https://www.linkedin.com/pulse/sibos-swell-two-visions-future-finance-don-tapscott/?trackingId=Zzzov5DeKaMTVrY8NXc1yw%3D%3DTen thousand of the world’s most powerful bankers will assemble here in Toronto October 16-19 for the annual Sibos congress. The mood will be unsettled and - with a little luck - sparks will fly.
Our global financial system serves billions of customers and supports a global economy worth more than $100 trillion. Since the crash of Wall Street in September of 2008, the financial industry has been under pressure to change.
Today, the overall state of the current financial system can only be described as dire.
It is antiquated, a kludge of industrial technologies and paper-based processes dressed up in a digital wrapper. It is centralized, vulnerable to data breaches, systems failures and cyberattacks that seem all too frequent. It is exclusive, denying billions of people access to the basic financial tools needed to improve their overall well-being. It is opaque, consistently baffling monetary policy-makers and financial regulators due to the strict compartmentalization of oversight. It is elitist, with industry executives receiving compensation far beyond the compensation provided to executives in other industries.
And it is monopolistic, stubbornly lobbying for the status quo and stifling the kind of disruptive innovation which serves as the bedrock for prosperity.
In 2008, through bad incentives and worse behavior, this industry very nearly brought down the global capitalist system.
These factors pulling for change are being boosted by a technological push. Blockchain – the technology behind cryptocurrencies like Bitcoin, Ethereum and Ripple – threatens to disrupt and even displace entire parts of the industry.
All this is coming to a head in Toronto this October. Sibos is the largest and most important conference of financial industry. Its organized by SWIFT, the Society for Worldwide Interbank Financial Telecommunications, which provides a platform for financial institutions to share information about their transactions.
My history with Sibos is interesting to say the least. In September 2008, I delivered the closing keynote address to the entire congress in Vienna. But the timing was bizarre, as this speech happened just two days after the Lehman Brothers fell and the banking was world sent into a tailspin. In the audience were thousands of stunned bankers, although some had left the event realizing that they had just unceremoniously lost their jobs. The term “deer in the headlights” comes to mind.
The night before my address, I decided to retire my powerpoint and shoot from the hip. I told them that they would remember the world up to this day and the world after this day – that it was a punctuation point in global history. I used the address to detail what I thought were the most egregious flaws in the financial sector.
Almost a decade after I gave that address, Sibos is coming to my own backyard here in Toronto. It occurred to me some time ago that given my Canadian connection I might be asked once again keynote the conference.
I sat by my phone for a few months, but still no call. Was it something I said?
Finally, my phone rang. While I was asked to deliver a keynote during Sibos, I wouldn’t be delivering it at Sibos. I was asked to deliver the closing keynote for an alternative conference running in Toronto at the same time, called Swell.
Swell is being organized by Ripple, a leading blockchain company who apparently felt that these topics were not being properly addressed at Sibos. It will feature two other keynotes, one from former Chairman of the US Federal Reserve Ben Bernanke, and the other from the inventor of the worldwide web Tim Berners-Lee. A number of other leaders in cryptocurrencies and the blockchain revolution will speak, including Ethereum founder Vitalik Buterin.
My closing talk is entitled: “Blockchain Revolution: The State of the World.”
Whereas my address at Sibos in 2008 outlined problems in the financial world, my address to Swell attendees will discuss solutions – the radical transformations in the global economy – particularly how blockchain technology is revolutionizing the financial industry.
It’s difficult to overstate blockchain’s potential to fundamentally change the way we do business. By removing the need for non-value adding intermediaries to provide trust in transactions, blockchain has the ability to assure everyone benefits from economic growth – not just the very few.
Banks should not view this as a threat but rather a call to action.
As for the State of the World, there are many burning questions to address:
What is hype and what is reality? To what extent are banks embracing this new technology, versus establishing themselves as impediments to change? Where are the real opportunities? Is the new wave of ICOs (the blockchain crowdfunding efforts that have already raised over $2 billion dollars this year) a bubble? How will the Chinese government’s recent actions affect the world of cryptocurrencies? To what extent is the rising tide of hard sovereignty and protectionism a threat to the potential benefits of a truly global distributed ledger? What kinds of regulation make sense? Which countries are positioning themselves as leaders of the second era of the Internet. How can the stakeholders effectively govern in the blockchain era?
And of course, the most burning issue of our time: What was JP Morgan CEO Jamie Dimon thinking calling bitcoin a fraud? #TheBigCryptoShort
And no, I won’t be predicting the price of any cryptocurrencies over the next year."
Mr Tapscott
