Objectives and Benefits, as told by Lakshmanan Sankaran to Ravi Mehta

[LC VIEWS Newsletter N0.77; December 2006]

(To see his bio click Who’s Who in LC World)

COMMERCIAL BANK OF DUBAI - HEADQUARTERS

Capitalizing on SIBOS ideas for its ambition of continuous success in banking

Laxman travels from U.A.E. to Australia to get SIBOS ideas

for his bank to process them into profit

Lakshmanan Sankaran (Laxman) grabbing the
Sibos benefits for his employer-bank

Sibos participation has opened new windows of opportunity for our organization; having seen first hand some of the latest technologies and trends, we will now incorporate some of these ideas into our strategy and prepare plans to implement them over the next year, either on our own or in partnership with our Correspondents

Our Chitchat on SIBOS

Ravi: You have attended SIBOS at Sydney. We are tempted to know the objectives of SIBOS? Could you please tell us?

Laxman: I begin my answer with brief introduction to SWIFT. SWIFT is the industry-owned (Banks and TT Club) co-operative supplying secure, standardized messaging services and interface software to over 7,800 financial institutions in more than 200 countries. The SWIFT community includes banks, broker/dealers and investment managers, as well as their market infrastructures in payments, securities, treasury and trade. Over the past ten years, SWIFT message prices have been reduced over 70%, and system availability approaches 5x9’s reliability — 99.999% of uptime

Regarding Sibos, it is the world's premier financial services event, attracting the industry's leading figures and firms. It is where networking and doing business are at the top of the agenda.

Sibos brings to the fore issues that are challenging the financial services industry, now and in the future — new technologies, new processes, new client expectations, new and unexpected alliances and ever-growing pressures for greater efficiency and security.

Laxman - I would mention the twin objectives of going to Sibos is the ample opportunity you have to network with almost all the leading banks, application and middleware vendors, system integrators, consultants and the exposure to future developments and technology.

Ravi: What new you learned from the Sydney SIBOS?

Laxman: The Sibos learning experience was very good and some of the important topics mentioned below were explained and discussed in detail by distinguished speakers and panelists.

 SEPA – Single European Payments Area

 Corporates joining Swift with open access

 BRIC Countries esp. China and India

 Open Account Trade and Supply Chain Financing

 SWIFTNet Trade Services Utility (TSU)

 Remittances - opportunities for creating new business

Ravi: How your participation in the Sydney SIBOS could be helpful to you, your department and your bank?

Laxman: Sibos participation has opened new windows of opportunity for our organization; having seen first hand some of the latest technologies and trends, we will now incorporate some of these ideas into our strategy and prepare plans to implement them over the next year, either on our own or in partnership with our Correspondents.

Ravi: After participation what you feel: is SIBOS really useful and necessary or wasteful and dispensable?

Laxman: My view after attending Sibos for the first time is that it is an extremely useful event and very useful for all Bankers involved in Securities, Sales, Strategy, Cash Management, Trade Services, Payments, Operations, FX/MM, IT/Technology, Derivatives, Business Development.

I quote the Chairman and the CEO of Swift below –

To accelerate the momentum, Yawar Shah, Chairman of Swift identified five essential factors going forward: clear, quantifiable progress against the stated goals and milestones in SWIFT2010; increasing SWIFT offerings and capabilities to make financial institutions more profitable; decreasing prices from SWIFT; reduced end-to-end costs for financial institutions; and improved risk management across bank operations. “That in a nutshell,” said Shah, “is the basic DNA of SWIFT”.

Schrank, CEO of Swift, noted that SWIFT’s company indicators this year were “off the scale.” Soaring pre-tax profits, strong revenues, traffic growth, and a rebounding of securities traffic have allowed SWIFT to offer a combination of investment, free hardware security modules and rebates. Schrank reiterated the four strategic thrusts for SWIFT that encapsulate the SWIFT2010 strategy: grow in developing countries; grow in corporate reach; grow in Europe; and grow in securities and alternative investments.

Ravi: How SIBOS present information to the audience? Do you like the presentation methodology?

Laxman: Sibos has Opening and Closing Plenary; in between, during the Conference week, a number of industry bodies hold a range of 'Special Interest Sessions', capitalizing on the seniority and expertise of the industry leaders brought together by Sibos. Over the years, these sessions have identified issues and addressed concerns that prepare the ground for the industry to collectively agree and develop solutions.

Opening Plenary

Delegates heard from David Morgan, CEO of Westpac and chairman of the Australian Bankers Association about the challenges and opportunities of raising ambitions for banks’ role in the payment business, while Yawar Shah and Leonard Schrank, respectively Chairman and CEO of SWIFT, outlined how the co-operative itself was planning to raise its ambition in responding to the community demands for it to do more.

In a break from the tradition of closing speeches, SWIFT CEO, Leonard H. Schrank invited a panel on stage to give their reactions to the key themes of the Sibos week. Mark Hodgkinson , General Manager of Shell Group Treasury Operations in Asia Pacific and Subramanian Ramadori, CEO and Managing Director, Tata Consultancy Services were joined on stage by two SWIFT Board members, Jacques-Philippe Marson, CEO, BNP Paribas Securities Services and Lynn Mathews, Chairman of the Australian National Member Group and Asia Pacific and Latin American Representative of CLS Services, Australia.

Mathews was most struck by the number of calls for collaboration heard throughout the week as well as the numbers participating in the Standards Forum. As a corporate, Hodgkinson admitted that he initially found the experience of being

surrounded by so many financial service providers a little overwhelming and that he was keen to “get beneath the skin” of the SWIFT community.

Having just flown in a few hours prior to the session, Ramadorai had nevertheless had time to visit the Tata stand and stroll around the exhibition floor. He was struck by the diversity of institutions represented and observed that “What we can achieve together is a most powerful theme.”

Ravi: What do you think - is SWIFT successful in achieving its SIBOS objectives?

Laxman: The theme of SIBOS 2006 at Sydney was “Raising Ambitions”

I’m of the view that Swift was able to make substantial progress on its key stated objective of “Exploring tomorrow's issues — today”. This was amply demonstrated by the topics for discussion and the quality and outcome of various focus sessions. Capitalizing on the seniority and expertise of the industry leaders brought together by Sibos, a number of industry bodies held a range of 'Special Interest Sessions'. Over the years, these sessions have identified issues and addressed concerns that prepare the ground for the industry to collectively agree and develop solutions.

Some of the key issues covered this year at Sibos included,

- Maximizing CLS

- Risk: disasters, terrorism, epidemics, fraud

- Credit risk, market risk and liquidity management - finding the right balance between risk management and asset optimization?

- Payments transformation - the challenges are here, the timetable is now

Ravi: HOW swift is SWIFT in banking transactions?

Laxman:– As I mentioned previously, SWIFT supplies secure, standardized messaging services and interface software to over 7,800 financial institutions in more than 200 countries and the system availability approaches 5x9’s reliability — 99.999% of uptime. This speaks volumes about Swift efficiency and the enormous reliability banks have on Swift.

Ravi: Are SIBOS an opportunity for addressing the practical problems the banks face in SWIFT work?

Laxman: I am not sure and I don’t think that Sibos is the right forum for individual banks to raise /address practical problems. This is done directly with Swift user support. And I would rate Swift very high in responding to issues raised by member users and resolving them.

Ravi: Do SIBOS discuss what the SWIFT wants or what the audience wants?

Laxman: It is kind of both; rather I think Swift acts as a facilitator and coordinator and brings to fore issues that are of strategic importance to the members and the financial community. The issues are then discussed in great details by groups of highly experienced and qualified people. The conclusions are built into Swift’s future plans.

Ravi: Do bankers from low-income countries participate in SIBOS? Has SWIFT ever held SIBOS in low-income countries? Are SIBOS easily accessible, easily affordable and cost-effective?

Laxman : I saw Bankers from developed as well as developing countries actively participating in Sibos and some of them were panelists.

I can only remember the previous Sibos as far as Sydney (2006), Copenhagen (2005), Atlanta (2004), and Singapore (2003). Obviously, all these venues are in developed countries. Sibos 2007 is scheduled to be held in Boston, USA and in Vienna in 2008.

Attending / participating in Sibos is definitely not cheap; the conference registration fees alone is EUR 2800, plus the travel and the hotel expenses for a week. But one needs to evaluate the costs in relations to the benefits in the near and long term. I feel it is surely worth it.

The views expressed in this interview are the interviewee’s personal views and do not represent the official views of his organization, Commercial Bank of Dubai.

Laxman can be reached at laxman56@gmail.com