With Sibos 2015 due to kick off in Singapore early next week, the great and the good of the financial industry will be debating some of the key themes of the year. Here are our picks for the top three topics everyone will be talking about:
The cost of compliance
Regulation has been a hot topic since the 2008 financial crisis and remains so seven years on. New regulations such as MiFID II, which is set to come into effect from early 2017, have seen the debate on the cost of compliance reach fever pitch. In order to ensure compliance with upcoming regulation, financial institutions are having to re-evaluate their business and operational strategies, with some implementing drastic cost-cutting initiatives to meet increased demands. There has been some argument that the rising costs will price smaller firms out of the market and lead to more consolidation within the industry, creating fewer choices and reducing competition, and it’s certain that the debate will continue at Sibos.
Internationalisation of the renminbi
It’s been an interesting year for the Chinese currency. The PBoC has been working hard to push the renminbi closer towards internationalisation, with a surprising devaluation of the yuan in August this year and promises of limited intervention in the currency in the future, instead allowing market forces to play a more significant role in setting the exchange rate. With the IMF soon to announce whether or not it will be adding the renminbi to its Special Drawing Rights basket, it’s likely to be a much-discussed topic at Sibos this year. If the renminbi misses out during this review, the Chinese government faces a five year wait before it can be reconsidered. Regardless of the outcome, it’s likely to have a significant impact on global markets, so watch this space.
Emerging technologies – digital ledgers and blockchains
Blockchain has gone from being a much discussed but little understood topic in the markets to being considered one of this year’s most exciting emerging technologies, touted as having the potential to revolutionise the financial services industry. The technology, which is used to underpin the controversial Bitcoin, has received an increasing amount of attention over the past year, following the launch of several new projects which aim to develop it for a range of uses in the financial industry and beyond. Blockchain technology, also known as digital ledger technology, is still very much in the nascent stage of research & development but that hasn’t stopped speculation that it could be used for everything from securities to car loans. The idea of a decentralised, shared record of transactions has also appealed to regulators, with the Bank of England suggesting that banks should spend more time and money investigating its possible uses and the practicalities of implementing it within key markets. It’s definitely one to watch at Sibos 2015.