Sibos 2019 Recap: The Impact of Digital Wallets Around the Globe

Posted by Modo on Sep 26, 2019 5:00:00 PM

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The Modonauts headed to London for Sibos 2019, and came back with loads of insights from the sessions and attendees that we wanted to share with you! (As #paymentsgeeks we can’t help but share about payments)  

We were happy to have Modo CEO, Bruce Parker, join Deutsche Bank’s Rick Striano on stage in the Discover Zone to discuss the impacts of digital wallets around the globe. Modo is connecting Deustche Bank to eWallets such as Alipay, PayPal, and WeChat. 

The Modonauts also enjoyed listening to Deutsche Bank CEO, Christian Sewing, who gave a keynote on his views of the future of the banking industry.

Watch the full keynote:

If you don't have 30 minutes, but want to hear Modo's shout outs go to:
21:18 - 21:40 & 24:42

We’ve outlined our favorite parts of the session below:  

He began the session by explaining his concerns with the shifting powers in the global economy:

“The global balance of power is clearing shifting. The race between the US and China is in full swing about trade but especially over technology. This fallout means Europe risks losing further ground if we do not seize the opportunity offered by digitization. Deutsche Bank economists as well as, for instance, McKinsey economists expect an enormous first mover advantage in technology. They actually estimate it will be worth at least about $15 trillion over the next 5 years. This gain will accrue mainly to the US and China and not to Europe.”

“[European countries] simply aren’t that interesting anymore for many investors and companies. And we must be alarmed that Norway’s Sovereign Wealth Fund, the largest in the world, is considering switching large amounts of money into US equities because the growth prospects there are so much better than they are in Europe. All of this demonstrates that if we don’t want to lose our relevance we have to act fast but also decisively.”

Sewing continued by offering 5 crucial priorities for Europe to regain their global position: 

Five Main Key Priorities for Europe:

  1. “We need, finally, more Europe. We need a single European market that deserves its name… It requires a real single market. Not a collection of 27 or 28 separate markets with different regulation, insolvency schemes, and labor laws.” 
  2. “Europe needs to become a more attractive business location. There is a global trend to lower corporate taxes, which we have to address.” 
  3. “Europe must become more attractive again for the best talent. We have enough bright minds in Europe, which we have not been good at deploying, but good at exporting them. We must do more to ensure that they do not migrate into Silicon Valley or other tech centers in this world, but that they add value to our economy.” 
  4. “Europe needs to invest more in particular in technology, digitization, and related infrastructure.” 
  5. “We need to take a look inwards at our own attitude towards the technological disruption that is already reshaping the global economy… Europe should not focus primarily on regulating new technology, Europe should drive innovation itself.” 

 

He then moved into the importance of payments technology for transaction banks: 

“To give the best advice, we must also be experts and thought leaders on the dynamics of our business. Starting with the essence of transaction banking which is payments. As more and more industries move to an always-on approach, our client requirements are becoming ever more sophisticated and demanding. Frictionless, real-time payments is influencing consumer choices at the end of the day.”

“Problems with payments at the end of a journey will simply dent a customer’s overall experience and this affects their brand loyalty heavily. So it’s up to transaction banks to keep everything running smoothly behind the scenes. In simple words, we must be utterly reliable.” 

“Real time payments are perhaps the most important positive development in our business, but they create challenges. For once, real time payments need nothing else than real time monitoring and that equates to real time risk. Managing this effectively will require significant investments into technology. Not all banks will have the investment appetite to meet these requirements.” 

Modo got a shout out when he spoke about the growth of digital wallets around the globe: 

“Another major trend is the relegation of the traditional bank account. Currently accounts remain relevant, but they have lost their monopoly on non-cash payments. While a credit card always had traditional accounts in the background, today’s electronic wallets have the potential to replace the bank account for a certain target group, especially in many emerging or developing markets. That’s a development banks have to deal with. And we are. By emphasizing innovation and recognizing the benefits of partnerships, especially with startups. That’s exactly why we are working with and bought, actually, a stake in US based Modo Payments: an industry leader in digital payments innovation. The wallet payments specialist technology is helping us to extend payments into non-bank payments platforms such as Alipay, Paypal, and WeChat.” 

“Looking ahead, I am very optimistic for the transaction business globally. We see growing markets, in particular in the Asia-Pacific region...However not all transaction banks will follow the same business model, all must grapple with some key questions, including, when do I go alone?’ and, ‘When do I seek to partner with another bank, a group of banks, or a startup like Modo?’” 

Sibos Takeaways

Transaction banks have an ever-growing opportunity to serve their customers with better payments experiences, and many times partnering with companies is the best route to ensure that experience. At Modo, we’re proud to have clients like Deutsche Bank who are seeking out ways to innovate in the transaction banking space, and are dedicated to creating seamless payments experiences for their customers

If you’re looking for a bank-grade payments stack, reach out to us! We’d be happy to chat.

Topics: sibos, Christian Sewing, Deutsche Bank