Welcome to Finextra's live coverage of the SAP Financial Services Forum in London. The theme for this event is 'winning in the digital moment'. The two-day agenda will examine how technologies such as AI, machine learning, analytics, blockchain, open APIs and the cloud can be best leveraged to deliver truly digitised financial services.
18.16: Those futuristic thoughts close day 1 of SAP's Financial Services Forum. Join us again tomorrow for more discussion on where the financial services sector is heading and how we can simplify the customer experience.
18.13: What about 2030? Grattoni says that Intel research of some bright minds from across industries found that intelligent machines will earn control over specific decisions. Trust will reach a tipping point - how does it work with machines controlling decisions? End to end distributed computing will change the interaction with customers, for both B2Bs and B2Cs. Finally, there will be an impact of nature on technology. In terms of financial services, Grattoni poses the possibility that the bank will become a platform, a market place offering a full range of transactional services, FSI compliance, capital financing and loans. Will there be competition, collaboration or cooperation with existing market places such as media companies?
18.03: Looking even further ahead, to 2024, features such as AI, distributed computing, the robot advisor, IoT and fintechs will all continue to drive developments in the digital financial services world. Financial institutions need a handle on what their strategies around these items are.
18.01: Delivering transformative business outcomes is critical. This should be done on demand, be insights driven, part of the smart world, a trusted and connected experience and feature an innovative workforce. Grattoni comments that this is what digital financial services should look like.
17.57: Grattoni touches on a theme of the day, noting that lines of business will not be able to innovate and get a competitive edge if they still run operations on legacy infrastructures. You need to be able to provide new customer experiences. He provides the example of a bank he walked past in Boston (US) where he had to ask himself whether it was a coffee shop or a bank. This turned around the concept of a dying branch, and provided a tremendous customer experience.
17.53: The top of mind issues for boards today are compliance, customer engagement, startups and cyber crime. Grattoni poses the question whether your organisation will be the disrupted or the disruptor. It is a lot more fun to be the disruptor!
17.49: The pace of change is not slowing down! In the past three years items such as the sharing economy, the co-creation model and enhanced lifestyles/augmented realities have changed the way we live and do business. How do you engage with customers as more innovations appear at a fast rate?
17.45: The closing keynote of the day is called The Next Wave of Innovation and Competitive Advantage: 2-5-15 Years Horizons, which is being given by Gerald Grattoni, Head of EMEA Financial Services Solutions at Intel.
17.40: Zimmermann comments that SAP Hybris provides a simplified front office. It is verticalised across fifteen different industries.
17.35: Thinking about a typical consumer journey, they may go from display, paid search and aggregator before getting to the provider for a quote. The complexity of touchpoints can be great, so where does the insurance company focus its media spend? White says you can apply measurement to start understand the value and what consumers are doing. Another challenge is speed - understanding what happened yesterday to apply to your process today. Another part of speed is the executing - if you are two weeks behind in implementing, you are two weeks behind understanding the unengaged customer. Diversity of partners is also vital to target the right customers at the right time.
17.32: Financial services can see other sectors for examples of leading omnichannel experiences. Retail has many examples, with Zimmermann providing an example of Burberry. Tom White then takes the stage and highlights that it is all about timing with insurance - you do not want to be engaging with someone when they are only three months into their home insurance policy.
17.27: A connected business model includes certain key characteristics: personalisation, accuracy, transaprency, data-rich and engagement. This can be leveraged for cross-selling and for new services.
17.22: You need to create wow moments to get Millennials engaged with your organisation. Google suggests that you get about 8 seconds to grab their attention online before they move away to look at something else. How do you do that? You need speed of response of the website, but also you need to provide them with the right information. It is all about understanding the customer. Think of Facebook - that is a company that really knows its participants. After liking 300 things on Facebook, Zimmermann says it knows him more that his wife.
17.19: Trust is key to Millennials, according to Zimmermann. Allowing your interactions with them to be rated and reviewed is a simple step to demonstrating this trust.
17.15: Millennials are on course to play 25,000 hours of video games over the course of their lifetimes. Games designers optimise the experience perfectly for this sector of society. Are your interactions with them as well tailored? Zimmermann points out that they are also overwhelmed with emails, text and chat messages, so Millennials are extremely good at filtering out information. If your message to them is not eye catching, it will be in the trash before it has been read.
17.11: How do you tackle the problem of customer engagement? The common theme is to start with the customer first, their goals and challenges, rather than your internal processes and systems. Millennials are already the largest customer segment out there.
17.04: Moritz Zimmermann and Tom White are up next, to talk about SAP Hybris and engaging the unengaged customer. Zimmermann is Co-Founder Hybris and Senior Vice President Pre-Sales for SAP Hybris; while White is Head of Data Intelligence at iProspect.
16.59: There are three scenarios that Lohmann offers for the financial services of the future. Version 1.1 is where distribution is still driven by human interaction, product development will change through data availability, and risk taking will largely remain as today. Version 2.0 will see fundamental change driven by technology, products are adapted to digital distruption, while risk taking will largely remain as is. Version 3.0 sees distribution becoming fully digital and customised, product development will change to highly adaptive offerings and risk markets will develop to decentral ecosystems. Looking into his crystal ball, Lohmann suggests that the future may well be based somewhere between Version 2.0 and Version 3.0.
16.56: New ideas disseminate because they overcome the advantages of networks, or they do not disseminate because they cannot. Balance sheets with long histories and established relationships are not necessarily simply going to be overrun by new technologies, notes Lohmann. The old ways can still have advantages.
16.47: Talking about insurance, Lohmann questions whether digitalisation in the sector is happening as evolution or revolution. In origination, for example, a lot of new technologies are focussing on the origination of risk. Emerging technologies change the way that insurers are underwriting risk - such as drone technology, GPS for flood risk data, all new ways of assessing risk profiles.
16.44: Thinking of new technologies as just the big disruptors of our industries is missing part of the picture, as there are certain blockages that they face - for example from regulation and compliance. Also, if someone came up with a new, better Facebook today, would it succeed in take up and backing? Sometimes existing industry structures can block this type of progress, notes Lohmann.
16.39: First up, Lohmann asks for a show of hands of people who have seen an insurance broker in the past three years... he estimates around 10% of the audience have said yes to this. Then he offers to implant a chip into the audience to monitor their resting pulse rate to positively benefit their health insurance. Only around seven audience members volunteer for this scenario - but Lohmann then reveals that around 80% of an audience at a university he spoke at would go for this. The world is changing and the move to digitalisation in the insurance industry is happening.
16.35: The next keynote comes from Gerhard Lohmann, Chief Finance Officer at Swiss RE, who will be looking at the economics of the digital marketplace.
16.31: Troo and SAP are collaborating with Apple on an app, which Van Wuijckhuijse will sit on top of the whole end-to-end IT architecture. It is integrated with everything that is integrated in an Apple device. It is fully enterprise grade and benefits from that security. Also, it includes machine learning capabilities to provide sales staff with the correct data and pitch, tailored for specific customers.
16.27: Van Wuijckhuijse says that, for 2016, Troo ranks as the sixth largest insurer in the traditional segment in terms of new business. It is also the first company in the world to have implemented cloud based and end-to-end software solution.
16.23: The Troo IT architecture has a basic layer at the bottom, an end-to-end cloud based solution, in this case SAP S4i on Hanna. The second layer is an e-commerce platform (SAP Hybris). On top of this is the customer facing communication layer, with everything from the internet, mobile, the branch, contact centre, ATM, SMS, social media, email, priniting and broker, for example. Standardisation and speed were two of the big goals that Van Wuijckhuijse had for the project.
16.19: Van Wuijckhuijse comments that insurance companies are on a journey from loss compensation, to loss prevention, to customer care. Customers are savvy about what the market has to offer and can choose the product that suits them best via the connection they want. Insurers need to move from being product-centric to customer centric in order to survive and thrive.
16.15: East-West Bank and Ageas together have created Troo for the Philipines, with the ambition to be the premier bancassurer in the country. Van Wuijckhuijse says they have to deliver exceptional customer service, achieve operational excellence and be the preferred employer in the Philippines in order to attract key talent to run the business. Finally, the company needs to be tech savvy.
16.13: Following the coffee break, we have a keynote presentation from Hans Van Wuijckhuijse, Regional Director Business Development at Ageas. His topic is Cloud - time to exploit the benefits in financial services.
16.10: Here is a recap of the Simplifying IT breakout session, which ran in parallel to the Simplifying Customer Experience session. Discussion focussed on how the industry can resolve the digital dilemma to deliver more with less. The first presentation was given by Susan Volkman, Director at IBM Cloud Managed Services-Europe. Volkman looked at the real value of cloud managed services for businesses in today’s digital world and using cognitive AI to unlock the value of SAP data on the UBM cloud
The challenges for the financial services industry requires digitalisation for institutions to get and stay ahead of the competition and now is the time to embrace this. There are new companies appearing every day and banks need to be aware of this and the implications.
Banks need to make future proof decisions about their future infrastructure requirements, says Volkman. Regulation such as GDPR has to be coped with and moving to cloud based solutions helps to achieve this.
Cloud managed services help clients to manage their infrastructure and applications all in a secure environment. Volkman noted that there are multiple tools and analytics to help gauge the effectiveness of moving to cloud.
Clients have more IT choice on how they operate today and plan to in the future and this can be supported by a flexible stack of services. You can start small and get bigger as you grow and IBM work in partnership with SAP to support this. It is a highly configurable and flexible option.
Volkman summed up by commenting that cloud managed services improve service quality, reduce overheads, it is flexible and helps risk and compliance on a managed and unmanaged basis.
Next to speak was Marc Krabbenborg CIO, GTS at Lloyds Banking Group, who shared his thoughts on electing software packages (COTS) in an agile way. He noted that digitalisation is impacting banks' primary business and involves many complicated steps and functions.It impacts many areas. With this being the case, how do you go about sourcing IT solutions and vendors?
Lloyds Bank decided to improve their GTS capabilities with a new software solution and launched a project. It had two main concerns. The first is whether the technology is truly there? The second is to get buy-in from all sorts of internal departments and yet traditional RFI/RFP solutions are very costly and time consuming.
Overall, the bank asked themselves how all the changes and new software would help to make the best bank for our customers?
The usual RFP/RFI process was not used and instead Lloyds approached three potential suppliers to set up a demo environment and invited them to participate in a twelve week project. Each week, they gave them a series of business requirements and at the end of their outputs were examined to agreed criteria in a two hour session. It was a very open, transparent and supportive process, Krabbenborg noted.
There were multiple tracks of work to look at procurement and pricing, system architecture and implementation plans. Krabbenborg said that you really get to learn a lot about the proposition and the vendors though this intense, collaborative process.
In summary the selection method gives you a quick start, is flexible, helps to validate the technology, gives a true understanding of the solution and is an agile way to simply a complex process.
Finally, there was a case study presentation from Mark Perkins, Project Director at Klarna; and moderator Andy Hirst, VP Banking Solutions at SAP. Andy asked Mark to explain Klarna. It has been around the Nordics for about ten years and high volumes of e-commerce transactions are process through their system gateway. It is expanding in the UK.
Klarna’s focus is all on the customer experience and it is a convenience play and fits well into PSD2. PSD2 is an extension on what we already have and we welcome it, says Perkins.
Machine learning is vital to the business as Klarna make credit decision in real-time and technology has to drive this. It is the way the company will grow with a low costs base.
Having applied for a banking licence in the UK it is a challenging and exciting time, according to Perkins. He notes it will be interesting to see how fintechs move into banking as opposed to the other way round. Investment into Klarna has come from many sources and Visa has just invested in the company.
Hirst asks how Klarna maintains its momentum. Perkins’ response focused on knowing and sticking to its core strengths in terms of geography and product, continuing to use agile technology in a non-legacy environment.
15.30: That concludes this breakout stream, but check out the Finextra live blog tomorrow as the Simplifying Customer Experience stream will return then.
15.29: Sarkar says that the bank has key pillars to support successful customer adoption, which are important to follow in order to ensure that the customer is front and centre of the product offerings. He also notes that back end systems cannot continue to be legacy based. If you do not sort this out, you cannot move forward.
15.25: The final stage of the digitisation includes the first voice based virtual assistant in the MENA region, called EVA. Next week, the bank is launching online banking with video chat, featuring personalisation and online advice for the customer. The bank also acts as a aggregator on SkyShopper, a site that pulls together offers and booking opportunities exclusively for its customers.
15.21: The third level, which has been a focus for the past three years, has been moving to sales and service. Branches are equipped with iPads specifically for this reason. There is a 360 degree customer view available to branch staff using big data, in coordination with SAP. Also, simply redesigning the bank's website increased customer engagement. They even have a Fitness Savings Account which, via an Apple watch app, provides financial benefits to the account if the customer hits their steps goal.
15.17: Sarkar begins by commenting that banks need to digitise, given the competitive environment in the financial services sector today. Emirates NBD fixed the basics of its digital approach within the first two years, and then moved on to a second level work. This included launching 60 second remittance (DirectRemit) and P2P transfers (mePay). DirectRemit is a loss leader for the bank.
15.14: Finally for this stream, we have Suvo Sarkar, Senior Executive Vice President & Group Head - Retail Banking & Wealth Management at Emirates NBD. Sarkar’s theme is ‘What Good Digital Looks Like, Emirates NBD - A Case Study’.
15.12: HSBC SmartSave is an example of how a bank can innovate with a fintech and the regulator. It is a microsavings app that was jointly designed by Pariti. It was developed with the FCA's regulatory sandbox.
15.09: Threats also give way to opportunities, however. For example, HSBC is investing US$2.1bn on digital transformation globally. It is designing digitally-led propositions that are fully centred around the customer.
15.05: Banks and credit card companies in China are largely faceless, purely existing to pay for people's WeChat wallets, says Wang. This chimes with a Bill Gates quote from 1990 - "Banking is necessary, banks are not." Banks face threats on three levels - existential threats, particularly in the face of PSD2 and Open Banking; customer relationship erosion; and margin and revenue compression.
15.01: Next up, in a talk called ‘Open, and Forward’ is Lareina Wang, Head of Innovation and Partnerships at HSBC UK RBWM. If financial services providers are to survive, they need to open up. Trips back to China have really surprised Wang in terms of how quickly the way people pay has moved on. There is 72% smartphone penetration in China.
14.58: In closing, Dietz says that you cannot out-innovate fintechs, so working with them is a path to success. Understanding customer journeys is essential, as is customer centricity - doing this allows you to shape products that can be truly popular. He also notes that you need a unified platform to truly be successful.
14.52: Fintechs are necessary, not an enemy, says Dietz. They can deliver and should be embraced by the traditional insurance companies. In addition, disruptors from other industries have arrived in the financial services industry. Travel providers can use the data they have to provide tailered insurance policies. They also have cheap and innovative products - including one that directly translates as 'Watch Football Drink Beer and Fall Over'. This product insures the policy holder for a certain amount of their hospital bills if this scenario plays out. This is one fun example of how agile the disruptors can be.
14.48: Trov are mentioned as a company in the insurance space that are new, agile and digital. They provide on-demand insurance in the UK and Australia and are launching in the US this year. Lemonade is also highlighted - with a slogan 'instant everything, killer prices, big heart'. They are also completely digital, offering user experience at its best. Disruption is here in the insurance market and it is bigger than expected, notes Dietz.
14.43: Companies, now matter how large they are, can disappear. Dietz says that there are things to note for companies that do not want to disappear - the first of which is their customer centricity, Being able to be that flexible and responsive is hard if you are an established organisation with a legacy system, however. Dietz says that companies need to find a way to adapt their old systems for the new world.
14.40: The Forum now splits in to three streams dedicated to customer experience, finance, and IT. We will be live from the Simplifying Customer Experience stream, as well as provide highlights from elsewhere.
For the next hour, the Simplifying Customer Experience stream will be exploring how companies respond in the digital moment, from reactive to proactive responsiveness to customer needs. Our workstream moderator is Jonathan Charley, Deputy General Manager FS EMEA with SAP. First we will be hearing from Martin Dietz a Member of the Global Board of ConVista Consulting. His theme is ‘Digital Disruption and How to Stay Relevant’.
14.34: For payments and settlement, everyone has to be on blockchain or you need to run parallel processes behind it, notes Says. This could be a blockage to it being used succesfully in this area. He does say that the most logical use of blockchain in financial services is in the back office. Moran also notes that it is a question of culture and the ability to work in an agile way.
14.31: The core of banks in risk and compliance are a long way away from understanding the implications of technologies such as blockchain, says Moran. Bank of Ireland has found a way to save time and cost in an HR process by 75% by implementing a new technology, but they had to bring people out of retirement that understood their old process in order to make the change.
14.26: Banks are increasingly building new experiences that add value to the overall banking experiences. These may be revenue neutral or revenue negative, but are necessary to retain overall customer loyalty, notes Moran.
With PSD2, and Open Banking in the UK, Says notes that this is a great positive for the industry - both the incumbents and the customer. There will be winners and losers, but it is hard to predict how customers will react when faced with so many variables. Those that win will be those banks that are trusted.
14.20: Says notes that many customers feel that banks are trying to trip them up, whereas the approach of his bank is to help the customers and understand what stage they are at in the year, in their life, and to offer them products at the correct time. They can also utilise data to benefit customers. He uses an example of a customer who feels trapped in a rolling overdraft, where banks can use the data available to alert the customer that they have spent £600 at a popular coffee chain that year so far - halving that would have meant they were not in their overdraft. Moran adds that the value is alerting customers in the shop that they have a big payment coming out of their account shortly and buying a large coffee and a pastrie could mean that they can't then afford the big payment.
14.17: There are parts of the banking business that fintechs would not want to touch, when you think about the high level of compliance and penalties. Fintech is the greatest productivity tool that banks have ever known, Moran says, but the key is to get the integration between the two correct.
14.14: Says comments that he's more worried about companies such as Alipay and Apple taking over the world, and that they are the main competition for the banks - rather than the fintechs. It is all about data. Moran agrees, saying that banks sit on large pools of data but aren't really scratching the surface of it, while fintechs can do amazing things with data but do not have the customer scale to do very much with this. There is a natural synergy between the two.
14.10: It is always funny when banks take a piece of new technology and try and plug it in to their company because it is the latest thing, says Moran. The focus should always be on the customer need, and whether this technology can address that need.
13.55: We are a few minutes away from the keynote that is kicking things off for this afternoon. This will be presented by Margaret Doyle, Head of Financial Services Research at Deloitte; Stephen Moran, Head of Research with Bank of Ireland; and Michael Says, CEO of an anonymous (for the purpose of this conversation) new challenger bank. The topic looks like it will be very popular with the attendees, as the theme of it is ‘From Buzzword to Benefits: Driving Tangible Value From Fintech, Blockchain and Big Data’.
12.31: Identifying a business problem first, and then understand how and where AI could help provide a solution, is a good first step on a company's AI journey, says Chakraborty. It is important to make the AI process very transparent. With AI, great opportunity presents even greater opportunity. The formula for AI business value is Human x Process x Data, concludes Chakraborty.
That is all for this morning's content, but there is lots still to come after the lunch break. We will be back at 2pm.
12.29: Do you have a high AI quotient? Chakraborty says that Accenture found just 17% of companies are collaborative inventors - using AI to transform their core business. When applying a company's AI quotient, companies need to consider technology (amplifying skills of the workforce), data (partnering with companies to monetise data), and people (reskilling the workforce to stay ahead of the automation curve).
12.25: The power of natural language processing can replicate interpretation and extraction of information for processing investment reports, Chakraborty says. This can help augment the report and provide deeper analysis. Machine learning can also benefit AML efforts, reducing false positives and manual efforts. The AI can perform link analysis between people and companies, for example, looking at the people involved, the value of transaction, the location of the parties involved in the transaction, etc.
12.20: Chakraborty talks about a virtual mortgage advisor, and how that can transform the customer experience by providing more than just the standard answers that a customer would find in the FAQs. By taking the information input by the customer, the AI can make recommendations and provide different options to the customer to provide specific information, allowing them to learn from this. If the customer still does not seem to be understandning the products that are available, the AI can then transfer this conversation to a human advisor.
12.17: There are three growth accelerators to AI, intelligent automation, labour and capital augmentation, and innovation diffusion. Accenture is focussed on text analytics, deep learning, robotics, virtual agents, video analytics and unique identity technologies, says Chakraborty.
12.13: The special part about AI is that it is not a single bullet, says Chakraborty. It can sense data, comprehend it and then act and learn from this data. AI is the new user interface. Machine learning is becoming a key component of customer engagement. User interfaces need to be simple and smart to succeed.
12.10: Artificial intelligence is all around us today, from being in Amazon Echo, Spotify and Netflix, through to investment managers and LInkedIn. It is not new, says Chakraborty, but it is now real, scalable and robust. AI equity funding since 2012 is around US$14.9bn.
12.06: Our next keynote presentation is going to be given by Arnab Chakraborty, Managing Director, Accenture Analytics Business lead for ASG. The theme for this presentation is Making Sense of Cognitive, with Chakraborty providing an outlook for AI and machine learning in financial services.
12.01: A question from the floor asks how Discovery has got big data right, as this is regularly a challenge in financial services. Van Niekerk says that as a company it has grown organically rather than through acquisition, which is where many complexities can arise with big data.
11.58: The brand ambassadors for Vitality in South Africa are Olympic gold medallists Wayde van Niekerk and Chad le Clos, who provide an inspiration and human face to the technology that Discovery Vitality use.
11.54: A video plays featuring a Vitality customer, who has been through the wellness programme. He explains how he went from the couch to now having logged well of 3000km of running training and races.
The company has also developed a healthy food switch app, that allows shoppers to scan the barcode of any item in the grocery store and see healthier recommendations. The data for this is crowdsourced, with members adding the health content of products if they cannot already find it in the app database. In the future this will move into the augmented reality space.
11.48: Vitality and VitalityDrive also create value by improving cross-selling and retention. Clients are unlikely to lapse once they are part of the programme as they can see its demonstratable value, says Van Niekerk.
11.44: Van Niekerk says that the social element of the active app is also highly motivational - you can see how your friends are doing if you connect with them, which can really encourage competition. The goal completion rate is much higher with the more friends you add. The active rewards component of Vitality is particularly effective at driving engagement and reducing mortality risk.
11.40: Vitality takes a similar approach to wellness, with a tiered rewards programme based on Vitality points. This cycle was traditionally over a year, but Vitality active rewards now cycle weekly. Participants receive an Apple watch upfront. Participants set an activity goal and unlock rewards when they hit them. If you hit your goals for four weeks, you do not have to pay anything towards your Apple watch, for example.There is also a 'move to give' mode, so it is possible for participants to give charitably by exercising.
11.36: VitalityDrive provides a behavioural solution to risky drivers, says Van Niekerk. A smartphone-enabled DQ-track helps encourage better driving by tracking how the insured driver performs at the wheel - are they cornering too harshly, are they braking too sharply? Improving the drivers means there are fewer insurance claims needed to be made, which in turn benefits society. The drivers themselves can receive rewards for good driving detected by the tracker, including money off fuel next time they need to fill up.
11.32: There is a growing expectation for companies to be socially responsible, which is at the heart of the Vitality offering. Vitality uses behavioural economic principles to incentivise behaviour in key areas of health, such as physical inactivity, poor nutrition and smoking. The organsiation then provides access to partners that lower the barriers to healthy choices and incentivises ongoing engagement.
11.27: Vitality's first device integration was back in 2008, when it introduced a step tracker. The users would go into a pharmacy, the results would be faxed off... it was not the most efficient method back then but almost a decade ago it was the first step on the road. Today the company has a Vitality Device Platform which services markets globally.
11.21: Discovery Vitality has health insurance, life insurance, motor insurance, card and investment organisations in South Africa, as well as businesses around the world, while they also outsource their technology. Their purpose is to make people healthier and protect their lives. Van Niekerk explains how four behaviours lead to four non-communicable diseases, which are responsible for 60% of deaths worldwide. What his company has found is that wearable devices are becoming pervasive, while the internet of things (IoT) allows the business to track and segment risk and reward behaviour change - for example through fitness devices, telemedicines and telematics.
11.18: The keynote presentation following the refreshment break is called Shared Value Insurance - digitally re-imagined. This will be delivered by Joe Van Niekerk, Chief Information Officer from Discovery Vitality.
10.47: Doing a transformation as big and as fast as HSBC's HR technology project has been would have been impossible with the old team and investment strategy, says Jarratt. Giving the staff power to say what they need, and creating innovation for the whole bank rather than just for one segment, have been real benefits from the project.
Now it is time for a short networking break.
10.44: HSBC has a university for internal learning. The focus is on making regulatory and mandatory training as efficient as possible so that it does not take up all of the time, freeing up time for line management training.
10.40: There is real motivation for change, says Jarratt. Moving to work with a software-as-a-service (SaaS) provider is key, why would the bank build its own HR system? It is very difficult to move a quarter of a million people to any new platform, but the benefits at the end of this unlock the innovation potential of the bank.
10.32: Some of the people that work for highly innovative companies like the challenge of trying to fix a big traditional bank as it will make their name, suggests Adams. Integrating these individuals requires a different way of thinking in order to keep an innovative tension.
10.28: What does agile mean for a bank the scale of HSBC? Adams says this goes back to thinking of things in a different way from the usual sequencial process. This brings together people in a different way with different expectations, allowing the bank to change and have an innovative way of addressing challenges. Core skills do not disappear, but you should add to them.
10.24: Adams reflects that the starting point for any exectuive team is to understand the threats and opportunities that technology offers.Once the executive is engaged, go to the next level and engage all function partners in the bank.
10.21: Now it is time for a Q&A discussion with SAP and HSBC. The theme for this session is ‘The Human Element: The Key to Successful Digital Transformation’. The panelists for this are Rob Hetherington, Global General Manager, Financial Services Industries at SAP; Georgina Jarratt, Managing Director, Head of Transformation with HSBC; and Mark Adams, Head of Human Resources at HSBC UK.
10.20: Solving today's problems is not enough, Leadbetter concludes. Finance is not safe from external disruption factors, and so a fundamental shift in the internal business model is required.
10.14: What can big companies do to adapt? First the mindset of the organisation has to change and diversity has to be implemented. Leadbetter suggests one of the best ideas you could have would be to hire a black ops team that will attempt to take down your company. They will address what they would target to attack - it is better to have this happening under your own roof so you know what to address. Leadbetter also suggests that interaction with an exponential organisation - either working with a fintech, partnering or aquiring one - is another key way to adapt.
10.11: Exponential organisations punch far above their weight. These include companies such as Amazon, Google and Apple. These types of companies do three differently - they have a Massive Transformation Purpose (MTP), they have external attributes that enable them to be small and nimble.
10.06: Do not take the deceptive phase of fintech development for granted, warns Leadbetter. While some new technologies may look disappointing or non-threatening today, with the doubling mentioned earlier these could still come and "eat the lunch" of financial institutions tomorrow.
10.01: Half of the Fortune 500 companies from 2000 have disappeared due to digitalisation. Leadbetter provides examples of how some financial organisations are investing internally to try to get to grips with the new reality. But today Amazon is planning to build giant 'beehives' for delivery drones to take off and land. Leadbetter suggests that companies such as Amazon know far more about financial services customers than the FIs do themselves. That is where the the challenge lies.
9.56: Price performance of technology doubles every two or three years, explains Leadbetter. Technologies where you can see this 'doubling' today include 3D printing, AI, digital medicine, nanotechnology, robotics and synthentic biology. This means that the C-Suite needs to examine and understand what these technologies mean to their business, says Leadbetter. 75% of senior management that visit Singularity Universtiy have little or no awareness of the breakthroughs that could affect their industry.
9.52: Leadbetter reflects on when he used to work for large media organisations in the past. These companies would plan a year or two ahead, and be completely averse to risk. He suggests that today it is vital that organisations look a lot further ahead, and to reevaluate their attitudes to risk.
9.46: Next up is today’s opening keynote. This is being presented by Michael Leadbetter, Adjunct Faculty at Singularity University, and is titled ‘Financial Services 2030’.
9.42: Winning in the digital moment is the theme of the event. Leyden says this is not just about automation, it is fundementally shifting the balance so that the focus is on the customer. We will be looking at how companies have reimagined their business models, what digitalisation means in practice, and the effect that disruptive technologies are having on the financial sector.
9.35: Leyden says the event will not only be looking at the future of digitisation, but will be doing so in a way that is real and practical for various industry segments. We will be focussing on how financial institutions can utilise digitalisation to simplify the customer experience.
9.25: Hello and welcome to the Grange St Paul's Hotel in London for Finextra's live coverage of the first day of the SAP Financial Services Forum 2017. Delegates are starting to pour into the plenary room in anticipation of the introduction from Laurence Leyden, EMEA General Manager, Financial Services at SAP, which will get us underway in a few minutes.