30 November 2016Financial Times HeadquartersLondon

Balancing agility and risk in financial services

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AGENDA

08:00 Registration and breakfast

09:00 Chair’s opening remarks

Dan Thomas, Assistant Companies Editor, Financial Times

09:05 Opening keynote conversation

Anne Boden, CEO and Founder, Starling Bank

MODERATORDan Thomas, Assistant Companies Editor, Financial Times

09:25 Panel discussion

• How have online applications driven change in financial services and how are people profiting from it?

• Do the challenges – uncertain economic forces, regulations, future-proofing and competition – remain the same when considering new software?

• Creating an equilibrium between flexibility and security in financial service technologies• Understanding the impact of Brexit on the future of financial services in the UK and its

growing adoption of mobile technologies

Stewart Carmichael, Chief Technology Officer, SchrodersChristophe Chazot, Group Head of Innovation, HSBCRobert Coleman, Chief Technology Officer - UK and Ireland, CA TechnologiesDora Ziambra, Head of Business Development, Azimo

MODERATORDan Thomas, Assistant Companies Editor, Financial Times

10:10 Audience Q&A

10:20 Chair’s closing remarks

Dan Thomas, Assistant Companies Editor, Financial Times

10:25 Networking break

11:00 End of event

FT - CA TECHNOLOGIES EXECUTIVE FORUMSUMMARY REPORT

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The pace of change in the financial services sector shows no signs of slowing down. Technology and finance are colliding quicker than ever; throwing up lots of opportunities and lots of new risks, which will require greater agility and more investment from banks. Technology has been a force of good and a factor for change with AI, prediction technology, data analytics and big data already happening in start-ups and being adopted by some of the bigger banks. Blockchain comes and goes in popularity, but undoubtedly is here to stay.

One participant discussed their experience of starting up a bank and difficulty with the Bank of England and regulators setting the bar very high. Raising money for start-up banks is very difficult; however there is plenty of money available for Fintechs, as there are lots of incentives. It is very hard to get seed funding for start-up banks. From their experience in financial services and fintech, it became apparent that implementing new technology in big banks can cost £30 million for example, whereas it would cost £30,000 in a fintech organisation. Fintechs are able to innovate quickly and cheaply.

In order to succeed as a start-up, one needs to differentiate themselves from the crowd; having technology, which has been developed by the organisation, and agile methodologies to deliver functionality to the customers quickly, are crucial. The start-up intends to use the huge amount of customer transaction data to benefit the consumer in order to provide them with a better financial life. They plan to be part of an ecosystem, coexisting with other products and providers on their platform. Effectively the platform lives around the customer’s day-to-day finances.

SUMMARY REPORT

The big banks have a myriad of different customer segments, channels and products, as well as acquisitions, which results in thousands of systems. Taking an existing customer base and migrating it across to a new platform is very difficult within big banks and a big problem for the sector. As a start-up, focusing on one product, one channel and one market segment alleviates this problem.

One of the main problems in existing incumbent banks is the number of legacy systems, which makes maintenance and patching them for security issues extremely difficult. Ensuring the periphery of the organisation is guarded and controlled with software that is up to date and resilient to attacks is critical. Focusing on what an organisation is good at will give that company a strategic cost advantage.

CUSTOMER EXPECTATION IN 2016 AND THE FUTURE

The financial services industry is moving from a product focus to a more personalised service, which gives start-ups the advantage. One participant commented that “the challenge for big banks isn’t the technology, as there is plenty out there, but more the culture within big organisations”. Another participant described the future as being “about the totality of financial health”, a system where with the touch of a button on any device, individuals are able to see their complete financial health. The financial services industry will start planning growth on an outcome basis and then give people advice and products around that.

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Is the possibility of Facebook, Apple or Google setting up a bank, a potential threat to the banking sector? They have the ability to come to market a lot quicker than most organisations, as they practice agile methodologies and are able to pull teams together extremely quickly. Having no internal barriers to building new products and solutions means they are capable of getting them out into the market place rapidly. Apple and Google are a potential threat to the financial services, as if one considers the amount of client data they have, as well as the understanding of those client behaviours; they have the ability to sell them products based on that data very effectively. Apple and Facebook with Apple Pay and Payments in Messenger respectively indicate that they are testing the water. Financial services regulators are keen to ensure the players are not too dominant, but at the same time the digital online environment is pushing to be as big as possible.

There are many advances in technology, notably around data science for analytics and artificial intelligence, as well as robotics. Banks are reducing the number of touch points (such as high street branches) and increasing automation. Investing in software and robotics means many of the business processes can be stripped away, therefore reducing the cost base and releasing funds for the bank to innovate. One of the panellists suggested that the use of natural language processing can reduce the cost of having a call centre; as it gives a set response which appears to the customer as though they are conversing, even though there is no one speaking to them.

SUMMARY REPORT

CYBERSECURITY

One of the participants commented that it is possible to reduce fraud today, due to the highly integrated financial system that we now have in place. Another participant stated “you need to think about the multiple points of attacks, not the traditional walls of the castle being breached”. To try and ensure continuity and security within a bank across a whole range of systems, one requires certain individuals to have privileged accounts into key databases, servers and applications. However, these privileged accounts are often the point of potential attacks and despite all the measures that financial services take to reduce cybercrime, breaches will continue to occur.

Other preventative measures that financial services can use include educating both clients and employees on phishing and whaling, and lessons in examining data analytics, in particular behaviour analytics and whether accounts and machines are behaving differently. A lot of malware sits idol for a number of months when it gets into the environment and one panellist remarked, “it is not a case of stopping something happening, but identifying it as soon as possible and reacting to it”. Another suggested, “everyone building software needs to be bullet proofing it for security”.

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When discussing potential insider attacks from disgruntled employees, the panel stressed the importance of ensuring employees with privileged accounts are immediately denied access from the systems, deploying regular data loss prevention checks and monitoring employee activity at odd times of the day or night with behavioural science.

In conclusion, the participants were agreed that the digital world is creating new challenges, which in turn requires new regulation to ensure the financial system is secure. Finally, one needs to consider the consequences of what is being implemented, as one discovers new ways of doing things and learns how to use these tools in the most productive way.

BIOGRAPHIES

CHAIR

Dan ThomasAssistant Companies EditorFinancial Times

Dan Thomas has been the Financial Times’ assistant companies editor since March 2016. Mr Thomas was previously the FT’s telecoms editor, having worked as a telecoms correspondent since 2011. Prior to that, he worked as the FT’s property correspondent. He has also reported for FT Money and FT Weekend’s personal finance supplement. Prior to joining the FT in March 2007, he was

an assistant editor for Property Week.

Mr Thomas holds a postgraduate degree in journalism from City University and a BA in English and Philosophy from Manchester University. He was named Business Journalist of the Year at the LSL Property Awards and awarded IBP News Reporter of the Year – both in 2010.

SPEAKERS

Anne BodenCEO and FounderStarling Bank

Anne Boden is CEO and Founder of Starling Bank. Prior to Starling, she was Chief Operating Officer of Allied Irish Banks Plc and Head of EMEA, Global Transaction Banking across 34 countries for RBS and ABN AMRO. She has more than 30 years experience in banking, having begun her career at Lloyds Bank, before moving on to Standard Chartered Bank and then UBS in Zurich.

Ms Boden was recently recognised as one of the Global Power Women in FinTech. She holds a BSc in Computer Science and Chemistry, an MBA and is a Fellow of the Chartered Institute of IT.

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BIOGRAPHIES

Stewart CarmichaelChief Technology OfficerSchroders

Stewart Carmichael is the Chief Technology Officer for Schroders. He joined Schroders in March 2015 as Group Head of IT and then in 2016 he joined the Schroders Group Management Committee reporting to the CEO. Prior to joining Schroders, Mr Carmichael was Chief Technology Officer for JP Morgan Corporate & Investment Bank in Asia from 2009 to 2014. From 1993 to 2008

he held numerous senior leadership positions during a 16 year career at Merrill Lynch. These included Chief Technology Officer for Merrill Lynch Asia Pacific, Chief Administrative Officer of Merrill Lynch Global Services Pte Ltd and Chief Technology Officer for MLIM International.

Mr Carmichael has lived in New York, Singapore, Hong Kong, and London where he is currently based. He has a Bachelor of Science (with Honours) and an Honorary Doctorate from the University of Hertfordshire.

SPEAKERS

Christophe ChazotGroup Head of InnovationHSBC

Christophe Chazot is Group Head of Innovation for HSBC. He leads Strategic Innovation Investment, responsible for investing in disruptive companies; Innovation Strategy, responsible for identifying and analysing themes that are key to HSBC’s future; and the Innovation Centre which organises internal initiatives including incubation.

Mr Chazot has over 20 years of experience across all the major asset classes in capital markets. Prior to becoming Head of Strategy and Planning for Global Banking and Markets in HSBC in 2012, he worked as Co-Head of Global Equities and was made a member of the Global Markets Executive Committee in 2008. Mr Chazot was previously the Global Head of Equity Derivatives from 2005 to 2008. Prior to joining HSBC in 2005, he worked at Dresdner Kleinwort as the Global Head of Equity Derivatives; at Bankers Trust as the Global Head of Foreign Exchange Options; and at Barclays de Zoete Wedd as an interest rates swaps trader.

Mr Chazot’s interest in fintech dates to 1987, when he founded Softinvest, a technology company specialising in financial services which developed the Topval Option pricing and visualisation software which was sold to the French Stock Exchange.

Mr Chazot holds a Master of Science in Technology and Policy from MIT. He is a graduate of the Ecole Polytechnique and the Ecole Nationale des Ponts et Chaussées. He is the author of Les Swaps: concepts et applications, which is rated 4.7 stars on Amazon.fr.

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BIOGRAPHIES

Robert ColemanChief Technology Officer - UK and IrelandCA Technologies

As Chief Technology Officer for UK and Ireland, Robert Coleman is focused on acting as a trusted advisor with clients, working with CIOs and IT management in order to help them execute on their IT strategies. His role is focused on assisting organisations build IT management systems where process, technology and organisation are in balance. This is achieved by engaging with key stakeholders

to map out current challenges and design future states, which are focused on customer specific scenarios such as agile transformation, DevOps adoption and security. A key part of this is working with clients on determining key business drivers and priorities to build business cases for the adoption of solutions. Mr Coleman has over 25 years’ experience in technology, working more recently with large financial services organisations in the UK; having started his working life in IT for a large multinational manufacturing company before moving into major system replacement projects in the insurance industry and joining IBM from 1999 to 2008. Since joining CA Technologies he has worked in a variety of pre-sales roles before becoming Director for Presales in UKI in 2015. He holds a BSc in Computer Science and Psychology from University College Dublin.

SPEAKERS

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Dora ZiambraHead of Business DevelopmentAzimo

Dora Ziambra joined the Azimo team in 2014 and brings a wealth of experience from across the financial sector. She is a passionate advocate of diversity within the FinTech industry and volunteers as a coach for the Cartier Women’s Initiative Awards. Having experienced life as one of only a handful of female traders at various firms, she knows all about the importance of gender

equality in the modern workplace. As Head of Business Development, Ms Ziambra is instrumental in building up Azimo’s network of partners across more than 190 countries and scaling the business into new markets. It’s a constantly evolving role as the company is growing so fast – day-to-day tasks can involve anything from banking relationships and strategic partnerships to fundraising and international expansion. Prior to Azimo, Ms Ziambra has clocked up her fair share of air miles during her global career. She started out as a derivatives trader in Chicago, built her own options trading business in Germany, worked in international banking in London and Frankfurt, and joined a start-up advisory in Africa. Along the way, she has worked for the likes of ECB, Deutsche Börse and PayPal. Ms Ziambra was recognised as one of Innovate Finance’s Women in FinTech 2015 and won Best Pitch at a UKTI FinTech event in Singapore. She holds a BA from Bryn Mawr College and an MBA from INSEAD.

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ORGANISERS

CA Technologies makes software for businesses that are development-driven, because we believe those who build the apps will own the future. We help our customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From planning to development to management to security, at CA we create software that fuels transformation for companies in the application economy. With CA software at the centre of their IT strategy, organisations can leverage the technology that changes the way we live – from the data centre to the mobile device. Our software and solutions help our customers thrive in the new application economy by delivering the means to deploy, monitor and secure their applications and infrastructure. Our goal is to help organisations develop applications and experiences that excite, engage and open up money-making opportunities for their businesses. CA solutions power innovation by helping organisations to understand, plan, manage and control infrastructure to ensure the best possible business outcomes.

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