KEY CONCLUSIONS:
- The financial sector is increasingly shaped by and has to meet stricter requirements set by new technologies
“We are living in times where there is a lot of new emerging technologies <…>. That is really providing a huge amount of opportunity for us to rethink how financial services are being made,” said Sean Foley, Worldwide Financial Services Chief Technical Officer, Microsoft.
“For a large company operating in a competitive environment, it is vital to balance internal transformations and new features for clients with preserving stability,” said Olga Dergunova, Chairman of the Management Board, VTB Bank.
“We do not pursue this (development of technological projects – Ed.) jointly with partners or outsource it to IT companies. Why so? Because we see current technological innovations as a real competition,” said Oliver Hughes, Chairman of the Management Board, Tinkoff Bank.
“I think AI is here already and it is here to stay. I think that today it is pretty rudimentary, it is just a pattern recognition <…> people will have much better AI in the future <…> what we are going to have in five years is something called ambient intelligence,” said Sean Foley.
CHALLENGES:
- Imperfect technologies
“If you have done new blockchain projects, the technology is really raw, it does not work very well and it takes a lot of effort to get it to work,” said Sean Foley.
- Raw environment
“Russia’s environment is poorly suited to drawing together major banks looking for innovations <...> and startups seeking to develop and create new products,” said Sergey Solonin, General Director, FINTECH Association.
- Security issues
“The modern technological platforms and core businesses we are in charge of are highly vulnerable and dependent on the environment we are in, which makes us raise information security issues when piloting new technology,” said Olga Dergunova.
SOLUTIONS:
- Openness and willingness to work together with experts and the government
“As of mid-2016, NASA had over 42 projects that they had completed within 710 contests. <…> So, this is a big bureaucratic organisation that is figuring out how to get input from outside in a controlled and meaningful way,” said Elizabeth Altman, Assistant Professor of Strategic Management, University of Massachusetts Lowell.
“Building an association that will enable the most active and mobile banks to negotiate and reach an agreement, pilot the technology at their own expense, and at the same time agree on changing the regulatory standards and enable partners in the sector to use the results of our work,” said Olga Dergunova.
- Not being afraid to try
“You could put a blockchain alongside the existing process, and it was able to collapse a trade finance process that took up to 22 days down to 3, and that could be a huge transformation,” said Sean Foley.
“We at Microsoft have been doing a lot of work on both how we work with regulators and how we work with some of the larger banks to enable cloud as an option for those. And what we are now beginning to see is that even the largest banks, not just innovative banks like Tinkoff Bank, even too-big-to-fail, global, systemically important financial institutions are now moving to the cloud,” said Sean Foley.
- Investing in cyber security
“I think that cyber security is an underinvested area. I see vast opportunities there,” said Sergey Solonin.
“There is a huge problem in cyber security related to the fact that we have hundreds of various passwords. <…> And biometrics can be of enormous help here. We are moving in this direction,” said Oliver Hughes.
- Developing common approaches and standards
“The bright façade of today’s technological promises has ten years of ceaseless work in store for us, work to create three things: standards that will provide tech divisions with uniform approaches to interfaces, platforms of seamless interaction; security standards; <…> and large-scale deployment of technology,” said Olga Dergunova.