Photo of Cards International editor James RatcliffThis year’s Sibos saw banks feeling the squeeze. Of course banks are getting quite used to being pressurised by regulators, by politicians and the public – their customers – and in many cases their owners. The industry as a whole is acclimatising to its new position in society – scrutinised and ‘distrusted’.

That is certainly the popular view, and seems to be the one fuelled by the mass media. Banks may have taken a hit in terms of the level of trust placed in them by customers, but how many people have truly lost faith in the system? Certainly, the electronic payments infrastructure never faltered during the banking crisis. E-commerce continues to rise in popularity and the mobile phone is in fact bringing new people into the banking system. So why the big squeeze?

There is of course, Basel III and its consequences – both intended and unintended. Systemic risk reduction is certainly a good thing, but there is such a thing as overkill. Many delegates expressed the view that the extra burden of regulation is likely to cause more harm than good to an area of banking that has more than proven its stability over the last few years. We wait to see what the final reckoning will be, but the way a bank monitors and reports its positions is going to change dramatically.

Then there is standardisation – SEPA, the International Payments Framework Association and other initiatives. These are designed to make the life of the payer easier, and there is a convincing argument that, despite the extra investment required, they will make banks’ lives easier too. In the most ideological sense, it will bring everything together – everyone speaking the same language everywhere.

In less hippy-ish terms this means increased efficiency for transactional banks, a more competitive landscape and, crucially, fundamental changes within clearing houses. With standardisation in place, will it be so important to banks who owns the clearing houses used? Will we see non-bank players buying into that part of the payments system?

Speaking of non-bank players, this is undeniably another pressure for banks. If regulation is taking the form of a (reasonably solid) brick wall, then emerging players looking to leverage their global networks in the transactional banking arena are the upstarts pushing banks against it.

With so many of them touting their wares in Toronto, it is clear banks have two ways to go – partner with them or take them on. And on that front, there was overwhelming love in the room, or perhaps it was fear, driving those partnerships forward.

The final keynote address of Sibos this year came from Brett King. We know the message, we’ve heard it before… but it bears repeating: two types of banking entities will emerge in the not-too-distant future – the banks that deliver on customer demand, and the banks that provide the infrastructure.

James Ratcliff