In his introduction of the day 2 keynote speaker, AMF Ventures' founder Tony Fish, SWIFT's Leo Punt noted that last year Fish had taken a sabbatical and read 52 books. Being so well read, it was no surprise that he had several fresh angles to get the delegates thinking about what the direction of travel should be for their organisations with all the transformations currently taking place in the industry that were touched on yesterday.

"I rejoice in being a pioneer, in going to unmapped lands," Fish stated, noting that financial services is heading into the unknown right now.

Thinking about the future of money, Fish said that it offered two important things for the SOFE 2019 attendees. The first is the implication it has for operations and engineering, which is, do it faster, do it quicker and do it cheaper. There are also implications for the characteristics of money - as money becomes digital, its characteristics now include accountability and responsibility - you can't hide from data, it call all be tracked all the way through. Also there is more humanity, you have got to put people back in the equation and spend money humanely. A third new characteristic of money is its programmability. "I can now programme money. I see somebody who needs some money, I can give them some money but I only want them to spend it on food - that money can now only be spent on food," Fish explained.

It is possible to see all of these new characteristics of money, enabled by the move to digitisation, represented in many headlines throughout the broadsheet newspapers. Fish suggested that delegates look at the story headline and consider if there is an implication that they could become more accountable, more responsible, more human or if they can programme something as a result of what they've read. One headline he picked out was "It's My Pleasure - Or Not: Alexa to reply in the right tone of voice" - this only comes because people have given data. The data is in there and actually machines are now responding to your human life. Another headline he selected was around supermarkets still using a lot of plastic despite the public pledges to move away from the material. The accountability and responsibility to the directors of those supermarkets is coming through because we have the data. The same is happening in money, Fish said.

There is a cyclical nature to business that Fish described, whereby the innovative and creative side creates new products and solutions, but can also spend too much money, which is when the finance and legal teams come in an put severe spending caps in place. After some more time, the lack of spending creates a need for fresh innovation and creativity, and it all begins again. Fish said he thought that in 2019 there is a general feeling that companies are too finance-led, which is great news for people working in innovative areas of businesses, such as in operations and engineers, much like many of the delegates at SOFE 2019.

Fish recalled former Nokia chief executive Stephen Elop’s 2011 memo to the company's stakeholders where he said Nokia was standing on a “burning platform” that was alight, no time was left as they had not reacted and there was now desperation to do something unthinkable - right there and then; no choice remained. Fish made the point that, while this was transparent, it was too late. Why had nobody in the company noticed the smell of burning rising up from around their feet in the months or years previously? In order for other companies to avoid this fate, mapping is crucial, particularly during the transformative change that financial services is currently undergoing.

Larry Fink, the chief executive of BlackRock writes a Christmas letter to shareholders and investing companies every year, and Fish flagged up the past two, from 2017 and 2018, to highlight how the business world is changing. In 2017, the first big message to the market essentially said that if a board came to BlackRock to ask it to carry on supporting the business with funding, but presented a plan that shows underlying growth of 3-7% as a linear growth over the next 10 years, Fink would not back this. The reasoning he gave for that is that is everyone has presented this for the past 20 years, and everybody has failed to do it. This was followed up with the second big message for business in the 2018 Christmas letter, where Fink wrote that organisations needed to demonstrate to him and his teams that they had a purpose for existing. "'Purpose' coming back into the words of the most powerful people in the world doing capitalism, that's big," noted Fish.

It is not just BlackRock thinking that way either. Fish noted that Business Roundtable, a US-based non-profit who's members are exclusively CEOs, interviews all of its members one on one once a year. Since 1978, the group has said that the reason for their business existing is to deliver shareholder value. This year, Fish said that to most people's surprise, this had now changed to a position that stated the purpose of the business is to create a sustainable ecosystem. As with Fink, this marks a stark change in business thinking and highlights the direction that organisations should be travelling in.

Referring back to all the books he had chance to read while on sabbatical, Fish mentioned one from Brad Smith, president and chief legal officer of Microsoft, called Tools and Weapons. This again highlights the importance of thinking about purpose - if you take a knife, you can eat food with it but you can also kill somebody with it. If you can take a pen, you can write and create the best pieces of music and art, but you can also stab somebody with it. In software terms, firms can either build a tool or a weapon - but how does a company ensure that what they are building is a tool? The book covers how to get those principles and governance into the organisation in writing.

Ben Horowitz, co-founder of the venture capital firm Andreessen Horowitz, wrote What You Do Is Who You Are. This book addresses culture, and getting the culture right in the organisation. Culture, along with purpose, was something that went out of fashion when finance began dictating that everything must be faster, quicker, cheaper. Fish made the point that when you have the chief executive of BlackRock, the president of Microsoft and a hugely successful venture capitalist all stressing the importance of purpose and culture, corporate governance is going to change beyond belief.

An issue that many firms face, Fish commented, is that those in senior management and at board level do not understand data. This leads to incredibly naive decisions coming from boards to do with ethical morality about data. "You can't allocate blame, they actually don't have the experience," Fish said. "Boards have to grow up and start to learn data."

On the flip side, much to their frustration, can be people who have got enormous capability and time in this field that then are not given the availability to make the complex decisions. They are not involved in the decision making, and so they end up micromanaging and basically in the wrong place for their firm. Fish said that these people in this situation can be incredibly disruptive.

What financial services organisations need to be able to do is identify what they need to do to improve that capability to understand ethically complex decision-making. "It's the skill that humans have, and it's where we have to be right now, with data and digital services going forward," Fish concluded.

Future platforms

The afternoon of day 2 at SOFE 2019 saw a customer-focused plenary panel, discussing how the financial services can deliver the technology platforms of the future. SWIFT's head of Technical Sales and AMH services - EMEA, Alain Drese, moderated the discussion, which featured Julien Marçais, Group SWIFT CISO/IT risk officer at BNP Paribas; François-Xavier Clair, head of Digital & Security Solutions, Payments & Cash Management at Societe Generale; and Stephen Lindsay, head of Standards, SWIFT.

The role of the cloud in finance was the first topic in the spotlight. An audience poll asking who the delegates' preferred cloud provider is uncovered that almost half (49%) don't yet have a strategy for this. For those that do, Microsoft just edged the individual preference for 14% of attendees, just ahead of Google (10%) and AWS (9%). Eighteen percent of delegates selected 'All three'.

Marçais commented that cloud strategy depends on the context. For example, in France there are quite strict regulations around public cloud, so his organisation couldn't put all its operations on public cloud, even if they wanted to.

When it comes to the top three driving forces behind public cloud strategy, 70% of the organisations in the room identified speed/agility/flexibility as critical. Clair agreed that flexibility is key being able to implement business on-demand solutions. Other important drivers were that it simplifies management (44%), enables innovation (31%), and reduces overall capital expenditure (29%). Security was the least popular option in the poll, only resonating with 27% of the audience.

Speaking of security, Marçais noted that the biggest risk when thinking about working with cloud providers is how institutions can handle the security of their data when it is put on the cloud. He said that regulation in this area is very important, but that we need to remember that just as banks are new to the cloud, so are the regulators themselves.

Conversation turned to APIs, in particular the lack of standardisation that currently exists in the API world. With reference to the implementation of PSD2, SWIFT's Lindsay commented that a point of the regulation was to bring harmony to payments, something that isn't happening if everyone is building their own, subtly different, APIs. Broadening the point out to a global scale, he said that standardisation is lacking. This needs to be improved if the benefits of open banking are to gain traction.

For Marçais, SWIFT gpi was a way for his institution to think differently and build new solutions with a central API hub. He added that an additional benefit of this was that this new setup is something that can be reused for other API projects further down the road.

The topic of ISO 20022 and the impending migration to that standard by the global payments industry was also discussed. Bearing in mind that the initial migration deadline is November 2021, an audience poll asked whether the attending institutions had begun ISO 20022 analysis in their organisations. Reassuringly, more than four out of every five (81%) have.

"It is a quite a journey," Marçais said. "Everyone is concerned, and basically that's the first step of the advisement - to make sure that everyone who will be impacted is aware of the change. A lot of people don't even think that the ISO 20022 migration affects them as well. Some compliance people maybe are not thinking about it, but if they don't change their business model they won't be able to read what I'm sending them."

Lindsay made the point that the migration is fundamentally about data, the granularity, the quality and the quantity of the data. He said it is a mistake to focus on the messaging piece or get bogged down in the format specifics. What is important is that institutions are going to be exchanging much richer and more granular data. In order to be able to do that, they have to capture it in their channels, to capture it in databases, that is really where the effort. Without the data aspect being front and centre, the benefit of doing this is lost. ISO 20022 will greatly help improve STP and automation in financial services.

SOFE 2019 in Amsterdam hit the brief of its overall theme - Managing Transformation. The selection of speakers over the two days outlined the huge transformations that are taking place across the financial services sector, and then provided delegates with ideas and practical suggestions as to how their institutions can adjust to these step changes in a way that puts them on a competitive footing for the future. It will be interesting to see what strides the community will have made in this regard at next year's event, which will be held in Vienna.