Steve Groppi, JPMorgan's business executive for treasury services in EMEA and Asia, has admitted that JPMorgan has a key role to play in leading the world's banks in changing the way they undertake the payments business.
After Heidi Miller's call for change at last year's Sibos, the onus is now on the banks to come up with solutions. And one of the clearest messages to come out of this year's event is that banks' corporate clients are bored with waiting for banks to change themselves.
"JPMorgan has to take one of the first steps in this," says Groppi. "And there is also pressure on SWIFT and on the whole industry. Even so, we all need it."
Groppi says that one of the most memorable aspects of Sibos 2005 has been the increased presence of corporations in the event. "The increased corporate representation here is a good thing," he says. "But companies are frustrated at the progress of bank payment connectivity and are demanding that we banks adopt more common standards."
From nearly every Sibos session that has covered banking and payments, there has been a call for banks to transform the way they do payments. If they do not, either the regulators or the non-bank competition will do it for them.
One such change that is coming is the introduction of the Single European Payments Area or SEPA. This sees a new regulatory regime where banks will have to offer the best service and costs for all payments within the EU. It is a change that will have a huge impact on the current banking business models.
Groppi says that there are lessons for Asia to learn as SEPA gains traction. If ever Asia is to move towards any kind of monetary union or single payments system then it can look at how SEPA has come into force. Groppi says the biggest lesson that can be learned is that the industry should not lose sight of commercial reality when striving to impose some logic on the market.
"The industry in the EU does have the right vision in this - you cannot argue against a single payments area," he says. "But I think we might have gone from vision to standards without a fully formatted business case in the middle."
Nevertheless, the message from Sibos this year is that banks need to start actually doing something about payments before someone else does so. It is a message that is resonating loud and clear. Groppi has heard it and realizes that JPMorgan has a leading role to play in the transformation of the industry.
"From an industry standpoint, banks are rallying round this common cause," he says. "But when they all go back to their offices and look at the revenue impact it might cause them to pause and slow the positive momentum."
His solution? Moving the focus of the business away from a tallying up of the revenues generated from individual transactions and a move towards one priced on the level of services you can offer clients. With such a service-focused approach anchored around common standards, the global payments business can continue to thrive.
