At Sibos one of the most prominent keynote speeches was that by the IBM Chairman, President and CEO Ginni Rometty. Ginni covered a lot of ground during her speech and i must admit it was pretty interesting! Following is a recap of the key themes that i took away from the discussion.
1. Financial Services are Facing Numerous Challenges
Ginni described how IBM “cares deeply for Financial Services” (awww), and how IBM (of course!) can help strengthen the sector and move it forward. This despite:
- Unprecedented changes:
- The need for compliance in an ever complex and growing regulatory environment
- New technology and new technology entrants into the sector
- Changing customer demands
- “Shedding core businesses” – I found it fascinating that Ginni used these very words!
- Building new ecosystems with partners
- Cybersecurity, Big data
- And another reference to getting eaten up or as Ginni put it “watching that someone doesn’t disintermediate you”
2. “A Moment of Opportunity, If You Choose to Seize It” – Ginni Rometty
Ginni revealed her optimism for the future of Financial Services due to 3 reasons:
- Digital Platforms will become even stronger
- Ultimate competitive advantage will come from cognitive technology
- Financial Services can lead the world into a new era
3. Recognition of Recurring & Cross-Industry Requirements:
- Data rich & analytic powerful front end apps
- Hybrid cloud – using both the public and private cloud
- Enhanced cyber-security
4. The Importance & Necessity of a Digital Foundation
IBM is deeply dedicated to digital and the statistics reveal why…! IBM has a revenue of over $80 billion, 38% of that comes from helping IBM customers in becoming digital.
5. “Blockchain is Part of the Digital Foundation & Will Make You More Powerful” – Ginni Rometty
Ginni clarified that she is not talking about bitcoin or a digital currency, rather the underlying technology which “allows you to have trust and efficiency in the exchange of anything”. Ginni predicts that “blockchain technology… will have a profound change in how the world works”.
Lastly Ginni talks about blockchain being an enabler for any transaction to be trusted between parties. Add traceability, authenticity, anti-money laundering, tracking, trust and the value of blockchain runs into hundreds of millions of dollars!
Ginni nicely summarises “when you have one version of the truth you can get a lot of efficiencies!”
6. “Blockchain will do for transactions, what internet did for information” – Ginni Rometty
Blockchain like the internet will need global governance and standards that must be adhered to:
- Blockchains must be immutable – they cannot be changed
- Only permissable transactions can be completed and recorded on the blockchain
- IBM has been working towards ensuring blockchain is open, secure and scalable
The Linux Foundation through the Hyperledger Project is creating the standards for future blockchain applications. Ginni emphasised the importance of these standards, illustrating how the industry can then focus on building applications on top of the underlying blockchain technology and not on building what is beneath the surface, which is what everyone should share.
Current real-world blockchain examples include: Foreign exchange settlement, smart contracts, identity management (KYC), trade finance.
7. “Digital is a Foundation, but not The Destination” – Ginni Rometty
Ginni posed the question when everyone is digital, who wins? There is another shift happening, according to the IBM Chief, that will be more transformative and disruptive – Cognitive Business.
Cognitive business is:
- What you get when you take a digital business and add digital intelligence to it
- A business model and a technology model
- The Destination and gives you the “ultimate competitive advantage”
8. Data is the Natural Resource of this Era
Ginni talked about how new technology is needed to deal with the data, and went on to describe how 80% of the data available to systems is largely invisible. Right now there is a lot of invisible data (videos, tweets, pictures, sound, motion, knowledge) from which no one is getting any value.
Something different different is needed to tap into this. IBM call it Cognitive. Cognitive will bring about systems that can understand, reason and learn – just like the human mind.
9. Cognitive Technology – Its all about Learning, not Artificial Intelligence but Augmenting Intelligence
Ginni describes cognitive as much more than artificial intelligence (AI). Most people associate AI with machine learning, and that is just one part of Cognitive. Looking forward Ginni believes the challenges are too great and that systems that can learn are needed to help navigate the increasing complexity of the world around us.
In a world where everything is digitised and interconnected, you simply cannot program for the increasing number of combinations – you need to build learning into your systems and processes to consume the incredible amount of data out there. A couple of noteworthy comments from Ginni:
- “Cognitive is the first technology you’ll have that will be worth more over time, than less over time”
- “If what you have is digital today, it will be cognitive tomorrow”
- “Augmented intelligence.. helps you deal with the grey area”
An example of Cognitive is IBM’s very own Watson – a cognitive assistant. Watson is in 45 countries in 20 different industries across healthcare, retail, lawyers, learning, cooking and financial services.
10. Financial Service can and will lead the World into this [Cognitive] Era
Throughout history, Ginni highlights, Financial Services have led every other major area of technology and thinks the same will be true of cognitive technology. Ginni anticipates new “platforms that will evolve around cognitive, cloud and blockchain technology because the basis of competition has already been reset, and will be reset again”.
Interestingly Ginni shares that this technology is not about replacing people, but about making better decisions. She revealed how success will be determined by information, and how every major decision made will be based on assistance from an underlying cognitive engine.
Lastly Ginni warns “You will either be disrupted or will be the disruptor”. The choice is yours!