Why Beijing Hosting Sibos 2024 Matters: Our Takeaways from the Global Financial Services Event

Why Beijing Hosting Sibos 2024 Matters: Our Takeaways from the Global Financial Services Event

October 2024

The Swift International Banker’s Operation Seminar (Sibos), an annual gathering of financial professionals, was held for the first time in Beijing this year, returning to Asia Pacific for the first time since it was hosted in Sydney in 2018.

The usual conversations about banking, payments, and technology shed light on the future of the industry for the more than 10,000 in attendance and gave a glimpse into how policy and businesses are evolving. Yet we also gained some insights unique to this year’s venue, about how China is planning to fix some of the issues facing its economy by modernising and liberalising its financial sector. These changes should present new opportunities for businesses in the market and influence the financial services sector across the region and the globe.

Here’s why China policy made headlines, what businesses need to know as they plan for 2025, and other trends to watch coming out of this year’s conference.

China opens up at Sibos

The highlight of Sibos 2024 was a speech by Lu Lei, deputy governor of the People’s Bank of China (PBOC), which sent a clear signal that China is intent on continuing to open its financial sector. At the opening ceremony, Lu noted that the country has removed foreign ownership restrictions for banks, brokers, and insurers. China also wants to “actively participate in global financial governance”, he said.

Intent on encouraging foreign investment in China, the PBOC, China’s central bank, will facilitate cross-border trade and finance while promoting internationalisation of the renminbi. At a time when geopolitics are deeply affecting FDI decisions, moves to make investment easier are encouraging and need to be embraced by businesses.

Of course, this message of openness comes as China announces a string of initiatives and regulatory changes aimed at boosting its economy and stock markets. There have been interest rate cuts, offers of loans for share buybacks, and the assurance that more stimulus is on the way. With recent market rallies buoying investments in China, the potential rewards for investment can be high.

For people in financial services, these developments could further help put China investments back on the strategy map. The government’s recent announcement that it will expand access for foreign investors to stock index and treasury bond futures is a significant step in this direction. More details are needed, of course, but important business opportunities look set to emerge.

Payments level up

Related to China’s reforms to encourage foreign investment, the country is moving quickly to support more cross-border payments. Predictably, payment modernisation was a major topic at Sibos despite the roadblocks facing globalisation around the world.

Among Lu’s other points, he said China will promote the interlinking of QR codes and the acceptance of foreign payment methods. This change could have massive and long-lasting impacts, not only on the financial services sector but everywhere from consumer goods to tourism, making the purchase of goods and services simpler for international consumers in China.

China has already granted permission for Mastercard to offer payment services in China, and its willingness to embrace more players in a market that has long been closed off represents a significant opportunity.

Separately, Mastercard announced a new product that it hopes will enable near real-time commercial cross-border payments. This product is also expected to include risk control services and fraud analytics. The solution should fill a significant gap – according to a survey released by Citi to coincide with Sibos, clients increasingly expect payment services to be instant and available 24/7.

A new payment standard (ISO 20022) is expected to push the industry in the right direction. Global migration to this standard may not be as fast as some market participants would like, but it is already making a difference in improving existing payment operations.

AI continues to make its mark

Of course, no technology-related conference would be complete without discussion on the development of artificial intelligence, and at Sibos 2024 we continued to see AI-driven developments that will impact the efficiency and security of businesses.

Deutsche Bank demonstrated a large language model that can parse 20,000 pages of regulatory text in multiple languages and produce analysis in under five minutes. The bank is making use of AI on multiple fronts. In payments, for instance, AI can help reduce the number of times payments are unnecessarily blocked over presumed compliance issues. At the same time, it can improve the detection of potential financial crime.

At China Construction Bank (CCB), meanwhile, AI is being used for customer scenarios, risk management, and operational functions. Speaking on a panel about generative AI deployment, CCB’s deputy general manager from the AI engineering department said the use of the technology has already helped in streamlining the servicing of customers.

The flipside of AI’s usefulness to businesses, however, is its exploitation by financial criminals. In response, the industry can look forward to a new AI-powered anomaly detection service – to be launched in January – that has been jointly developed and tested by Swift and major financial institutions across the world.

We expect to see more developments that enhance the ability of financial institutions to streamline processes, use information more effectively, and expedite services. Alongside these new developments, the need for continued vigilance will also increase – as will the imperative for timely, transparent communications to customers and clients in the face of new threats.

What financial institutions should take away from Sibos 2024

Given the focus on Asia in 2024 and the new developments emerging from China, here are three top pointers for financial institutions operating in the region:

1. New efforts to open up the Chinese financial system will continue alongside measures to spark economic resiliency and hit future growth targets. Businesses have immense opportunities to be first movers by working with stakeholders in China focused on international markets, while also capitalising on new possibilities in the domestic market.
2. Developments in payments technology will encourage cross-border fluidity for investors, businesses, and consumers, alike. A stakeholder-based approach to educating these audiences on new technologies can drive faster adoption of new innovations.
3. Technological advances based on AI will only increase in the coming months and years. Communicating the benefit of these new offerings will require an in-depth knowledge of both the technological differentiation as well as the value proposition for end users. Meanwhile, it is crucial to monitor and analyse AI regulations worldwide as policymakers become more aware of the misuses and abuses of this technology.

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