banking technology www.bankingtech.com FEBRUARY 2011 FEBRUARY 2011 FEBRUARY Fixing the European legislation on post-trade infrastructures is imminent – but markets will it have the intended effect? Looking to the future Temenos chief executive Andreas Andreades Nowhere to run, nowhere to hide Market surveillance systems get clever Going with the fl ow Trade is recovering: can banks capitalise on it? Roundtable: SEPA end date Have the regulators done the right thing? Special Report Regulatory burden: see page 27 Contents February 2011 In this issue 20 9 36 23 4 news 23 Going with the flow Trade finance activities are recovering from the 8 news Analysis crisis, but banks are facing challenges from a range ■ Heather McKenzie: The eC’s SePa end date of competitors. Systems will need to be flexible to clarification is as clear as mud cope and protect valuable business. ■ iPad drags apple into the financial services market ■ New reporting methods show extent of fraud in the 27 special Report: A new decade of regulation uK up – but down in financial services The regulators are now moving into a phase where they are passing laws, not directives, and the 12 Cartes show review financial services industry is facing some serious The Cartes show attracted 500 exhibitors and 20,000 questions in addressing the challenges they are visitors from 150 countries to Paris to hear about the facing. For some, it could even mean exiting parts latest smartcard, security and payment systems. of the business. 15 By the numbers 32 Roundtable: the sePA end-date debate ■ Ovum: european retail bank IT spend is lagging a panel of industry specialists discuss the behind other regions implications of the eC’s latest rulings and the need ■ Financial services growing, but jobs outlook grim to convice customers of the benefits of SePa. 16 Cover Focus: fixing the markets 36 Interview regulations to alter the structure of the european Tememos chief executive andreas andreades trading markets are focussing closely on the post outlines the company’s plans. trade environment, with new legislative proposals due in early summer. 38 Appointments 40 Products & services 20 nowhere to run, nowhere to hide ... ■ Vendor announcements, enhancements and as international regulators move to prevent innovations another crisis, surveillance systems are becoming 43 Industry columns & comments increasing sophisticated. 48 out of office www.bankingtech.com I 1 Contents February 2011 In this issue 20 9 36 23 4 news 23 Going with the flow Trade finance activities are recovering from the 8 news Analysis crisis, but banks are facing challenges from a range ■ Heather McKenzie: The eC’s SePa end date of competitors. Systems will need to be flexible to clarification is as clear as mud cope and protect valuable business. ■ iPad drags apple into the financial services market ■ New reporting methods show extent of fraud in the 27 special Report: A new decade of regulation uK up – but down in financial services The regulators are now moving into a phase where they are passing laws, not directives, and the 12 Cartes show review financial services industry is facing some serious The Cartes show attracted 500 exhibitors and 20,000 questions in addressing the challenges they are visitors from 150 countries to Paris to hear about the facing. For some, it could even mean exiting parts latest smartcard, security and payment systems. of the business. 15 By the numbers 32 Roundtable: the sePA end-date debate ■ Ovum: european retail bank IT spend is lagging a panel of industry specialists discuss the behind other regions implications of the eC’s latest rulings and the need ■ Financial services growing, but jobs outlook grim to convice customers of the benefits of SePa. 16 Cover Focus: fixing the markets 36 Interview regulations to alter the structure of the european Tememos chief executive andreas andreades trading markets are focussing closely on the post outlines the company’s plans. trade environment, with new legislative proposals due in early summer. 38 Appointments 40 Products & services 20 nowhere to run, nowhere to hide ... ■ Vendor announcements, enhancements and as international regulators move to prevent innovations another crisis, surveillance systems are becoming 43 Industry columns & comments increasing sophisticated. 48 out of office www.bankingtech.com I 1 eDITORIAL COMMeNT February 2011 editor David Bannister +44 207 017 4019 [email protected] Deputy editor Neil Ainger +44 203 377 3498 Small change [email protected] here is, and will be for some time, a lot of talk about Publishing Director Brian Meggs narrow banking and casino banking, and how to keep the +44 207 017 5004 two apart. Most of it is nonsense, so I may as well add [email protected] T what passes for my thoughts. Regular Contributors Frank Booty, Fabien The first of these is that change is happening in the retail world Buliard, Sherree DeCovny, Tom Groenfeldt, at an enormous pace, so anyone operating there has to be very Eugene Grygo, Heather McKenzie, Nicholas fleet of foot. Pratt, Kristina West The second is that the “tsunami” of regulation has created a Designer Kosh Naran world where it is very hard to be fleet of foot. How you balance these two is clearly problematical. regulators and politicians Press Releases Send relevant releases to seem to think that “narrow” banking is the answer to this: basic accounts, savings and [email protected] loans for Joe and Joanna Public to keep their salaries or benefits in. barclays seems to be heading for that in its retail operations – in January it Senior Sales executive Leon Thomson, +44 203 377 3493 announced that it was taking investment advisory services out of branches, with a [email protected] consequent loss of jobs. Wealthier customers will still have barclays Wealth to turn to if they have £500,000 of investable funds. That’s more than 20 times the average income Head of Awards and events in the uK, by the way. Samantha Graham, +44 207 017 5122 In other areas of banking, the regulations are reshaping the landscape more subtly, [email protected] but not always in ways that are compatible with creating the stability the regulators intended. The FX market, for instance, has seen changes as it moves towards using Marketing and Circulation Louise Canfield, the prime broker model, substantially though the ICaP Traiana post-trade processing +44 207 017 4088 system. Some argue that creates a systemic risk in the market by concentrating risk. [email protected] With $1 trillion of Spot FX trading going through the system every day, any failure could Subscriptions and Renewals Michael Oxley quickly bring other areas, such as the interest rate swaps market, to a grinding halt. +44 203 377 3220 That’s not in the plan, is it? BT Email: [email protected] For Reprints and Web Publishing Rights David Bannister, editor please contact Louise Canfield on +44 207 017 4088 ©2010 Banking Technology All rights reserved; no part of this publication Do believe the hype may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, was travelling into the office listening to my iPod on shuffle, electrical, mechanical, photocopying, recording, or and marvelling at how scratchy and lo-fi Publice nemy’s Don’t otherwise without the prior written permission of believe the Hype sounds these days, when I started playing with the publisher. I the device in my hands. Having been an initial sceptic about the Banking Technology is published 10 times a year iPod and asserting it was ‘just another walkman fad’ (stupid boy!) I by Informa Business Information, a trading division got to thinking what else might change and prove me wrong as we of Informa UK Ltd, Telephone House, 69-77 Paul enter a new decade? What hype should we believe? Street, London EC2A 4LQ, UK. Many have said to me recently that instead of a new gadget, Printer: Wyndeham Grange, Southwick, UK. the next technology wave will be a consolidation of functions on to the new generation of mobile smartphones, offering music, pictures, banking and Subscription enquiries: Customer Service Dept, even payments with new NFC-enabled secure chips. This is one consumer revolution Informa UK Ltd, Sheepen Place, Colchester, CO3 that will drastically impact retail banking if the predictions are correct. Given that I’ve 3LP. Tel: +44 (0)207 017 5532, Fax: +44 (0)20 7017 7860, Email: [email protected] Annual already seen the technology in action during a press trip to Sitges, Spain, last year with Subscription: UK £655, Europe €815, US/rest of La Caixa, Visa and Telefonica, where 500 shops were wired up to receive contactless world $1175. m-payments I’m inclined to believe the ‘futurologists’ on this one. I’ve also just been reading about Orange’s plan to launch what it says is theu K’s Member of the Audit Bureau of Circulation first similar m-payments scheme this summer withb arclaycard, Pret a Manger, the Average net circulation for the period 1st July 2009 – 30th June 2010 – 8,108. National Trust and Little Chef (see online for more). O2 trialled a similar scheme in 2009 when mobile phones could be used instead of the Oyster card to pay for tube journeys in London and the operator is thought to have imminent plans of its own in this space. even the Wincor Nixdorf trade show that I attended in Germany recently had acres of exhibition space devoted to the mobile channel, displaying how codes can be sent to phones that can then be held up toa TMs to retrieve ‘emergency cash’. The buzz around the mobile channel is real and this is one case where I think – apologies to Chuck D – you should believe the hype.