants in. Had a good meeting with a women's fashion provider. When you sell clothes it's normally through a store. They have to ship all the clothes... the real barrier to a recurring transaction... make the box so it doesn't break and so it's easy as possible to return the goods. In one month they tripled transactions on their site. The more they return the more they buy the more they come back. That's the kind of thinking and logic we need to bring to the innovation discussion.
14:08: Olsen: banks are only part of the value chain. We need to collaborate with authorities around us.
14:06: Flatraaker - we try to be proactive. These new tech companies are very capable and able to be in contact with consumers and businesses. We need to be relevant. It's very difficult and it's very challenging. Others are coming up with propositions. Payments is important because it's a trigger factor but payments is just a piece of the puzzle. We need to be proactive and the old fashioned banking co-operation is still important but we see now there will be more interaction with the bilaterals where banks need to deal with and make arrangements with other types of companies. That's already happening - Visa, Mastercard, deal with anybody as long as they create value for shareholders. They're dealing with Google, with Apple... we need to move fast, be very relevant, and think beyond... we need to make it much more simple for when people are doing important things in their lives.
14:05: Van Es is moving to talk about new entrants and their impact on banks... how are banks coping with it, and innovating?
14:04: Most people in the audience say they would want a cashless society - and most would like it now...
14:03: 30% in 10 years' time... 24% never... 21% in 20 years' time... 7% it already is. Mixed views from the audience.
14:02: Van Es is talking about cultural differences between different countries. Germany is famously cash-oriented. Another digivote... when will your country be a cashless society?
14:00: Walvik-Joynt says it's about removing the hurdles... and it's about how you innovate to keep it really efficient. It is efficient already in the Nordics but it can become even better. Cashless society debate takes us in the wrong direction. It's about increasing convenience.
13:59: Flatraaker says it's not part of the banks' business model to solve the black economy which will still be there. But for a few years in Denmark there has been a cashless society for the white economy. We now have the tools to get rid of the last mile he says - P2P transfers and also cases when it comes to clubs, fleamarkets, social activities... and if you don't have a terminal that's cash. Now services are becoming available to get rid of all that.
13:58: Olsen says the cashless society is a unicorn like the paperless office. Having said that real time can bring us very close and will become the rails for most law abiding people. He is lauding the benefits of real-time versus cash - including how much more efficient it is. And safe.
13:57: Van Es is moving on to the cashless society which she says depends on real-time payments.
13:56: Olsen - we need to lead our customers. References Ford. If he asked what people wanted they would have said a faster hors (allegedly). Banks' innovation needs to lead.
13:55: Flatraaker: the proof is in the pudding. Did we expect that mobile should expand in the very short time it did to become the power channel of a bank in 1.5 years? We didn't expect it to go that fast. Why is it so? First, the experience of people with new technology is there for everybody. We also know there are a lot of fintechs capable of providing convenience not possible with old style banking.
13:54: Swish founder in the audience - says when it started there were no customer expectations. People said they didn't need it as they had cash and cards...
13:43: Olsen things not. It will be one size for all. Instant. Walvik-Joynt says that to meet customer expectations there is a lot you need to be ready for. The processes behind it. You need to think about it in the right way. And think about the usability and design of the services on top of the instant infrastructure - that is the distinguishing space.
13:52: Van Es is asking whether people will accept other types of payments?
13:50: Some years back businesses and consumers were agile, started using the internet quickly, we created the multi-channel approach based on the internet which led us to the highest penetration of online payments. Now we are going into the digital age and in the last one or two years we have seen a dramatic shift in behaviour. Refers to Bentestuen yesterday. The mobile went from a small part to be the important part and we now invest everything in that interface. It's a dramatic shift in a very short time. The Vipps story again.
13:49: Flatraaker: this is about retail customers but also the interaction with businesses. The customer expectations stem from what has happened with Apple and others reinventing technology and how you can use it to create convenience and access to enormous amounts of information and social interaction - on a mobile, anywhere, anytime. Creating the notion of the real time, must happen 'now'.
13:48: Olsen: customers perceive real time as cash replacement and cash is real time.
13:45: Walwik-Joynt is pleased. It means there will be a drive to get it out there. In banking something has profoundly changed over time - useability and the customer experience is the new loyalty. Loyalty will be driven by how usable it is. He's name checking his millennial daughter who uses Snapchat - it's very now, 3 seconds ago didn't matter. Real time is fuelled by customer need for this to happen right away. There's a great opportunity to use instant payments and for the banks to engage in some of the shared trust assets. I have a shared trust asset. A house I inherited from my dad. It's out there on Airbnb. It's all part of an ecosystem banks can tap into and be a catalyst to push it forward. The key - enough services that customers expect and also surprise them.
13:44: Some digivoting up next. First question - what is driving the move to real-time? Overwhelming - 71 per cent - customer expectations. Dwarfing all other answers. Second highest at 13% new entrants.
13:43: Now on to Flatraaker - 'now' as well...
13:42: She asks Walvik-Joynt the same - he says 'now'.
13:41: Van Es has finished her piece and is introducing her panelists... She is asking Olsen for one word to sum up instant payments... he says 'convenient' and 'nice' (two words obvs).
13:40: It's not just small homogenous communities doing this - it's all. The big ones as well. Everyone is looking at this.
13:39: We also see that the products/schemes differ. Timings Amount limits. Thresholds or not? One real time instrument or multiple with different service levels? Lots of room for growth and innovation - depending on the community and the needs of the customers.
13:38: In many countries real time payments are very domestically driven. Embedded in the domestic DNA of the community. There's no real urgent need to do cross-border instant payments. However we see the ECB, the EPC and the ERBA have launched a pan-European real time payments initiative. How is that going to turn out? Will there be multiple providers? How will it work? Interoperability is driving the discussion. How can we sure there's a level playing field that will drive this forward?
13:37: Another variation is that the driver behind the initiative can vary. In some countries it's the MI or the clearing and settlement system operator who will kick it off, sometimes in isolation, not consulting the banks. In others it's more community driven. Central bank, commercial banks, clearing & settlement operator thinking about the project together.
13:36: We also see some systems - some losers - not in the room! - struggling with limited take-up. Often haven't thought through the services you need to build around the real time payments systems. On the other side of the spectrum we see the winners who can testify to successful adoption.
13:34: We also see common ground on the common use of a standard. For real-time payments it's ISO 20022. It's become the default language. However, she says, the variations are still there. There are still many different approaches and models. In some it's an additional set of rails added to low value payments to complement high value. It's not a strategic innovative platform designed to cater for other types of payments going forward.
13:31: In the past 12 months there has been consensus. Real-time payments initiatives are everywhere. Not the exception anymore, the rule, she says. Also see an increased shared understanding of what real-time payments are. In the past they had many features and models and now everyone seems to agree on the common definition - meaning there are a number of aspects that have to be met. Parameters include 24/7/365 infrastructure. Open for business the whole time. Second, the payment is instantaneous. The funds have to arrive at the beneficiary in seconds or minutes. Third, payments sent through an instant payments infrastructure are irrevocable. It's done, in a matter of seconds, so it's irrevocable. Last but not least, the aspect of certainty. Certainty for the originator and the beneficiary is key. These four characteristics are now a common interpretation of what a real-time payment is. That doesn't mean that all systems are already working on those four but it seems to be the goal.
13:30: Ahman is introducing moderator Van Es... who is setting up the session now. Again we're implored to ask our questions. We're going to start with a global overview on real-time payments.
13:26: Going to start off in the real-time session. Room is filling as they prepare to get under way.
13:15: Deep dives again when the sessions restart after lunch.
One is on 'real-time payments innovation' and will doubtless attract the lion's share of the delegates. Chantal Van Es, senior market manager, SWIFT will moderate, and speakers will be Kasper Sylvest Olsen, Danske Bank, Paul Francis Walvik-Joynt, NETS and Dag-Inge Flatraaker, DNB.
The other is 'managing change in the corporate to bank segment'. Soren Haugaard, Danske Bank, will moderate this one, featuring Harri Rantanen, SEB, Tor Stian Kjollesdal, Statoil and Matt Bergdahl, BellerudKorsnas.
12:25: Lunch for the live-blogger too... Back in an hour.
12:15: Neutjens is wrapping up, reinforcing the message of how SWIFT is focused on improving harmonisation among MI use of ISO 20022... and also emphasising how else SWIFT can help, especially if the MIs opt to use SWIFT... Thanking his panelists and sending off the delegates for lunch...
12:14: Crepaz - in securities we will start with clearing and settlement then there is the question of how CSDs will function going forward (nominee account or single investor account structure). When every company can accommodate as many businesses as possible in one standard then that is when it will become huge...
12:13: Rantanen: PSD2. But there is also a lot already there we are not using. Factoring. Trade finance. Combine blockchain and smart contracts and move the payload into ISO 20022...
12:12: Neutjens is now going to ask each of them to be a futurist. What's next? In terms of usage of ISO 20022.
12:11: Crepaz says we need to get our hands even more dirty and try to improve the process on the fly. We rest assured that SWIFT will continue learning and lead the way in this process...
12:10: Fjereide: e-invoicing. EU regulation is more or less demanding us to use ISO 20022 for e-invoicing.
12:09: Neutjens says this proves that it's not just a message standard, it's a business model.
12:08: Not so much stumbling, it's really lively development now, says Rantanen. Now discussing how ISO 20022 could be applied to access to accounts under PSD2! ISO 20022 is still evolving and we want to exploit it to address upcoming technology challenges.
12:07: Neutjens is asking the panel based on their experiences of adoption, and the availability of tools to help make it easier, the fact we are learning and picking things up, from their perspective is there anything else that is a stumbling block to be addressed?
12:06: Emphasises there are tools that can solve the problem...
12:05: Fjereide: Not many banks want to update their systems every time there's a new version of the message type. If we have a common understanding we can use ISO 20022 within a closed user group. To send outside there are tools that can translate and market practice that can be adopted.
12:04: Neutjens reiterates how easy FIN is in a many to many context. If you open up ISO 20022 in that direction there are conditions that would have to be satisfied for it to be done efficiently. It's a good example of how all the lessons we are learning now in the corporate to bank and MI space can be applied in a many to many space.
12:02: Rantanen reiterates that it needs to be understood why the standard is so precious so people don't split it into market variant versions. It's a community issue. We have to collaborate to make this happen in a way that all the stakeholders in the market are involved and understand the benefits and pitfalls.
12:00: Asking Rantanen about whether SWIFT needs to go further in the corporate-to-bank space around harmonisation... Rantanen says there are issues. Corporates become disappointed if the standard isn't applicable for everything they want - if there are variants that don't always apply. This has happened because people have tried to make ISO 20022 easier to use... We want to use the standard schemas that are available and carry all the information needed and follow the guidelines. They only way forward.
11:59: Neutjens says SWIFT is engaging financial institutions in the harmonisation process as well. Wants their support, their input into priorities around market practice etc.
11:56: VP is a founding infrastructure... why is it important? Asking them to give up flexibility, to benefit participants... Crepaz… it's all about cost. Having too many versions of a message makes the environment more complex and is a huge cost driver. Since there are a lot of transactions going through us now and we are going to grow, we have a natural desire to have it harmonised. We want to reduce co-existence of versions, reduce the variants in the ISO 20022 now (T2S subset, SWIFT subset etc) but it's also the balance between flexibility... Giving up flexibility will give a cost reduction which from an MI point of view is what it is all about. Competitive service at a competitive price.
11:53: You have FIN which is rigid but works, and ISO 20022 and clearly the world would benefit from more harmonisation. Asks Crepaz to comment on the 'harmonisation charter' SWIFT set up - asking people to say, please supply and use global market practice.
11:51: Neutjens is picking up on the word harmonisation. He is giving context. If you compare ISO 20022 with SWIFT FIN - the latter is proprietary and network dependent, the former is network agnostic and international. One of the initial appeals of ISO 20022 was the flexibility. On FIN, third weekend of November, you all change from one version to the next. Everyone hates it but it works. It is transparent and clear and allows a cost efficient way of evolving. Compared to that ISO 20022 was all over the place. Everyone used it as they wanted to. With increased adoption they all become exposed to each other and you end up with a huge diversity of implementations that are slightly different...
11:50: Fjereide: of course there are corporates that will stay on Edifact because they can't reach everyone using ISO 20022. There are great opportunities for corporates if we get the same way of working across all the Nordics.
11:49: Rantanent: it's difficult to prove in a bank that corporates are behaving differently because they are harmonised. We also as banks then have to act in a different way and observe market practices etc. It takes a lot of work internally to ensure that is understood and acted upon.
11:48: Rantanen says service quality levels can be higher from banks for corporates when ISO 20022 is in place - and it's easier to compare and drive competition between your banks...
11:47: We seem to have entered during a discussion on the costs of ISO 20022 implementation...
11:45: Time to move to the ISO 20022 session and pick up that discussion...
11:44: Freire agrees there is room for streamlining. The main message is to create the right incentives for the whole industry to move in the right direction. The guidance is principles based.
11:42: Hagelstein is saying to Freire that organisations like CPMI should do something more. We are all doing the same due diligence on our providers. They're being audited by all of us. I think there is an opportunity to mutualise this effort and this could come from the authorities - they could attribute labels of quality. Who can check all the source code of software or work out if something has been added to your hardware? There too there is the potential for mutualisation of the effort - labels of quality. Everybody pays a little bit and the code is looked at once.
11:40: There is not a silver bullet. There are things you can do. Check your provider's practices up front. Get is auditor records or audit him yourself. Do penetration testing on this kit. All these things have their limits of course. So what at SWIFT we are trying to align all these techniques to manage our providers plus come back to them regularly - to check they remain safe over time. Also think carefully about the connection you allow between this provider and yourself. Think twice before allowing access and if you allow it think twice about how to design it. Because it's one more entry point into your system by attackers.
11:38: We are all exposed to a broad range of dependencies on providers. It can be malicious. It can also be a provider who has left mistakes in his code. Every software contains mistakes. There is no doubt. Some are not too annoying but many permit exploitation by attackers. There are two broad ways attackers operate today - compromising human behaviour and exploiting weaknesses left in applications. And if an attacker figures out this opportunity...
11:37: Think also of your software providers. It could contain 'backdoors' eg a hidden account. How to protect against that? Think of hardware. How can you be sure there isn't a backdoor in what you receive.
11:34: Asking Hagelstein for his perspective on interdependencies. Governance must be engaged, he says. We have as an industry two Achilles heels. 1) The people and 2) the providers. Most attacks start with someone making a mistake. Receiving an enticing email and clicking on the link. On the providers... all of our organisations are dependent on external providers and you need to keep this in mind. You can be as strong as you can be - and the attack can come through the a provider. It can also be not cyber-related. Eg cleaning personnel. Cleaner comes in the evening. One leaves a camera recording pointing at a keyboard and the evening after the person has user name and password and can log into systems.
11:33: Gisiason: you can max out your budget on tech spend and then not have the money to react to an attack.
11:32: Rieber: you don't become secure by acquiring technology. It's about processes. The ability to have an organisation that is able to act when a breach is detected. The continuous work surrounding the technical capabilities. You can't buy yourself out of it by investing in technology.
11:31: Tandle commenting on how a CEO invests in security... You have to do it gradually. You have to know it's important. For a trial service it may not be as important. For a successful service it's higher. You have to know when to invest the money and it has to be timed right. If you invest too much too early you will lose in the market. It's definitely a challenge worthy of CEO attention.
11:28: Gisiason is a hacker! His company works all over the world and one of the biggest problems is understanding, the divide between the technical and the governance. A CEO is allowing lots of expenditure but they don't know what they are spending it on. They ask why. We have never had an incident... My opinion on this is that we need to make it more personal. I would ask a CEO, what do you most fear? What keeps you up at night? And then I do it - to prove that it is possible. So the CEO gets an understanding of the real threats. For an FMI this could be the ledger. It could be the CEO's email. If you go about it in a way that you use the technical security testing to demonstrate the viability of integrity/confidentiality loss - in a real world way - people get that understanding. They see there is a reason to invest and there's lots of reason to be worried about that investment because you don't really know what you're spending your money on. You might buy lots of next gen firewalls etc - very expensive - and then you find it's very easy to bypass for anyone that is targeting you specifically...
11:27: Freire is asking about decisions between competing investment opportunities... How do you see the challenges for FMIs going about this issue?
11:26: Are we going to try to predict the future? Protect against the last one you experienced or the next one you will face? It's important to try to think forward about what can and will happen.
11:25: The attackers don't want to spend too much money. If you can show a good defence it may put them off. On the other hand if they do want to go after you they have the resources to scale up what they do. A macro-trend - professionalism in the cybercrime market.
11:24: A consequence is that the hackers have a business case...
11:22: Rieber - there is more often than not still a human element involved. What we are seeing now is that through the last 15-20 years we had gone from a fairly asymmetric warfare, the big corporations working against the solo hacker, the young student, but what we are seeing now is that we are up against a more symmetric opponent. Criminals are starting to be more professionalised. In groups. Asymmetric warfare, now more in conventional warfare, a symmetric relationship between defender and attacker. You can see many indicators of that. How they professionalise. How they sell malware. Have helplines for malware. Only charging for successful attacks. It's starting to become a commercial business, a market more like ours.
11:21: Asking Rieber to elaborate on why cyber is important. How to tackle a target which is constantly changing.
11:19: Encrypting ransom-ware - emails hitting private individuals, public sector, businesses etc - they are trying hard to spread and do things smart and it should be quite easy to prevent but a lot of institutions are being affected. It's a sign to me we have trouble. We need to work really hard on our defences.
11:18: DDoS... more background noise. Mostly disenchanted young men. Will be more difficult when it's someone determined to get you.
11:17: Nation states and criminals attacking IT and infrastructure - advanced, and persistent - they single out a target, you, figure out who you are, your business, your organisation, your IT infrastructure and then they go for it and they are being successful. Defending against accidental threats is relatively easy versus defending against someone who is targeting you, infiltrating your staff etc...
11:15: Tandle has moved on to phishing. Credit card info has been a target for years but is low value. These days we also see more targeted fishing towards key personal - giving credentials and information for a more targeted attack. It's being put to new uses all the time. A lot of the time the vector is email but also see phishing by SMS, Facebook... and in the corporate market you will see the same thing.
11:14: The whole area needs attention. In Norway people have used email for 20 years and have started to trust it. But the truth in 2016 is that you really can't trust email. Which is difficult. You need people to try to be intelligent. If you get an email that is important and could make a difference, maybe make a phone call. CEO fraud. Technically completely trivial. But Austrian airspace company and a Belgian bank gave away millions. You need processes that actually avoid that. Doing something about that takes a lot of steps.
11:11: Tandle - why is this important? Looking at Norway and the Nordics, very digitised societies. Has happened very quickly. The financial sector is completely dependent on technology a lot of which has not been created with a critical infrastructure component frame of mind. Dependent on technology not made for the purpose we are putting it to and we are seeing the consequences. A lot of investment decisions look in the mirror. There will have to be a change where we invest before incidents. What do we see? In Norway, my company services banks and insurance companies, deal with incidents, and the incidents they see is internet banking fraud. Today we see a blend of manual fraud and technology that requires different defences. The threat moves quickly. You have to keep abreast. Everybody else is running so you need to too. Also see email based attacks. Sounds trivials. But emails are used to get people to give away small pieces of organisation but also to plant malware as the first part of a really serious attack.
11:10: He's going to start the discussion, by asking the panellists to give a sense of why this is important. Tandle first...
11:08: Highlighting the ecosystem again - all the steps in your cyber framework. When going about your cyber strategy you must take into account all related entities to your organisation and how they would have an impact if there was a successful cyber attack. Make sure they are also part of the recovery. A comprehensive approach involving all your counterparts, at least the critical ones...
11:07: The key issues for FMIs include - ability to resume operations quickly etc - and most important - ownership of cyber resilience at a very senior level. The guidance mentions 'board member'. FMIs should consider investments in cyber as part of the overall business strategy - not the IT strategy. If an FMI has to decide between competing investment opportunities, it's important that the person in charge of that decision has the necessary elements to take that decision. Really know what is at stake.
11:05: So there was a need to do something and the work kicked off. Is highlighting one point - this guidance is not going to be an additional standard. It's going to be an elaboration of standards that are already there. The CPMI has published its principles for FMIs in 2012. One - 17 - is about operational risk. A key consideration there is cyber. The guidance is elaborating on that and bringing more precision. National central banks will implement these moving forward.
11:04: He is showing a slide illustrating the 'transaction chain' concept in the guidance. The moment a transaction starts till the moment it gets settled in central bank money. A lot of processes, entities, people involved.
11:03: The legacy problem again. Some systems not designed to cope with cyber attacks. And also the links. It's not enough to be resilient alone unless the ecosystem in which you operate is also resilient. As an ecosystem you then become gradually more reslient.
10:58: BIS - CPMI - started to pay real attention to cyber security for FMIs 5-6 years ago. Realisation that these are critical nodes in the financial sector and successful hacks on them would have severe consequences for the sector. Realised it's a cross-sectoral issue. The initial things discovered were that there was a huge lack of awareness of the problem in the FMIs. The level of cyber awareness was different in different FMIs. Not one picture for the entire industry. Participants were starting to talk to them about it. Two hour recovery time objective - the guidance has this requirement. The time in which an FMI should be able to recover. There was an excessive reliance on investing in availability as opposed to integrity, he says - data integrity. FMIs were saying, we have never been breached before, there's no reason to allocate this huge investment in an area in which the historical data would not back it up...
10:56: Making a start here, kicking off with the cyber session. Freire welcoming us all. Describing the role of the BIS and his reason for being here. Not his expertise he says, but to facilitate. BIS has published a consultative paper on cyber resilience for FMIs - November 2015. Finished end of Feb. BIS in process of looking at the comments. There will be a final version of the guidance. He wants to introduce some of the aspects of the guidance... after having introduced his panel.
10:46: After the break we go into parallel deep dives again here, so we will be doing our 'two places at one time' trick. Bear with us.
One session will be 'progress report: the community case for ISO 20022'. This one will be moderated by Patrik Neutjens, ISO 20022 Programme Director, SWIFT, and will feature Harri Rantanen, SEB, Atle Fjereide, DNB and Bjorn Stendorph Crepaz, VP Securities.
The other will look at 'cyber-prevention in a changing world' and will be moderated by Emanual Freire, BIS, with speakers Morten Tandle, FinansCERT Norge, Theodor Gisiason, Syndis Iceland, Andreas Rieber, Nets Norway and Jacques Hagelstein, Deputy CISO, SWIFT.
10:28: Skinner is wrapping up here... coffee break now. Back in 30 mins.
10:24: Karalevicius - there will be organisations that can only exist on blockchain... Meholm: two legs. One is we want to reduce our costs. And increase speed. And also create excellent customer experiences and if you can use blockchain as an enabler for that it would be perfect - payments, smart contracts. Also about supporting the internal processes in the bank. Kwan: says he has so many things to say. Smart contracts definitely. It's the way things are going. Reducing costs. Provenance. Tracking where assets come out of the ground... One of the things I am going to be fascinated about and I can't predict this, where I am seeing use cases, just talking about bitcoin, emerging markets where they don't have the infrastructure of banking. Returning to his earlier point. They're using it in ways we haven't even thought of.
10:23: Yes says Meholm. Reminding us that in a DL the way we share information is changing. Skinner is asking for the most exciting developments they see in the next 18 months...
10:22: Smart contracts, provenance, payments, digital ID and clearing and settlement... plus smart asset tracking, says Skinner - these are the real world applications. If you can move to tracking all trade flows in real time that would be transformational.
10:21: Kwan says smart contracts are the next evolution of DL. Still a way to go he says. It's the network effect that is taking over. Bitcoin currently has the largest network effect. Smart contracts are fantastic piece. Joining the 'plug your own paper' gang - has a paper on smart contracts apparently.
10:19: Skinner sharing his views on the biggest impacts... legal industry? Digitalising mortgage contracts etc... Name checking Everledger - recording the buying and selling of diamonds, where there's a huge issue around fraud/fraudulent insurance claims/quality etc.
10:18: Kwan says if you talk to people with just a business background, you have to explain a lot for them to get blockchain. Like the futurist said we don't think about agriculture as a technology. They respond when you tell them how it can help them solve business problems.
10:17: Meholm says you need a technical background to be part of the discussion but to find out the use cases you need a business background. Both views are needed, he says. Skinner asks how the head of transaction banking at Nordea gets to grips with this? Nordea has 10-15 people on blockchain. Mix of programmers, tech background and business background.
10:16: Skinner is moving on to activities around blockchain in payments. Says to get under the hood of the technology you have to be a rocket scientist. Is asking Meholm how far into the bowels of blockchain he has got...
10:15: Blockchain is more about decentralisation - and you shouldn't decentralise government services... says Karalevicius.
10:13: The UK government is trying to take a leadership role, Skinner says, and is plugging his website again where he has summarised a recent white paper on what the government in the UK thinks blockchain could be used for... He is highlighting that most of what is happening is experimental. And the fact that everyone is following Estonia in this area.
10:12: Skinner says the other area of development is around digital identity structures for blockchain... Karalevicius mentions the problem of loss of private keys, which are impossible to get back in a decentralised blockchain. He says identities will probably be backed up by government backed initiatives, secured by smart contracts.
10:11: Meholm is mentioning AML requirements for banks as an issue here...
10:09: Skinner sucking up to SWIFT hosts, suggesting they are critical... Kwan says we are talking about internet versus intranet. He cites the futurist's reference to what Vodafone tried to do with a private internet solution. In this case we have a private network running which is trusted - but many outside won't necessarily trust it because it's managed by a certain group of people. They manage the security, but who manages the managers of that security? It's a system that has to secure itself to keep itself running. If we are working with a decentralised service. If I know that Nordea is a good company, and everybody else says it, it's a social networking process. A lot more robust and a lot more secure.
10:07: Kwan says blockchain can change clearing and settlement but it will take a while because every system is based on incumbent processes... exchanges, clearing houses, brokers - we are talking about a lot of systems that need to be changed. Can we just throw blockchain at it? Not that simple. Like throwing the internet at a bank that does everything physically. Digitise a product, put it on blockchain, get people to use it. So that's why we started with bitcoin. A digital product. You can't just throw futures at the blockchain.
10:05: The important thing is we are co-operating - and R3 is supporting us with that, he says. Skinner says 1bn $ went into blockchain in FS last year. The biggest area is clearing and settlement. He is name dropping Blythe Masters and Digital Asset Holdings/Hyperledger... but there are others as well. Referring to Nasdaq's initiative - and it's claim it can settle trades in 10 mins versus three days. Asking Kwan what the impact of this will be...
10:04: Skinner is moving on to try to talk about real world applications and asks Meholm to update the delegates on R3, which he is doing...
10:02: Karalevicius: crypto currency doesn't compete with the governments. It doesn't impact monetary policy. It's not anonymous, it's pseudo anonymous. On the blockchain you can see how bitcoins are transferred. It's much easier to counteract crime. You can follow the tracks. Why I like bitcoin - it's open source. Anyone with ideas about how to make it better, better value, more scalable - you can modify the protocol.
10:00: Kwan... people fear this because of the unknown. The biggest money laundering systems use cash. Which is why the ECB is considering dropping the 500 euro note. The Fed in the US is talking about the same. So this is just a fear of the unknown. We talk about bitcoin as an asset. Does anyone think about the actual value of gold? What do humans put into what we think of as value. If everyone wants the piece of gold, its value goes up. If everyone wants bitcoin, its value goes up. the fear is unfounded.
09:58: Skinner... again... talking about getting a cheque from the US and the bank saying it would take 28 days to clear. And it would cost GBP200 to process... The reason blockchain is exciting is because we are moving to real-time and free...
09:56: Kwan telling us about Magnr. With blockchain there is a technology that satisfies a global financial requirement. He is an Aussie. Was sending money back from the UK to Australia and paying 50 quid to send money home. Realised when he joined a bank why - so many counterparties, so inefficient. Then bitcoin came along and he saw the possibility to send money to Oz for next to nothing - and realised it would be a game changer. That's why emerging markets are taking on bitcoin. They don't care about physical cash. They just want to be able to buy something without having to walk 100km to get cash out of the bank or store it under the mattress and risk it getting stolen. That's why we set up the bank and we are seeing a lot of traction and a lot of reasons for growth.
09:56: Meholm says smart contracts are important. Says the blockchain and the DL are separate things. But the combination is ground breaking for the banks.
09:54: Meholm saying blockchain is very interesting. The more you dive in, the more you understand it is going to change the way the financial industry works. This is not a new version of what we do today. It's something completely new. But we are premature. Skinner is wading in again... name dropping Visa head as saying blockchain is the future of everything... because we now have digital proof that is timestamped of the transaction but it doesn't have to be a financial transaction... Asking what Nordea is specifically doing...
09:50: Karalevicius: differentiating between blockchain and bitcoin, but pointing out the only feasible application of blockchain so far is bitcoin. Also no blockchain in the 2008 paper. He's making a strong case for the value of bitcoin. He says you can't deploy blockchain without some token like bitcoin. If blockchain will be applied to financial markets - it will be for new types of securities (not Google stock). Skinner is disagreeing - says it CAN be deployed outside bitcoin.
09:49: Introducing the panel... Karalevicius is a rocket scientist he says, Meholm a banker and Kwan creating the world's largest bitcoin bank. Asking them for their opening thoughts.
09:48: Blockchain is a critical part of the change. Distributed structure. Access for all. Cheap. Real-time. Trusted. Some people think it's an opportunity to replace SWIFT. I think it's an opportunity for SWIFT to replace SWIFT.
09:47: It's a trusted, shared database on the internet, says Skinner, simplifying it. The critical word is 'shared' he says. The question is, who's sharing? He is name checking R3 and Digital Asset Holdings. And plugging his own books... !
09:46: Skinner setting up the blockchain session. Asking the audience to raise their hands if they are comfortable with blockchain and could comfortably discuss it with colleagues. About 5% say yes.
09:45: Wrapping up to big applause.
09:44: This is the network society. It will create tremendous problems for today's leaders and tremendous opportunities for all those who want to disrupt. He is urging the delegates to think about how they can create change rather than just observe it.
09:42: Showing a pic of migrant workers in Qatar. There to survive, to wire back money to their families. They are not part of our system so they have to stand in line outside a Western Union terminal who will say, you wire the money, I will charge you 15%. What do you think these guys think when they hear about a decentralised trust network? A decentralised ledger telling you everything looks fine. This will change a lot.
09:41: He is likening permissioned blockchain to private internet... Not the answer he says. Bitcoin has died 95 times he says. It's not about currency. It's about a network of trust. When we created the network for information everything changed. An Egyptian blogger could have the same power as CNN. It's about a decentralised network of trust. We will all have the same power as Citibank. How would we be able to control it? But the system of control doesn't work that well for a lot of people. 6 billion people aren't even part of it.
09:40: He says in the future we won't look back at 2008 as the year of the crisis but as the year of Nakamoto's bitcoin paper... We understood nothing then, just as when Tim Berners Lee published his paper on the internet... That was a great day for 7 nerds...
09:39: He is showing Vipps. Now a bitcoin wallet. Asking the audience shall we go for it? Money like sending an email? No fees? No intermediaries?
09:36: Showing a video of Google trying to give connectivity to the unconnected. Use balloons to push down broadband to people below. Then they don't only have computers and mobiles - they are connected. You remember what happened when we went from PC to internet... connectivity is an even bigger deal than processing power. When these guys are part of the information society they can leapfrog again. They can leapfrog infrastructure. They don't need school they can go to online universities. They can build an alumni network of 30,000...
09:35: The next generation will have a new economy. They will share assets in a different way. They will share their sailing boats and cabins in the woods. If we share we don't have to earn so much and we don't have to go into debt and we don't have to worry about the environment - because we don't consume so much.
09:33: Airbnb was founded in 2008. Not very long ago. In 2008, a couple of students in San Francisco, couldn't make rent, put air mattresses on the floor and rented out via a website. Do you think Hilton was scared then? The trust platform doesn't need to own any property, hire any people. 2008-2016 - prediction this year is that Airbnb will be in 192 countries. In NYC it's such a big problem to the hotel industry, they... tried to make it illegal! Right now the value of Airbnb is greater than the Hilton Corporation.
09:31: The next generation will trust in networks. The thing I trust is what other people say about you. It's not all about communication. It's already a new economical paradigm. We talk about the sharing economy. He is showing a pic of Airbnb... The reason we can do this is because Airbnb gave us a network of trust. I can get them to help me find someone I trust. We have always shared, but with very few people. The ones we knew. Now with the networking power we can get to know so many more people to trust.
09:30: The new generation will have a totally different view on trust. Who? What leader? Brand? In finance everything is built on trust. I trust the IOU on this dollar bill because the US says it will pay it off. It says in small letters... in God we trust. That could be something if eventually they can't pay their debt... we said all the time there is a disclaimer here!
09:29: The line between a lunatic and a genius is not very big. When we build Einstein... then we will have double Einstein and double double Einstein...
09:27: There is no way for a human being to be as knowledgeable as a computer. This is the future of course. AI. We will build machines that are not only doing what the programmer told them - the machine is powerful enough to innovate, learn by its mistake, come out with new solutions. Like all technologies it will start out very bad - referring to videos on YouTube of robots playing football - they're not good now but in 2050 they will beat the world's best human teams.
09:26: We are in a time on this planet when we not only think about ideas of the future but we see this is happen right now. The IBM computer that one at Jeopardy is open source - so if you want to develop on it you can.
09:25: They will also laugh at our attempts to have competitions with computers. Like chess. Just to prove computers are not better than human beings. But obviously there is nothing that humans can do better than computers. Showing a pic of the computer that played Jeapardy - and won - while offline.
09:23: Why is it a tech revolution now? Because everyone has access. Showing a pic of computers in the 70s. When you see it it's easy to understand why not many people owned one. Very exclusive, expensive, complicated... But today everybody has access. In Dec Google and Nasa told us they got the world's first quant computer running - 100m times faster than a PC. Sounds like a pretty fast computer. He's showing a picture of it. And now a baby using an iPad. Our kids in 15 years will come to a conference and laugh at the pic of the quant computer - because they will all have one in their eyes.
09:21: If everyone has access to advanced technology and not even politicians can interfere, then we have a new society. Wherever you go someone will mention Uber. Where did that come from? Challenged the taxi business... When Uber comes to a new city, the politicians have a crisis meeting, and always come up with the same solution - to try to make it illegal. We will see a lot of proposed legislation in the fintech business in the coming years and the only thing that will get us is walls. The future will occur outside the walls where it's legal and we will be stuck in the past.
09:20: If you don't like an idea - buy it. Eg blockchain...
09:18: This isn't a temporary crisis. It won't be fixed. We also see a redistribution of wealth. This is about developed markets. People who are working but can't even afford food. It's not only a problem for poor people. What happens if the middle class don't support the leaders any more? They start to vote for guys with funny haircuts (pic of Trump). It's not only the US - UK referendum on Brexit... all these new political ideas... Building walls in a networked society when everyone is turning 65 or over. When everyone in Asia is connecting, we should build walls? Sounds like a strange idea for the future...
09:16: There is nothing growing. We are borrowing from the future. We are all part of the system. I understand you are perfectly fine people. But the system is getting more and more dysfunctional. If 100% of the population worked in a bank nothing would be created of value. You don't even cut my hair if I come to the bank.
09:15: Imagine taking the Luxury Trap team to the banking industry. There isn't a bank in the world that can pay its debt. There is no money there... Imagine sending them to Mario Dragi in Brussels... great option, create growth by borrowing it from the future.
09:14: Here in Scandinavia we have a TV programme which tries to educate people about the difference between debt and assets... Lots of loans feel like growth but it's just debt. The Luxury Trap. People are amazed, amused that it never works.
09:13: He is talking about the Shanghai Stock Exchange. We all turned to Asia because it was growing - but now it took a turn in the wrong direction too... But what do we call a crash? We believe the top price, rather than observing the overall growth.
09:10: Another problem that will cause a lot of change in the future is the economy. It's amazing to think the economy is in constant crisis. For every time we try to cure the problem, the cure is worse. Why do we have central banks? To keep control. Since almost 10 years we have had a crisis. The central bankers told us the solution was to make it easier. Lower interest rates. In Sweden we have negative interest rates! The central banks say they don't know what the future is - which tells us we lost control. The system is there to keep control - but we have lost control - so this will create a lot of change in the future...
09:09: Maybe decentralisation will be even more powerful than central authority. Started 15 years ago with Wikipedia. This was a stupid idea then - but it worked out fine. Today in 253 languages. And the correctness is much higher than old ones. We will see a lot of decentralisation. Everything about using the crowd. In every situation we always know there is someone else smarter - and using the power of everybody will always be greater than our power.
09:07: Remember the nice company Blockbuster? They had in 2004 a revenue of 6bn dollars - based on renting movies. The profit margin was all about late fees. Then came Netflix... just an idea, no money, let's not do retail, just digital. They even offered themselves for sale to Blockbuster... they turned it down. You know what happened... Digitalisation means dematerialisation, demonitisation - and the most interesting - decentralisation...
09:05: Digitalisation means dematerialisation. This isn't only affecting the financial world - it's affecting all industries, all assets. It also means demonitisation. I bet none of your kids own a media cabinet.
09:04: Moore's main message - change will never again be this slow. Since 1965 it's been going faster and faster. If there is one thing to remember from today - we are still in an exponential phase - if you think it's stressy out there, enjoy, because it will never again be this slow...
09:03: Exponential is very hard for us to understand. We think linear. If I tell you I will take 30 steps it's easy for you to predict where I will be in the future. If I could take exponential steps - so every step I have to double the next time - the 30th step would be 26 laps around the globe. That's exponential. This is why we carry smart phones today with processing power greater than Nasa had when they landed on the moon. It's impossible to imagine what exponential means to us which is why it's very hard to understand the future of technology unless you can.
09:00: Kodak is a good way to understand the impact of disruption. Showing a pic of the inventor of the digital camera - a huge thing - working at Kodak. How do you think his boss reacted when he showed him this? He presented the digital camera to the management. Took a picture. Took 23 seconds to record it and 23 seconds to play it back on an old TV set. The management team was unimpressed. Kodak in the 70s was all about quality. This pic was grainy. The point here, he says, is that the inventor said, I understand - but you have to understand that this will be able to compete quality wise in 15 years time. And it took 14 years and 9 months until the invention of the first digital SLR camera. How did he know it would take 15 years? Tech predictions are pretty easy to do if you understand Moore's Law...
08:57: He is moving on to technology. Technology normally starts out bad. Costly. Unimpressive. Then something happens and in the end technologies often show exponential growth. The problem now for a lot of companies and leaders out there - they say they are quite experienced. We have a strategy. We have a long term plan. The problem is that when the disruption happens, the status quo doesn't stay... something that looked so good for so long... we call this the Volkswagen turn... The life of a Christmas pig. All looks great until December when something happens. We will see so many Christmas pigs in the future, because leaders are good at what they do, focus on keeping their business models intact, incorporate new buzzwords, take blockchain into your model, digitalising your old bank... but the business model is the same. That's not innovation or disruption. It's taking the old business model and using technology to make it more efficient.
08:56: When we think about the future we tend to think linear. But the future never looks like that - especially with all this disruption. Everyone wants disruption - but do you think about what it means? It means all today's leaders will not be anymore...
08:55: What you do today will not be needed in 10 years time. So ask yourself, will I be the one to create the new solution - or will I let someone else do it?
08:53: We know in the future change will be faster. 700 out of the 1000 biggest and best companies out there will not be within a 10 year period - eventually if the speed of change continues to increase no one will be able to lead for more than 10 years. We used to talk about the three generation dilemma - wealth never survives three generations - maybe we need to think of it not outlasting 10 years.
08:52: We think that the next generation has to do what we do... If I tell you in the future there will be no cash... you would say it sounds true. If you had said it to your parents 50 years ago they would have thought it was mad.
08:50: The future will be whatever we make of it, he says. Some people in here will do amazing things, others will sit back and watch it happen, kickstart change because of the change. Now referencing Douglas Adams... who said everything here when we are born is natural. We don't talk about agriculture as an amazing technology... but we can still eat because of it. Then everything invented up until you are 35 is very exciting. Everything invented after you are 35 is simply against the natural law... it's something to watch out for! We can learn a lot about the future by thinking about the differences in behaviour between generations...
08:49: Hyttfors goes straight into bitcoin... Says he has heard us talking about it during the past day... Someone, he says, recently transferred 150m dollars in bitcoin. Shows a slide with the letters WTF... which stand for... what's the future?!
08:47: Lights down... Video on digital disruption... What role will blockchain play? How fast is the shift to real-time payments?... Now Ahman is taking to the stage to welcome us all back. Defining a 'futurist' as per Wikipedia... We are just about to find out what one is, she says, welcoming Hyttfors.
08:45: Room filling up. Lots of anticipation about the futurist. We have high hopes as well based on a chat with him when he borrowed our pen...
08:19 Good morning and welcome back to Finextra's live blog at the Swift Nordics Regional Conference 2016 in Oslo. Just setting up here before an 08:45 local time kick-off. Do keep checking in as the day goes on. We have a great agenda today, starting with a motivational speech from futurist Stefan Hyttfors, followed by a session on blockchain - which promises to take us "from hype to real world application".
Chris Skinner of the Financial Services Club will moderate the blockchain panel, and the session speakers will include Vytautas Karalevicius, Spectro Finance, Lasse Meholm, Nordea and Colin Kwan, Magnr.