Paul Taylor, head of Global Financial Institution Sales for GTS at Bank of America, talks about the massive increase in the importance of data and how this will help FIs.
Foo Boon Ping (FBP): We are at SIBOS 2019 here in London, talking to Paul Taylor, the global head of financial institutions (FIs), Bank of America .
A lot has been going on in the last segment. Talk to us about the wider macro-economic landscape and the challenges that your FI clients face.
Paul Taylor (PT): There has been so much change over the last 12, 18, 20 months. As a financial institution, it's important for us to remember that we are here to serve clients. And even our clients are financial institutions, so we are here to help them serve their clients. In times of high disruption, whether geopolitical or whether economic, our job is to help our clients find a way through.
My personal belief is that business is like water. It will always find a way through. But as banks, our job is to provide the infrastructure, the products and services, and most of all, the certainty whether that's a security certainty, whether that's a compliance certainty, or whether that's an operating certainty, to remove risk on behalf of our clients and to allow our clients to do their business. In that sense, that hasn't changed. Albeit the geopolitical macroeconomic environment – they have become more intense over that period – our job hasn't changed.
FBP: Are there specific concerns that they have about currency, the way the US dollar is going down? And we talk about challenges. We talk about some of the opportunities, uncertainty and volatility. There's also the opportunity to create new businesses, especially with what the technology is doing in terms of transforming business models.
PT: There have clearly been a number of macro events over the last 18 months, whether you talk about the relationship between the US and China, whether you think about Brexit, or whether you think about some of the other major trading relationships, including the US dollar impacted by US-Canada, US-Mexico and some of the other tariff conversations. Nevertheless, institutions carry on, business carries on, and our job is to make sure that our clients can continue to operate, irrespective of what's happening in the market.
One of the big transformations over the last few years has been the massive increase in the importance of data. If you consider, the total amount of data in the world today is one zettabyte, which is one with 23 zeros after it, and 99% of that data has been created in the last 12 months. This means that our clients are managing data. We have an opportunity to use that data in order to offer them a more personalised service, to offer them a more secure service and to be able to help create connections between different parts of their business.
From a payments perspective, that may be our ability to help reconcile data with payment flows. And that's been a big topic, especially if you think in the corporate space about virtual account management, intelligent receivables and automatic reconciliation of payments. Whether you think about that from a new technology perspective, whether that's in terms of blockchain, the evolution of new messaging protocols and new channels, that data is giving us new possibilities. Fundamentally, to go back to my earlier point, this is about helping clients. If that data and the evolution of the services supported by data means that we can offer better service in more markets, with greater transparency, that's potentially a cheaper cost. That's what we want to do for our clients.
FBP: Do you think your client at this point are looking at data in a strategic way? And how can you help them look at data in a more strategic way to add value to their current business?
PT: Different institutions have a different view on data. Respectfully, I see data as the how, not the what. All of our clients continue to be focused on ensuring that they have a business, which is fit for partners from a compliance perspective, from a risk perspective, from a regulation perspective, number one. Number two, that they continue to offer the best value and best service in the market. And, number three, that they have a weather eye on the future, and that they understand how our businesses are evolving, how their clients are evolving and how we are going to respond to that. Data for me is not the topic. It underpins each of those different elements, and frankly, underpins our ability to serve each of those different elements. Data is the how. It runs through all of those different conversations. With our ability to manage that data on their behalf and with our ability to keep that data secure on their behalf, we can do a better job serving them against the things that matter most to them.
FBP: A lot of things are happening, whether it’s the financial market infrastructure or payment market infrastructure. In a way, they create a level playing field for many of your clients. How do you buy them? Or how do you bring them into this new infrastructure of global payment initiative (gpi)?
PT: The evolution of new technologies is great. The fact that so many companies and so many consumers now have access to a new range of services is great. And, frankly, it would be wrong for me to stand here and say that I have a problem with that or I’m worried by that. Quite the opposite. Banks will always have a fundamental role to play in the managing of poor infrastructure, the managing of risk in supporting key transactions and so on. Our ability to work with, to cooperate with, and in some cases, to take an active stake in technology companies, be they a financial technology or not, is something which is evolving in the market. I welcome that.
Though, I keep coming back to the same point. It's about our ability to serve the needs of our clients. Our clients are increasingly sophisticated. They are working in an increasingly challenging macro, political and geopolitical environment. Our job is to harness these technologies, whether those technologies are bespoke to us or whether they are working with other organisations to provide the best outcome for our clients. Gpi is a great example. Because what gpi talks about is absolute transparency and the ability to guarantee that transparency for the end user from the beginning of the transaction all the way through to the end. That is absolutely where we should be headed. It is enabled by technology and it's something we should obviously support.
FBP: Thank you for speaking to us.
PT: Thank you.