New technologies and solutions need not spell the end of traditional financial institutions, which are still in a strong position to lead a rapidly transforming marketplace, top banking figures said yesterday.
They were speaking at the opening of major industry event Sibos 2015 held at Marina Bay Sands.
DBS Group Holdings chief executive officer Piyush Gupta urged his peers to embrace the "new world order of technology".
Innovations such as cloud computing and peer-to-peer services are forcing banks to rethink their businesses and infrastructures. "But the best-placed people to be able to leverage this change are the people in this room," Mr Gupta said, speaking to 1,400 people at Sibos' opening plenary session.
More than 8,000 financial industry players from across the world have registered for the four-day event. One of its key themes is technological disruption to banking.
The industry is feeling the heat from non-bank tech players such as Internet giant Alibaba, whose payment platform Alipay now processes 80 million transactions a day, while its mutual fund Yu'ebao became the fourth largest in the world in just eight months after its launch in 2013.
"People talk about disruption, but the word to think of is transformation, which implies the incumbent can make a change," Mr Gupta said. "The reality is that all of us have an opportunity to lead the transformation, to make a real change in the customer experience. There is no one in a better position to do this than we are."
There is still an enduring perception that banks are the place to entrust a large sum of money, he said, adding that banks are unmatched in their capability for customer data analytics and risk management.
Swift CEO Gottfried Leibbrandt agreed. "I don't think banks are going the way of the dodo and Kodak - they will not be extinct. The keyword is transformation, whether they can absorb the new technologies and use them to add value to customers. It holds for Swift as well.''
Swift is a bank-owned cooperative that facilitates secured and standardised exchange of financial information between banks globally. It is also the organiser of Sibos.
As part of the transformation, Sibos and its member banks are exploring the application of new technologies such as "blockchain" - another key topic at Sibos.
Blockchain, also known as distributed ledger technology, broadly refers to a database infrastructure that allows open and speedy distribution of transaction records.
It was part of the technology behind bitcoin and is now looked at as a potential game-changer that may revolutionise transaction and settlement systems at banks, because in theory it will negate the need for centralised clearing.
At one Sibos conference yesterday, Ms Leda Glyptis, head of Bank of New York Mellon EMEA Innovation Centre, noted that blockchain has had a gradual but profound impact on the banking industry. "(The industry) has moved on to applying the technology to solve actual problems. But to me, what's interesting is that this technology has forced us to rethink our entire value chain in a way we had never done before."
At another conference, participants had a lively debate on the future of financing amid the rise of financial technology and peer-to- peer lenders offering quick, small loans via digital platforms.
Kreditech co-founder Alexander Graubner-Mueller and Iwoca CEO Christoph Rieche stressed that their companies are able to quickly fulfil a market gap that big banks are not nimble enough to reach.
The two firms are among the smaller non-bank lenders trying to prise business away from banks via creative use of technologies. Kreditech, for instance, uses data analytics to automate credit profiling of borrowers, which in turn speeds up lending and lowers costs.
But Mr Steve Ellis, head of Wells Fargo's group for innovation, said: "How many payment firms started in the mid-1990s are around today, beside PayPal? The future (of banking) will probably end up blander than people in this room imagine."
