Financial Institutions Forum

The future is now – technology

Sabry Salman, Global Head of Financial Institutions and Non-Bank PSPs, Barclays

Welcome to all our customers, partners and colleagues who have joined us from across the world. We are live from the US, the UK and Germany, with a fantastic panel of speakers to tackle the topic of technology in today's edition of Financial Institutions Forum. 

I'm your host, Sabry Salman, and I am from Barclays with global responsibility for financial institutions and non-bank PSPs. My day job covers banks, fintechs, market infrastructure and finance sectors, so I will keep a keen eye and listen and learn from this wonderful group here today. 

Technology will be key to meeting customer expectations now and in the future. Banks must leverage the advantages of the entire ecosystem, including innovations of fin-techs. Many advanced technologies already underpin the financial sector anyway. The rise of bitcoin and a range of other cryptocurrencies has attracted the attention of central banks, which are carefully analysing the potential for their own versions. These are known as central bank digital currencies or CBDCs. 

Let's delve a little deeper into all of these topics. As I said, we have a fantastic panel here: Dr Lee Braine, Managing Director of Research and Engineering in the Chief Technology Office at Barclays; Mariquit Corcoran, Chief Innovation Officer, Barclays; and Martin Runow, Global Head of Payments and Digital, Barclays. 

So I will probably go around this group and we will debate and discuss some of these exciting themes. So Lee, why don't I come to you first? I briefly touched on CBDCs. Why don't we kick off with this topic? It's hot, It's relevant and I'm sure the audience here today are keen to listen and learn more.

Dr Lee Braine, Managing Director of Research and Engineering at the Chief Technology Office, Barclays

Sure. So we've been exploring central bank digital currencies now for about two years and during that period we've learnt a lot, particularly how they relate to other forms of digital currencies such as cryptocurrencies, for example, and how they integrate with central banks' policies. 

Now, going back to basics, it's just a digital payment instrument, but it differs from virtual currencies such as Bitcoin, in that it's denominated in the national unit of account, so for example, the pound or the dollar – and it's a liability on the central bank. 

Now it adopts many of the same key principles as existing payment systems, such as do no harm, complement other payment means, clear governance, et cetera. But when it comes to some of the benefits and the risks, it differs quite considerably and it gets radical in places, particularly in retail banking. 

The benefits cover everything, potentially from financial inclusion, dramatic simplifications and cross-border payments, right the way through to things such as programmable money. Imagine, for example, you make a payment and the tax is automatically collected via a protocol and sent to the relevant tax office. But there are risks associated with such a new technology that has policy implications. These range from, within the industry, a risk of disintermediation where you may have, for example, wallets holding these new financial instruments and they're provided, for example, by fintechs rather than via banks.

Also, such new technology has a potential infrastructure risks, security risk, even reputational risks and related to this is the idea of our existing physical central bank money. So, notes and coins come with a high degree of privacy and you can pay personally. 

If you're looking at a digital version of this, we need to ensure that the personal protection and privacy is retained in the relevant jurisdictions, and that's not technically trivial. So, all of this means that we're going to inevitably have a lengthy design period where we look at all these different options. We map the options in this design landscape to our technology choices and I think it'll probably take another couple of years before the relevant central banks in Europe, the UK and US, are in a position to be able to start then building off a design spec. 

Obviously, some countries, such as China, are already there with their solutions. They have a different approach in terms of data privacy and they're live in several cities. So, I think the opportunity for the West is to catch up and then be able to influence what will inevitably be an international collaboration on interoperability between central bank digital currencies.

Sabry Salman

Thanks, Lee. That's a good topic to kick us off and staying on the theme of emerging technologies and trends, Mariquit, is it okay if I come to you next and then maybe perhaps check in with you on what you have seen in terms of emerging trends and technologies?

Mariquit Corcoran, Chief Innovation Officer, Barclays

We're seeing significant emphasis on embedded finance. The buy now, pay later method has been widely adopted. There's been increased partnerships between large fin-techs, big tech and financial institutions. 

Embedded finance is creating new customer journeys that are solving real-world problems, and it's allowing for seamless experiences that reduce friction, and provide customers with more options to pay for goods and services from their favourite retailers, for example. This improved customer experience is subsequently helping merchants grow their customer loyalty, deepen their customer relationships, and potentially use a lot of this data later on to personalise customer experiences. We’re continuing to see a lot of emphasis in this space. 

And then there's also been a significant uptick and the focus on climate fintech and green and social finance. This is fintech that catalyses decarbonisation to reverse climate change. I know this will be discussed a bit deeper in a later session as part of the forum, but we're seeing fintechs emerging in this, working with the ESG data, working on being able to trade these carbon products and continued growth in this space. And then overall, we're seeing a tonne of IPOs and consolidation through mergers and acquisitions. This has increased significantly over the last 12 months, and we see this continuing on for the following year and then some.

Sabry Salman 

Thanks, Mariquit. I've just made a few notes, and we're going to come back on some of the topics you raised to pick it them up a bit more deeply. Martin, I'm just going to come to you next, perhaps on the same team of trends, but probably an older trend, but we're starting to see much more traction, particularly in the payment space. It's APIs, isn't it? So let me try and put the question to you. How impactful would integrating APIs in the payment world be from a client partnership and relationship perspective, i.e. treasuries and integrating treasury and banks and so on?

Martin Runow 

It's a wonderful question, and the one word answer would be ‘massive’. But you're right, API – when you talk with the more tech savvy folks in transaction banking – is not as new as it sounds. APIs have obviously been around for quite a while. 

But what we do see – we can probably debate a bit whether it has been accelerated by Covid or not – is that there's a couple of things coming together why API technology overall is still super exciting at the moment in financial services. Open banking is one of those things. And I know that's a topic for Lee, and he's been quite involved. 

But the other thing is that everything in general has become, in terms of payments, a bit more granular and quicker. Right? So payments are happening in real-time, at pace, and the API technology is it's one of those tools that allows us to connect the gig economy – the app economy – with payments, right? 

So there's plenty of use cases and it's a bit different from the classical payments sort of treasury play. This is not commercial payments per se or integrating with treasury management systems. It's really about “our client is doing something”. A large corporation – doesn't even matter which industry it’s in – is creating a direct-to-consumer sales model and, as part of that, a payment happens somewhere along the way. 

You're doing something in an app. You're getting a refund. You're getting paid because you're the driver of some non-taxi, taxi, whatever it may be, right? So, as part of that, through the APIs they need to call, you could check a balance on the account. You can go and create a payment right now and then you use real-time payments like faster payments or super instant, well whatever it may be, popping up everywhere around the world to actually initiate the transaction. So, a couple of things are coming together and it's becoming real. It's actually very, very exciting.

Sabry Salman 

Thanks, Martin. I will be moving around the panel, so feel free to jump in if there's anything particular you want to add as we go through. I'm going back to Lee again, and I'm going to throw a few phrases here and see what opportunities for banking they bring in this these sort of tech areas that are a bit cutting edge – for me, at least. I'm pretty sure you're quite deep into these topics, Lee? Quantum computing, smart contract technology, and overall digital transformation; I mean, how does this all relate to banking? And what can these technologies bring into banking, Lee?

Lee Braine 

Sure. So in our team, we spend a lot of time looking at advanced technologies, researching them and determining how to separate the wheat from the chaff. Where are the diamonds in this? 

So, looking across these, they also have timescales, of course. So in the darkness [inaudible]. Horizon one is something in the next year, horizon two, in the next two, three, or four years, or we're looking 10 years into the future. 

So the first one you mentioned, quantum computing. We're working on quantum computing for about three years. We have people in the team that are specialists on this, and I myself have published some papers on this topic. We need to be aware that this is long term, so it's something that's probably five to 10 years from now before we start getting the first real-world applications – and they'll be simple ones. 

The point here is that you exploit the power of this new type of hardware that exploits quantum mechanics. There's a key point of quantum parallelism, so you're effectively able to perform vast number of computations of various inputs in parallel and then to be able to select results from that in a more efficient way than if you were executing it on classical computers. 

So you're able to get benefits where there are optimisation problems, or big combinations of problems. For example, how to imagine a clearing house that was looking to settle a bag of securities transactions. What are the optimal subsets? Typically, you can't find the best part of the solution. You just get close enough in the time that you can. This enables you to get a better solution. 

Portfolio optimisation could also be improved, and an obvious one that quite few banks have looked at is using quantum computing for complex risk models. Some of these take many hours, even if you're running them on 10,000 services in parallel. 

However, against all of this, we need to come down to earth and current quantum computers that can do general purpose computing only have in the order of a few tens of qubits. So we can run proof of concepts, demonstrate that certain theories are achievable, but not scale it up to be able to use it, for example, on practical data sets. So, interesting but not there yet. 

Other topics. So, if we look at smart contracts, it's something that is real and it's – that they run now live in production in various institutions. For ourselves, we typically participate via consortia, smart contracts typically sit on top of distributed ledger or blockchain platforms. They're a way of implementing automated processes with common code at each party. So it's great for driving standardisation, removing variation from the industry. You implement once and deploy everywhere. 

So initiatives include clearing houses for credit default swaps. They include payment solutions. And, as the years go by, you'll see them deployed more broadly. Effectively, the industry had a pause of about two or three years where it was necessary to build up the consortia behind these. 

Another topic you're mentioning touches on standards. And here, there are several that can be viewed as innovative and they are genuinely, for the first time, driving common agreement and enabling a foundation for new market infrastructure solutions. 

The one I would highlight is the ISDA Common Domain Model. Started with ISDA, it's now being leveraged by other trade associations such as ICMA, started off with derivatives and then moving into repos and bonds. We can't endorse it enough as an open standard. We're involved in industry solutions on this and, even within ourselves we promote it via hackathons. 

It covers the whole lifecycle. So it's not just data standards. It's what is the standard for life cycle, the steps in a process. So, that enables us to be able to almost transform legacy and radically simplify. So these are the types of topics that are using the latest technologies and techniques in banking. What you need to do is to have some healthy scepticism when you're looking at the various propositions and technologies and to be able to influence the solutions, so that, effectively, they're fit for purpose for highly regulated institutions and not just research technologists.

Sabry Salman 

That's really helpful, Lee. And I had my intellectual curiosity delving a bit deeper into these horizons. There's a lot of regionalisation happening in various sort of trends and themes. Do you also see that happening with technology? So, most of the technologies you discuss feel like it needs a global view, around it and collaboration and connectivity across the globe. But do you actually see more regional isolation of certain technologies, developing in their own way?

Lee Braine 

Yeah, I think it's different for different technologies. So, when we look at the standards, it's great that we've got international trade associations such as ISDA driving that forward and the participants in this come from across the globe. 

Effectively, you want to avoid fragmentation at all cost. Other areas that are very much in the research accounts, such as quantum computing, there is very much a regional, per-country approach to this. So you look at China recently putting $11 billion equivalent into their quantum computing initiative. The UK has its UK Quantum - National Quantum Centre. Actually, this week it's being opened up. The relevant minister is cutting the first piece of grass where the building is going to be built. In the US, they're investing heavily. 

What we've noticed is that the collaboration there tends to be more academic and also where you have a major fintech. I would say one of the large big techs that's driving that. In all cases, I've observed the internationalisation benefit to the industry rather than a parochial, customised local version.

Sabry Salman 

That's really helpful, Lee. Thanks. Thanks for that commentary. Mariquit. I'm going to come to you on one of my favourite questions, but this is a really old question and it keeps getting asked at any forum we attend, particularly in the last two years. And that is around partnering banks and fintechs. We keep hearing about this a fair bit. How important is it for financial institutions to partner with fintechs, i.e. to use their technology so we can build everything? And do you have a sense if these partnerships will actually grow over the next few years?

Mariquit Corcoran 

My favourite question and, in one word, yes, yes and yes! I think we've moved past the period where we're going to work in silos and that fintechs are going to operate on their own and banks are going to do their own thing. 

I see partnerships only growing. We're navigating in environment where financial institutions see their fintech partners diversifying into new products and services where they may not have competed in previously. And at the same time, I think most of these fintechs are realising they're never going to be able to grow their customer base in the way they can if they partner with financial institutions. 

It's a win-win for both parties. I think as a large banking organisation, we realise there are some technologies out there where we are better off partnering versus building on our own. And I think on the flip side, the fintechs are also recognising that they can create growth targets and whatnot, but they're never going to be able to grow in the scale that they can by partnering with financial institutions. So, yes, I see this continuing on. Yes, I see this growing. Yes, I see this as incredibly important for the future success and growth of the industry.

Sabry Salman 

Do you find that the pandemic has been a catalyst in either way? Is there a sort of pivot point caused by the pandemic?

Mariquit Corcoran 

I think the pandemic has forced us to really go digital and it's tested a lot of our businesses. We saw winners and losers come out of this and inevitably we saw businesses struggle, right? There were capital constraints and funding constraints. But then we also - – even from our direct experiences – saw businesses that were struggling pre-pandemic. But all of a sudden they had a solution that became crucial to the market and their businesses grew, their client base grew and some of them were acquired.

And so it was definitely a catalyst for digging deep and seeing what are the services people need? What are the products people really have to turn to in the environment that we were in and still are in? And we saw even more and more of this grow and I think it's going to just continue on post-pandemic.

Sabry Salman 

Thanks, Mariquit. Lee, I saw you nod when I mentioned the pandemic. Has that been your sense in terms of the emerging technologies as well?

Lee Braine

Yes, there are a few topics where effectively you could argue that digital transformation should have happened sooner and maybe they've been laggards or actually, the pandemic coming along has driven that change out of necessity and the fintechs just happen by serendipity to have a product in this space that had potential and then they would suddenly get attention. 

I noticed fintechs reaching out to us in April-May last year, where they were saying, actually, here's something that's in this space. You go through the loop of – well, actually how long would it take to get integrated, deployed and so on? And it may not address the current problem of a three-month lockdown. However, it kicks off the conversation and then you start the process. 

So I think they've been able to leverage, let's say, a situation that occurred and given them the step up and, as I said, I've been contacted by some fintechs that have been able to do that successfully.

Sabry Salman

Thanks, Lee. Martin, I know this is one of your favourite topics because both the emergence and development in the last 12 months, technology and pandemic. But I think the topic that you quite enjoy talking about is this sort of whole ‘stay connected’ theme, isn't it? I know this is a broad area – pandemic, technology and staying connected and there's a lot you want to say – curious to know what your thoughts are.

Martin Runow, Global Head of Payments and Digital, Barclays

Well, I'm going to home in on the human element of actually banking and finance but before I do that, I've actually had that conversation with a few colleagues and clients alike. 

I am old enough to know the sound a dial up modem makes when you're sitting in a hotel room trying to connect to a telephone line? I'm seeing some smiles. A lot of us are, right? And if this pandemic had hit us 10, 15 years ago, it would have been much, much harder for all of us to actually do our business. And I'm sure we would have prevailed. It would have happened somehow. But the way that technology has helped us get through this, with the WebExs and Zooms and Microsoft Teams and whatever else is out there, just being able to actually work from different locations but still working collaboratively has been quite amazing. 

And, in that sense, the staying connected theme has obviously moved and I am a huge proponent of actually having face-to-face meetings. That's where – especially the bigger, dicey more complex topics – getting a few people in the room, being controversial and brainstorming and agile in the wider sense is massively helpful. 

But we managed to transport a lot of that spirit into sort of this digital realm and get a lot of that done through Zooms, et cetera. So, I've had plenty of meetings and we all probably had to go through this adjustment phase of having only meetings, right? So yes, you don't have to commute anymore, but doing 10 hours non-stop on Zoom or WebEx, it's not a great solution either, right? It does help to get up and walk and do that, whatever your coffee brand is, run and get something. 

So we're all been adapting through this. But I'm very happy that we managed to, I think, as an industry, keep the human touch, the interaction of staying connected piece alive. I'm obviously very, very much looking forward to seeing , well, you guys here and all of you on the webcast, in person and seeing my team in person as we all slowly kind of come back to this hybrid world. 

So, I was just thinking about how this technology has actually helped us stay connected and maybe, to a certain extent, broken down some barriers. 

And here’s my final reflection. Before, we were a very London-based organisation, very London-centric, ourselves, right? And obviously we have teams that are across the globe, but there's always been sort of this unconscious bias towards having people in the room that are in your location. 

And this has all made us much more equal, I would say, in the sense that it actually doesn't matter where you are – if you conducting your business from your kitchen counter or from your sofa bed or whatever it may be. 

Keep this in your head. It's really hard to follow stuff when you're the only person on WebEx and everybody else is in the room. So, let's be conscious of that and keep sort of bring the spirit back in as we all go into , I think, quite a different hybrid type environment in the future. Sorry, a bit lengthy, but it's a very interesting subject.

Sabry Salman

It really is, Martin, and I'm glad you brought the human element to our theme of technology because that's a kind of secret sauce, isn't it? I am going to press you and, maybe you did address this, but I'm just going to double check with you. As you get back into what I call ‘in-person environment’ and hybrid, what is it, in the last 12 months, that you really think worked that you don't want to give up now – just because we're going back to potentially ‘the good old days’ or potentially to a hybrid world?

Martin Runow

But what I did like is – and again, it took us a bit to get into the rhythm – getting stuff done in sort of this collaborative but digital way without getting too hung up on meeting room bookings, travel, even long commutes, et cetera has been actually quite refreshing. So I want to keep some of some of that going and really be more conscious about where does it make sense to actually be together in a room? So for me, that is real brainstorming sessions, or doing strategy work where you need to be, or where it would be beneficial to have the different opinions actually in a room and to keep going in. 

What has become much less, I would say, is being in to be seen that you're in, if you get my drift? So this necessity to sit there and do your hours – or perceived necessity, I should say – it's never really been a necessity, in my view. I think that's gone down massively. 

So for me, I want to keep this: ‘Let's collaborate, let's do stuff, let's be more spontaneous.’ And as I said, also keep the ‘let's be connected’, despite us being in different locations. That's a big, big keep for me. And then harness the collaboration, the innovation power that you have when you put people in a room and then we'll find the happy medium. We've had that conversation before, right? Does it make sense to get everybody into the office? But then, for everybody to then be on WebEx for 10 hours, that's probably not so useful. So, be conscious of why you bring people together.

Sabry Salman: 

Wise words Martin, and it's a topic on its own. Thank you for the sharing that. I'm going to go back to innovation, but we can't forget the theme of start-ups, right? And that's a key sort of area and fintechs. So I guess I'll go to Mariquit first on this and I'll come to you, Lee, on this topic as well, because they're similar themes between the two areas. Start-ups within the fintechs world are very agile and we keep complimenting them for being agile – as a traditional institution, as a bank. But what can we really learn from these practices and how can we actually follow suit? I mean, we've heard a lot of compliments, but I'm not seeing that translating into ‘how do we change? How do we adapt and follow?’ So Mariquit, over to you first. What are what are your thoughts?

Mariquit Corcoran 

Pre-Covid, during Covid and now post-Covid (if that's the term we want to call the current state we're in) we always said we have to think like a fintech? We have to be agile. We have to think like a start-up. In a lot of ways, I think COVID proved that financial institutions can be agile. Big complex banks mobilised entire organisations to focus on fewer critical priorities. We went virtual practically overnight and, for the most part, things move seamlessly and we're able to operate and execute. I think we really tested ourselves and our ability to do that. 

To Martin's point, if this happened 10 years ago, we would have probably pulled through but it happened at a time when we could do that and really flip the switch pretty quickly. I think around this whole mindset there are really two main ingredients; we've got people and processes. The entrepreneurial mindset is hugely valuable. You can train people, but that's not enough on its own. 

You have to evolve the way your organisation operates more fundamentally to cut unnecessarily complex processes. And you need to empower decision-making and risk-taking at appropriate levels. That's how the fintechs operate. That's how start-ups stay agile and nimble. And we do need to continue to focus on making sure that our culture and our environment is that way as well, no matter how big or complex our organisation is, and we need to empower our people to do that.

Sabry Salman 

That's a good reminder around how we kind of flipped overnight in terms of virtual. I think it's a great sort of reflection of how things can be done, isn't it, Mariquit?

Mariquit Corcoran 

Absolutely.

Martin Runow 

Sorry, I have to say ‘geek fact of the day’ is the agile manifesto turned 20 this year. So it's not that new.

Sabry Salman 

I was going to ask Lee the same question in terms of start-ups and sort of innovations that we can learn as financial institutions. Have you seen the same observations as Mariquit in your world?

Lee Braine 

Yes, indeed. On Martin's point, it's interesting that agile is now ‘legacy’ after 20 years. So in terms of start-ups my experience is really that they're lean, if we're looking at their attributes, and because of their leanness they get their agility and many other things. And this isn't just in terms of bureaucracy, but it's also their project lifecycles, the way they're able to fail fast and pivot, the software development methods that they use. The way they leverage cloud by default i.e. ‘cloud native’. 

They get all the software development efficiencies for free from using those environments. They use the very latest technologies almost by default as their method rather than teasing out from a later standard. They're unconstrained by legacy thinking, typically, in their initial developments. 

Their enthusiasm is infectious and that's great. And they are ‘can do’ rather than ‘why not?’ So, it may sound rather trite, but it's true. And being exposed to that, I think benefits staff from institutions, so we can be inspired by the new product ideas, the new technologies and so on. 

And I think the onus then becomes on institutions themselves, – how can they adapt and innovate? So it's really how do we partner with them to learn from them from that? So we use a number of techniques, particularly in the markets area. We dip into the techniques that they offer through that space. These range from conducting proof of concepts (POCs) for the simplest of the fintech products, right the way through to conducting hackathons from our innovation hubs and, participating in fintech accelerators where we'd have, for example, technology architects reviewing these proposals that go through and then afterwards providing some mentoring support.

It actually works two ways: that the lead architects are getting exposure to the absolutely latest ideas and the fast ways of working. And then actually some of these fintechs, in the longer term, end up being located in our innovation hubs. So, we're able to work near them in day-to-day jobs and again have interesting water cooler moments and so on. 

And then, probably at the furthest end for deepest partnering integration, is investment. So, particularly strategic investments where you can work on collaborative ventures. And it may be – there's always the hub and spokes where you've got a group of banks that maybe want to work on a particular idea – a fintech is the way to drive it forward. They can partner and each take a small equity slice in a fintech to drive that solution forward for them all to use as a non-differentiating collaborative solution. 

So I think the point here is how to mix the different parts of institutions with these rather small fintechs – what are the possible ways of interconnecting? Over the last few years, I think it's been great to be able to dip into all those different ways of connecting with them.

Sabry Salman

Lee, are there any public examples that you can share that have impressed you and excited you over the years?

Lee Braine 

Yeah, sure. Well, there's several. I can pick a couple in our space of the distributed ledger. For example, our Ethereum consortium where it kicked off with 40 institutions. A more recent one would be Fnality wholesale payments, where you've got each of the banks taking a small percentage share – I think there are 15 financial institutions involved in that. 

It always starts off as a very small fintech with some good ideas that can progress much faster than any institution, plus it makes it much easier for us to donate intellectual capital to that new fintech, knowing that we then have equity in it. So you get much greater collaboration within competition law in order to help the fintech progress at pace. 

And I think it works particularly well. My observation is being in capital markets space. So, for example, post-trade. It's kind of a natural model where there'll be a third-party. So you can imagine clearing houses connecting with the fintechs to be the tech supplier, maybe, for example, with a request for information and so on, kicking it off. So I've seen that succeed several times.

Sabry Salman: 

Really powerful examples, thanks for sharing, Lee. I'm going to shift into a lower gear, a smaller gear – payments. Martin, during 2021, what kind of payment innovation, demands or developments have you seen and expect to see over the next 12 months horizon. What's keeping the payments industry excited and chugging along?

Martin Runow: 

It's quite a loaded question, Sabry but it's also wide enough for me to pick a couple of things that are interesting 

So I mean, in terms of larger trends, I think very easily observable to all of us as consumers on the retail payments end is a move away from cash to card/mobile. So, tap and contactless. We've seen limits go up basically everywhere around the world and usage has gone up massively. 

Much to my dismay, we're still seeing a lot of people write cheques. So, volumes have gone down through Covid times, but I mean, that's very much a UK and US topic, I would say, more so than most other economies. But it's still there, although it has had quite a dent put into it, especially since we're talking about people working from home, et cetera. Getting cheques signed in person by someone else or several other someone else's is certainly not great. 

I'll talk about stuff that's been happening. I did touch on APIs that's real-time already, right? So, I see that as a very interesting accelerating trend in general, right? Payments are becoming more granular, so there's more of them. The overall average amount is going down by people tapping or you have lots and lots of large corporates during COVID deciding that a direct-to-consumer business model makes total sense. Why sell to a reseller when you can sell direct? So, there's a lot of movement and, I would say, talk about fintechs as well. 

The clear differentiation between “this is cards, this is online, this is retail, this is wholesale” has a lot of grey in the middle now, right? So you can see that all the large players in the card space are looking at acquisitions. 

In general, I had said at another conference, payments are hot. I think that's definitely true. The payments market is crazy hot, right? You see acquisitions and mergers and valuations just go through the roof. So that's super interesting. 

If you look at wholesale payments, there's a lot of stuff happening in this sort of community interbank space, and a lot of that was represented in correspondent banking payments by SWIFT, obviously – often sort of the man in the middle. And so there's a lot of work that is going into that but also exciting things that are happening in cross-border payments when it comes to creating a much richer experience, a better platform play in the middle. 

And then down to staying compliant, everybody is moving to the new language of payments, ISO 2022. Again, XML has been around also for quite a while, and it's also been there and used for payment messages. But it's coming in for real and everywhere now, and now talking about legacy, like real legacy (not like the agile 20 years). All of us in the industry are finding that it's quite an involved process changing the language of payments from what used to be very simple, good old, very fixed SWIFT messages to something a bit more rich, which has all the upsides that you could do way more with. 

You're going to have all kinds of data. Scientists have a lot of fun with this richness of data in it but you have to basically touch every system in the whole change that works and has anything to do with processing payments. Just looking at ourselves, and I know from a lot of conversations with plenty of people on this call that it's the same for everyone, it's a huge, huge process. 

And time is – well, it's a few years, but we are going live with some of these changes across the industry next year or by the end of next year. So it’s a lot of work that goes in and I'm hoping – it's a bit more than hope because I'm seeing signs of it – is that people don't just focus on being compliant but focus on really adding value to the industry, to the community, to our clients and customers at the end. 

So, there’s API real-time, the language of payments, ISO and, in general, lots of stuff happening in retail. That is my wrap up.

Sabry Salman

I think you structured that answer really well, Martin. There's a lot of topics and sub-topics there and all link into each other. Thanks for covering that. 

Lee, in the same vein, what's your team busy with at the moment? What's keeping them excited?

Lee Braine 

Yeah, sure. So we mentioned some of the technologies already. I would say it's certain areas of using these technologies. So, distributed ledger has been around for a while, but there's the idea of tokenisation. So there's a trend towards identifying how you can take either traditional assets or new assets and tokenise them and then put them on a distributed ledger in order to, for example, increase the market or the liquidity for market, or the access for participants to that market. 

And that also enables some disruption in the ecosystem. So, new providers can provide those services and they can even be decentralised in some cases. So, you don't have a specific actor providing services – a piece of software is released and then leveraged by multiple parties. 

Some of this falls under the umbrella of digital assets and I think many banks are exploring the boundaries of digital assets. One we touched on earlier is central bank digital currencies (although BIS, for example, I wouldn't consider to be under the banner of, say, a stable coin) but as you move up the boundaries towards more virtual assets, regulation is changing and it's not clear. 

And I think there will be opportunities coming up as certain regulators, such as the SEC, look to clarify the regulations in that space. They , for example, identify this should provide opportunities for the whole industry as consumers would have greater clarity. 

Process automation is hot for us and this isn't just the opportunities to strip out inefficiencies, but also some of the technologies, such as leveraging machine learning for that process automation. This could even include things such as chatbots that could be put in place, right the way through to intelligent agents that are able to learn from following what humans are doing through a process. And then from that you can drive, for example, decision trees. 

More broadly, AI and machine learning, for example, fraud for cards. So a key topic going forward will be not just the ‘use’ cases, but the governance around AIML going forward. So, there's an increased attention from regulators to have the governance in place for managing the risk management model, and I think that will increase going forward for time spent. 

And then finally, I'll just highlight cloud. I know it's a broad topic, but it's incredibly important to be able to leverage that appropriately. Everything from, for example, multi-cloud strategies and a way to leverage that, right the way through to getting the latest and best security protocols implemented for what you need. 

I think there's a lot of emerging technologies and the number is increasing over time, and I think there's been a big uptick because of fintechs. They're showcasing many things to us, so it's almost like we need more bandwidth because of the tsunami of ideas that come into financial services. But that can only be a good thing if you're looking to innovate.

Sabry Salman

Lee, you just reminded me we have to have this sort of session every month to get a complete download and education. I mean, the three of you have just opened up so many avenues of thinking and it's hard to keep up with this stuff as well. I mean, it's your day job, but I think for many of our colleagues and customers tuning in today, I think it's been an incredible education, not just on technology, but on the sort of innovation side and the concepts there. 

Mariquit, I've got a question from the audience around women in tech. But before we come to that, and I know we have a bit of time, you mentioned embedded finance in your first question in terms of the trends and themes. I've made a note to follow up on that. Maybe just share a bit about what you're seeing in this space around embedded finance and what's exciting you?

Mariquit Corcoran 

I think you mentioned earlier, embedded finance is really creating new customer journeys that are solving real world problems; the relationship between start-ups and consumers and large financial institutions. There's a win-win proposition for everybody involved. There's reciprocity in this for everybody in terms of the benefits they have. 

A clear example is point of sale finance. When a brand partners with a financial institution or fintech on an embedded approach, the customer experience is seamless and quick, right? We see this ourselves as consumers. We benefit from this. 

We no longer need to navigate through a series of separate bank websites. We don't have to log on, wait for an advisor to phone us back to confirm a loan, then go back to the product, sign to confirm a purchase. Not that long ago that's what we had to do to perform these transactions. 

And really, embedded finance is streamlining all of this and helping make that customer journey frictionless.

Sabry Salman 

I agree. I think it's fascinating how we have this, particularly on the sort of point of sale aspects. Mariquit, I'm conscious of time, so I want to take this question because it's an important one. It's around women in tech. And I guess we have many role models, appearing and yourself included, but from your perspective, do you see this as an increasing trend for women moving into technology careers? Or do you think there's a lot more work to be done here?

Mariquit Corcoran

Both. So, I do see an increase of women in the industry, but there's definitely a lot more work to be done. We're very actively meeting with candidates across the board and really fostering that mentoring and openness to try to find that talent and encourage even the younger women in the population to really focus in these industries. 

You're seeing a lot of young women study this in school, but we're not necessarily seeing all of that translate into careers. And so there's a lot of focus on that by Barclays and, I think, the industry as a whole to recognise the importance of this. 

I mean, from an overall market perspective, I think the products and services being created in the market need to address all the customers we serve. So greater diversity in who's building these products, developing these products and investing in these products is good for everyone. 

We believe, for example, in our space, that female founders are fundamental in disrupting financial services. They're creating the products and solutions that are more representative of a broader range of users. So we actually, at Barclays, created something called the Female Innovators Lab in partnership with a VC, a venture capital firm called Anthemis. 

Our focus is helping bridge the gender funding gap. Less than 3% of venture capital money goes to female founders of early-stage businesses. So we launched the Female Innovators Lab in 2019 to address the gender funding gap and support early-stage fintech founders, bringing their concepts to market. We want to help support female founders within all areas of the fintech ecosystem, and we feel that creating gender equality in the start-up industry and recognising that diverse founders are fundamental in developing these tech solutions will just build a more inclusive financial services future.

Sabry Salman

That's a topic we'll keep coming back to, Mariquit, in the series here. But thanks for covering that here on the technology theme today. Why don't we try to end with a very broad topic, maybe with a few thoughts from each of our panel members, and that's around creating a culture of innovation. I mean, we probably need a whole hour for that again. 

But I wouldn't mind just going around the panel and perhaps just looking for some practical solutions from you or practical tips even in creating a culture of innovation within our respective organisations, particularly those who are tuned in today. And any closing comments from you as well. We'll do both together. So perhaps, Martin, I'll come to you first this time. Sorry if you were gathering your thoughts there. But keen to know what tips you would give around culture of innovation and in closing thoughts.

Martin Runow

It's actually hard. I mean, it's easy to give a couple of catchphrases like ‘feel fast’, ‘be agile’ and ‘every idea is interesting’. I'm not dismissing it but how you do that in a large international organisation that sits in a very regulated industry is actually much harder. It's not too hard to create – if you think about it as a funnel – it's not so hard to run good ideas. But as a product manager by trade, it’s hard to actually turn these ideas into a business case and then to realisation. It takes much, much longer than these nimble fintechs we were talking about, that just are much quicker to go for it. So, I think it is actually having – or creating – an atmosphere where you welcome, and are interested in, ideas. 

I call them ‘out there’ ideas, right? It's stuff that you probably will not be able to do or want to do next week, next month. Then you need to try very, very hard with a lot of people to turn the realisation that ‘sometimes you have to disrupt yourself to actually have a future’ into, ‘let's actually do that and put at risk revenue lines of existing business because the alternative is that you won't have a business.’ 

So it's like this; disrupting yourself is something that intellectually every manager understands. It's something that institutionally is very, very hard to do, right? So it's a bit like getting the ideas out and then picking the ones that will really make a difference to the organisation, to your product set, and then go and fight the good fight. 

Sometimes it's actually much easier than you think. Sometimes it is quite tedious. 

And then my final recommendation is tenacity. You have to keep going. If you really believe in it, you have to follow it through because you're going to get all the arguments – including the good old funny ones – ‘We've tried all that before, it never worked, and we've never done this that way, blah, blah, blah,’ right? So you've got to plough through that and stay on course and be tenacious.

Sabry Salman: That's excellent, Martin. That's well summarised. And thanks for those thoughts. Mariquit, I'll come to you if that's okay on innovation and culture.

Mariquit Corcoran: 

Absolutely. Look, I think the way we need to think about innovation is a lot of times we think about it as this massive transformational change every time. But it doesn't have to be that, right? It can be a bit more practical. Empower your teams to think about what they're doing. How could they do it better? What would improve their processes? Don't just do something because it's always the way it's been done. 

And then as senior leaders in an organisation, we not only have to kind of foster that type of environment but encourage people to raise their ideas, but at the same time, create an opportunity or a way for us to actually help implement those ideas. There's nothing more frustrating than raising ideas that you think can transform your business, and then it kind of goes nowhere. 

So you need to build an infrastructure in which senior leadership can hear these ideas, assess them. And they may not all work out. But if we can show that we're pushing the needle forward, that's real innovation. It doesn't happen overnight, but we need to not only empower our team members and foster this environment, but actually make those things happen and just continue doing that as, you know, we go through our day-to-day. I think that's really key.

Sabry Salman: I think it's well said, Mariquit. Thanks. Thanks for that. Lee, I think you have the last word here on innovation and culture, or last thoughts. Over to you.

Lee Braine 

Yes. Superb. Things that haven't been covered… I'd say innovation needs to come from the top, needs the executive leadership promoting innovation, and they need to be valuing innovation. That would include rewarding where innovation occurs and rewarding invention as well, through the organisation. Depending on the organisation, that may be new for large parts of it to do that. 

Also new techniques run challenges. So as Mariquit said, it's not just about the ideas, but to elicit the ideas and the challenges to implement them as well, and sponsor that. 

And regarding the conducting of proof-of-concepts, I wouldn't underestimate that. Just getting the software installed, running, and understanding it – there's a learning process and that provokes you to start thinking in innovative ways as well. So I'll just add those few onto the great list already given.

Sabry Salman 

Thank you, Lee. And that leaves me firstly to thank the panel here. Your thoughts have been both instructive and educational, so we should have more of this more regularly, and I'm pretty sure I, as your host, echo the thoughts of the audience today. It's been an incredible sort of CPD update for all of us. 

And of course, I just want to say thank you to all our customers and colleagues and partners who tuned in today. There will be some recording sessions available afterwards. But I do want to remind all those online to also fill in a short survey, which will appear on the screen as you as this event concludes. Why don't we leave it there? 

I just want to say once again, thank you for your time and thoughts. It's been great and see you soon.

The future is now – trends and other influences

Maarten van Rossum: Head of Global FIG Sales, Corporate Banking, Barclays

Good morning and good afternoon to all of you joining us here for this, our second session in the FI Forum Series. My name is Martin van Rossum. I'm responsible for cash management sales for the FIG client segment here at Barclays. As we approach Sibos again this year in virtual format, we're happy to once again be able to connect with all of our clients through the FI Forum Sessions. This year, we'll be focusing on the findings of a report that we issued quite recently, The Future of Banking is Now, and that report was published at the end of August. 

It identified three key themes throughout the industry. The first one being technology, then trends and other influences, and then there's talent. Now last week, my colleague Sabry Salman, he covered the technology aspects. Two weeks from now, my colleague Lauren D'Arcy will be looking at talent. And today, I have the pleasure of hosting a session on trends and other influences, and, in particular, in the payment space. So let me explain what we're going to be doing over the next hour. In order to get us started, I'll give a brief overview of the topic. Then we'll have a panel session just to get the view from the audience and set the scene. And after that, we'll jump right into our questions with the panellists. 

Now, it would be great if we can have as much of an interactive session as possible. There's a Q&A section on your screen that you can use to submit any questions to us, please do so and we will be trying to incorporate as many of those questions into the session as we can. 

So, with that if we look at trends and other influences in the payment space, and even if we limit it, narrow it down to payment space, it's still a pretty broad topic. And I've asked the panellists if they can maintain a 10-year horizon, looking out to what's going to happen between now and 2031. 

But before we do that, I thought it might be interesting to have a look at where we're coming from, what happened over the past 10 years and what did our industry look like in 2011. 

It turns out that 2011 was a pretty interesting year for the payments industry. At that time, of course we were still, or we were just going into the sovereign debt crisis in the Eurozone. So, the viability of the Euro as a currency was all but certain at that point. But there was another currency at that time as well, a little known currency named Bitcoin that halfway through that year hit parity with the US dollar for the very first time, and just the year before someone had paid 10,000 Bitcoins for a pizza at Papa John's online. That's widely viewed as one of the first times anybody used a cryptocurrency to buy something in the real world. And just for context, 10,000 Bitcoins today will buy you approximately 10% of Papa John's and then I'm talking about the company, not the actual pizza. So, quite a stellar performance. 

The other thing that was coming up at that point already quite heavily was e-commerce. Amazon at the end of 2011 employed 56,000 people. Today, they employ one in every 135 Americans. And even yesterday, they announced they're going to be hiring another 125,000 people globally between now and the end of the year (2021). Fintechs were also starting to come onto the scene and the most notable in 2011 was in January when TransferWise was founded, now known as Wise, and they went live – they went public – this summer in London. Their market cap today stands at £10.1bn, which is roughly a third of the market cap of Barclays. 

And finally, I found this one most interesting, the Merriam-Webster's dictionary noticed that the word blockchain was first used in print in January 2011 and, as we all know, it has been used many, many times since in our industry and in many other industries. 

So despite all these changes, though, as I look back to 2011 myself, I still make most of my purchases today with credit cards and debit cards, just like I did back then, and I will say those two cards, they mainly live on my phone now, rather than my wallet. The entire process really, relatively, hasn't changed all that much. So, lots of change and lots of things staying the same over the past 10 years. 

Now, with that bit of history, I'd like to get a view from you, the audience as to which of these trends that we're looking at will have the most profound impact on the payments industry over the next 10 years. You should now be able to see a polling question on your screen where you can select one of these trends. So, these are the trends that we have identified here. The first one is format to standardisation. So, things such as ISO 20022, and CBPR-plus. The second one is the digitisation of money, things like central bank, digital currencies, cryptocurrency, stable coins. Then there is platformification – if that's even a word – of the economy, the development of e-commerce platforms, payment ecosystems and such. Fourth, there's geopolitical tension and regulation, and fifth Is data and all its aspects, including privacy, mining, and analysis enrichment. Finally, it's what we talked about last week, emerging technologies; things such as artificial intelligence and machine learning. So please go ahead and make your selection now – and from the looks of it, we are starting to get the results coming back here. We'll give it a minute.

Tim Glennon, Business Development Director NBFI APAC, Barclays 

It’s very unfair of you to have only allowed our audience to pick one of those options.

Maarten van Rossum

Yes, Tim, I'm sorry but we really, really want to draw out what people really see as the main one. And I think we have a winner here. It looks like – and to be fair, this is the one that I would have chosen as well – digitisation of money is the winner that we have. So with that bit of insight from the audience, I think it's time to introduce our panel. 

Tim Glennon is our Head of Business Development for Non-Bank FIs in the APAC and the Middle East regions. He spent the last six years in Hong Kong setting up the NBFI coverage team, and he has 19 years of experience in banking across a wide range of inter-financial intermediary sectors. We have as well with us today, Stephen Lindsay from SWIFT. Stephen is the business lead for SWIFT platforms. He leads the business stream evolving their strategic transaction management platform, which is meant to enable instant and frictionless cross-border transactions, and previously Stephen ran the standards team at SWIFT. And finally, last but certainly not least, we have Maarten Lossie, my namesake here at Barclays. He is the Head of FIG Product at Barclays and he's been working in the transaction banking industry for 19 years across Europe, Africa, and the UK. He's also a member of the BAP Payments Committee. So I think altogether, it's fair to say our panellists have a wealth of experience and many years of service in the industry that we can tap from in the coming hour. So welcome again, everybody and thank you for joining us. 

We’ll just jump right into it, if that is all right? The first question is to get a view on your respective roles and institutions from all of you. We'll start with Maarten. So Maarten, you are the Head of FIG product at Barclays. It is your job to look into the future and anticipate the needs and expectations of our customers over the years to come. So with that in mind, what does your to-do list look like for the decade ahead?

Maarten Lossie, Head of FIG Payments, Global Payments Solutions, Barclays 

Typically, my crystal ball isn't that clear when it comes to looking a decade ahead. A lot can change in a decade. And like you say, a lot can stay the same. So I think at the top of the list would be that, ultimately, the solutions for our FIG clients need to stay the same in terms of getting them access to clearing systems when it comes to cross-border payments or access to payment systems when it comes to enabling them to make domestic payments – as well as supporting them with their treasury obligations. So, those fundamental things will stay the same in terms of what I would focus on in the next decade. 

I guess, in the next five years, my list consists of the ISO migration, of course, at the top of the list and very much in the next few years APIs, especially as it relates to the platform economy. So, if we think about how the market has changed and what corporate customers and say clients expect, APIs is part of that journey, but it's not the only thing that will kind of be a priority. And I think at the moment, the third thing is leveraging the initiatives from SWIFT, so the SWIFT gpi initiatives I would say are front and centre. But I would say that is probably for the next three to four years and then the top of the list will likely change. So at the moment we still look at central bank digital currencies. We look at a range of different topics, and the priority of that list will shift over the next decade, while kind of still going back to ultimately what our clients were trying to achieve when it comes to cross-border payments, domestic payments, and treasury obligations. So that's what, kind of, we go back to every time. So, it's a bit of a cop out. I can't say what the world will look like in 10 years, but, that for the moment, is my priority list, Maarten.

Maarten van Rossum

Okay. So, well, hold that thought, because we'll come back to your view on what the world looks like in 10 years, and I think your comment about SWIFT will be music to Stephen's ears, I'm sure. Stephen, your old boss Gottfried Leibbrandt, the former CEO of SWIFT, wrote a book, recently published called The Pay Off: How Changing the Way We Pay Changes Everything. It's 320 pages long, I've started reading it, I haven't finished it, but it is a bit of a thriller. It's a very interesting book and my first question would be, have you read it? But also, how do you explain the topic of payments having gone from pretty much ‘not to hot’ in the space of just a decade?

Stephen Lindsay, Global Head of Standards, SWIFT

Sure. Yeah. Thank you and like you, I'm midway through the book and very much enjoying it actually, and I think it's great that payments is now a popular topic. You can read about payments and the payments industry in the FT and the Economist and elsewhere. And one of the points that Gottfried and Natasha are making in the book is this; everybody makes payments, right? The average person worldwide makes one payment a day and of course, in the developed world, we probably make many more than that. And yet people generally have a very poor understanding or don't even think about how the payment system operates. So making that something popular, I think, is great because it's very fundamental to our way of life. 

Why payments suddenly hot? I think it really has been a transformation over the last 10 years or so. Payments were a backwater in the banking industry for a long, long time with very little innovation going on and then suddenly, it's really taking off all over the place. And I think that's really just down to digitalisation of the rest of the economy and changing customer expectations based on that. So, the fact that we can now order a movie online and watch it right away, that we can order an Uber, we can get out and the payment is taken care of – all these types of things – I think really does contribute to the expectation that experiences will be seamless. They'll be digital, they'll be fast and they'll be frictionless. And that’s something we haven't really – or certainly didn't really achieve in the payments industry for many years. And the people who are coming into it are offering exactly those kinds of experiences. Of course, the traditional industry is now very much reacting to that and recovering and offering a great experiences of its own. So, I think it's because the general economy and the way in which people use devices, interact with one another, interact with businesses, does require a different payments experience. And that's a big driver. I think the other big driver, of course, is data. It's not a surprise that the digital giants are trying to get into the payment space as well. They, of course, have masses of data. They're extremely good at using data to understand customer spectrum and so on. And payments data is obviously very revealing about what's going on. So this is something that I think is also driving some of the newcomers, particularly in the market, to get involved in the payment space.

Maarten van Rossum

Thanks, Stephen and that data, actually – interestingly enough – that's the second option that was chosen by the audience. So the audience had a similar view there. And you mentioned changing customer expectations. 

Tim, you have the benefit of being a payment user having been both in Asia and in Europe, and I think they're quite different. How do you compare the two in your experience in those two markets?

Tim Glennon

Hi Maarten. Yeah. So, I think something that's very apparent to anyone who's spent time in Asia, and I'm sure well known to those from Asia among our audience, is the e-wallet and alternative payment methods are ubiquitous and highly integrated through use of QR code technology, which is relatively low-tech. But it enables those devices to be deployed in a number of very wide range of use cases, particularly offline, and then combining that with being embedded in their own online platforms, e-commerce systems and third-party platforms. 

They're also incredibly integrated. You can load the e-wallet from directly from within your personal banking application. You can top-up with cash via equally ubiquitous 7/11 stores and make very extensive use of rewards and coupons, which again you can spend in everything from the supermarket through to high-value purchases online. And it's probably worth thinking a little bit about the conditions that have allowed those e-wallets to flourish that way, starting with some relatively benign regulation, although that’s catching up considerably in most, if not all markets. In large homogenous markets, particularly China and India, there’s a wealth of capital available, strong demographics, and high mobile utilisation. 

But probably the key point, I think, is that some of the traditional infrastructure was not serving all consumer groups as well as it might have been in UK and Europe. They all started with some sort of killer application, whether it's enabling people to trust each other when trading internationally on e-commerce, ride hailing or free chat messaging. And once they've secured consumer buy-in with this killer application, they then scale very quickly and build loyalty by developing these much wider ecosystems where you can actually do everything from spend, insure, invest – arrange 90% of your lifestyle – all while going in through one particular app on your mobile phone, three by five inches of real estate, which is just really the competitive ground. So, that makes it pretty hard for new entrants to compete. 

But what I do think is going to be particularly interesting, I should say, I think the user experience for some of the UK and European applications that I'm personally quite familiar with is second to none and they have a lot of very kind of compelling propositions as well and are also expanding beyond payments. But I think there probably isn't space for another single, dominant full ecosystem player. And today's consumer, I think, is reasonably fickle. I think certainly in Hong Kong, it would be very usual to see somebody would have probably both of the major Chinese e-wallets on their phone. And consumers will tend to dip in to take the best of each of the ecosystem applications and demand interoperability. That’s something that we've seen done very well in the UK and Europe – it’s open banking – and how well that will be applied will determine which will be the winning platforms of the future.

Maarten van Rossum

Thanks, Tim. And I remember from my trips to Asia, although I haven't been in a very long time, I haven't been anywhere in a very long time, but when you do try to make a payment, there's a whole range of options at the till that you can use for making those payments. It's quite interesting to see what products are there. 

Well, with that I think it's time to have a little closer look at some of the main trends and the influences, which have the potential to shape the payment world over the next couple of years. Some of the ones that we looked at in the polling question as well. 

So, I'll go to Stephen on this one first. Now as the former head of standards at SWIFT, I'm going to guess that you voted for format standardisation, although data was the only one that you mentioned there but we've heard obviously a lot of the ISO journey that we're on. We've heard a lot about all of the good that it's going to bring us. I'd be interested to hear a little bit about what you think are some of the main risks and potential pitfalls as we go down that journey?

Stephen Lindsay

Thank you, Maarten and indeed, yeah, I did vote for ISO, but I would also have voted for digitisation as well. I think that they go together actually. ISO 20022 being more a tool to help us cope with digitisation than something in its own right. But I think, yeah the benefits are well known, right? 

We're going to have richer, clearer and more data end-to-end. We're going to have useful data travelling with payments, which will enable new services and so on. So, I don't think I need to spend too long on the benefits, I think those arguments have been made many times. 

But there are indeed a couple of pitfalls that I foresee. One is that we really need to think about this journey to ISO 20022 in a joined-up way. A typical payment will, of course, go through multiple systems, systems in banks, particularly market infrastructures, potentially also from customers as well in terms of ERP systems and so on. And if we're really going to get the benefit of ISO 20022, we need to make sure that those implementations in those systems remain aligned, because while ISO 20022 is great, it is the data-rich standard that we've been talking about and wanting for all these years, it's also quite complicated and is possible to deploy in multiple different ways. And if there's too much divergence in terms of implementation for payments that are going to have to go through multiple implementations, we still risk suffering from data truncation and misinterpretation and so on. 

So, even when cross-border and market infrastructures and other parts of the payments infrastructure are ISO 20022, we’re still going to have to make sure that they have compatible implementations and that those evolve, if not in lockstep, then certainly in a way that is compatible with one another. 

So that's going to be a big challenge. It's going to require partnership between market infrastructures (MIs) and banks and also orchestration as well in order to make sure that that happens. And it's not a given, it doesn't happen by magic. We, as an industry, we’re going to have to crack that particular problem. I think the other concern that I have is that many banks still are seeing this as a format change when it's really not. It's a bit more fundamental than that. ISO 20022 should be more correctly, I think, be seen as a common data model for the industry for payments and actually for the other kinds of business as well. And if you just treat it as a format, then the temptation is to simply map from existing legacy formats from MT or from other legacy formats into ISO 20022. And the risk, if you do that, is that you don't respect the data definitions, the data types, and the sort of benefits that the standards bring, therefore, are very much diluted. 

If we go from having an MT103 today, which has, let's say 50 data elements, to PACS.008 (the equivalent) that might have 200 data elements, if those data elements are populated correctly then we really can benefit in our automation, in our analytics from the data that we find in them. But if we start putting town names in the streets, and street names in the customer's name and all this kind of stuff, and muddling that up, then we actually end up further back than we were with the legacy standards. 

And that's why from a SWIFT standpoint for cross-border, we've given the community or the community has decided to take three years in which to make this transition, and our message to the community has always been take the three years. Take the time to get it right, to populate these messages and APIs with data that has been correctly sourced, and it's clean and meets the definitions, because it's only in that way that we're really going to reap the benefits that the standard promises.

Maarten van Rossum 

Yeah, and it's interesting you mentioned this fundamental change. It's not just our systems. If I think about myself and I'm sure many others on the call, you can wake me up in the middle of the night, show me an MT103, and I know exactly what it says but if you show me an ISO message, I struggle. I think it's a major change, not just for the systems, but for everybody working in the industry. 

The other thing you mentioned, diversity, that's an interesting one, especially that the global transaction banks are going to have to deal with. If I look for instance at us at Barclays as an example, we need to manage ISO migrations in a number of jurisdictions in the UK, in the US and in Europe, and not to mention the SWIFT FIN network. If you look at all of the work that will be involved in that, that could keep somebody busy for the next 10 years, at least. So, how will banks have any time to do anything else in that time?

Maarten Lossie 

It's an interesting point. And I've recently kind of tallied up how many meetings I have a week about ISO. I think it is over 20 in the last week. It is very, very significant, it takes up a lot of my time. I think the message would be that ISO is not something that we can fail at as an industry within Barclays. It's a board-level programme. It impacts our channels, our middleware, our core payment systems, how we store client information all the way down to ledgers. Basically, everything is impacted to some degree and there's budgets and priority assigned to it into reflect that, and that's how it should be. It's a critical thing but it is by no means the only thing that Barclays invests in. We don't have that luxury, we have to invest in a range of different topics and when it comes to kind of our payments story – within the corporate buying bank, Barclaycard and our retail bank – we're investing in a range of different areas. 

A good example of that would be APIs, and also the work being done on central bank digital currencies, more on the conceptual level at this stage. So there's lots going on but what I would say is that the ISO migration kind of provides me with an opportunity as well. So for the first time I've got colleagues from tech operations, basically everybody, looking at the payment engine with a big bag of money that gives me an opportunity to ask for stuff as a product manager. 

And the two things that I'm focusing on are customer-facing channels and our balance and transaction reporting capability to uplift them across all of the different client interactions that we have. So, essentially we're also trying to use the ISO migration to invest in things that needed to be invested in, that might not seem the most sexy topics in the world, like reporting. So that's an opportunity, I think, many banks can take. One key example I would give is we have a middleware component, that does all the payment validation, that is being implemented because of the ISO migration. I think that's a key driver and where investment comes from, but that same module is also going to be used for our APIs to validate when payments aren't submitted via an API. So there's opportunities that these investments and the focus on payments provides me as a product manager. And I think that's probably true for a lot of banks, but it is a bit of a balancing act to get that right. So it's a challenging topic.

Maarten van Rossum 

Well, I'm glad to hear there's a silver lining for you – I guess to quote a Dutch football player, “every disadvantage has an advantage” right? You'll know who I'm talking about when I mention that. So ISO is – obviously for us – a very relevant topic. But if you talk to consumers, this is completely irrelevant for them and ultimately for payment business, because they are the ones whose behaviour and choices are going to drive our change. The ISO is just like Stephen said, it's a facilitator there. To me, if you look at the primary driver then being consumer expectations, what do you see over the next year as the main expectations coming in, and how do you see those differing from region to region?

Tim Glennon 

Yeah, just picking up on a comment Maarten made. I think ISO is probably the best example I come across of something that doesn't sound very interesting and exciting, but actually is. And, particularly for legacy institutions, the chance to kind of re-innovate and redraw the landscape around this is very exciting for us as an industry. But as you say, the point Stephen made at the beginning around payments being hot, I think that's absolutely right. It's hot in the industry, but I think consumers also still don't care about payments really. They care about what a payment does for them. 

We also talked a bit about data but one particular element of that I think is going to become increasingly front of mind on consumers’ radar and, therefore, we, as organisations need to respond around, is data versus trust. And the payments that we make – you threw us back 10 years, Maarten, at the beginning but you can go back to when we used shells and shekels – the proposition of a payment is still about stability, exchange, transparency, certainty and trust. These things are still inherent in the proposition. And as we all know, there's an inherent trade-off often between delivering all of them but I think data offers a potential. If clients trust the institution that they're working with then they may be more prepared to allow that data to be used, and you may be able to achieve better outcomes with less compromise, so offering more protection with less friction or more tailored solutions, or advance more credit and therefore earlier settlement. And so, I think one of the key differentiators is going to be trust. I don't want to generalise too much from one region to another, because I think there are different contexts across the regions. Where, in some cases, trust is more important, in some cases people value convenience more than others. But I think winning that battle for trust, and therefore being able to use data intelligence, is going to be one of the key differentiating factors in the future.

Maarten van Rossum 

Yeah, trust – indeed, that is a key word. I think that we can link that to a question that the audience posed – or some member of the audience posed – regarding central bank digital currencies and digital currencies in general, one of the main trends, of course, that we identify here as well. They cited an FT article recently that said that the emergence of central bank digital currencies is inevitable, but maybe not optimal. If you're looking at the timelines here, it says before this will be developed and rolled out by China, by the Bank of England and the Fed and everybody else that’s looking at it – we're looking at five to seven years. So Maarten, maybe check with you, if you have a view on whether or not, as the article indicates, we are creating a threat due to the banking system with the central bank digital currencies?

Maarten Lossie 

It's a very complicated question and I guess I should've picked economics as my major in university to be able to answer that properly. But my thought on this is that with everything, when we talked about Bitcoin and blockchain, I always struggled to identify where's the friction in the market? What's the customer problem that we're trying to solve? And with central bank digital currencies – and for the first time – I'm starting to think, well, there are areas of friction which could drive the introduction of a central bank digital currency. And I think mostly they are with the use of cash and cheques – there is a lot of friction with those processes that the digital currency can solve. And I think that's perhaps also the case in point of sale and e-commerce activity. Rather than use a credit card for pool payments, a digital currency might make a difference. So there's tangible reasons to introduce it, but there are risks and I guess there's economics. Economists can talk about this with more eloquence, I guess but I personally believe that governments and central banks don't want to give up kind of the control that they have over their currency as an economic tool. And also, I don't think that governments and central banks are keen to become payment processers and kind of get into the operations of things. And that's where commercial banks play a role. So, I personally think that the banking industry is not under threat because all of a sudden central bankers will need to learn how payments work and get their hands dirty on that topic and I don't think that is something that appeals to them. So I think there's a role, but it's a very interesting thing to see how that will evolve and also how quickly that will happen. That's a big question mark I think.

Maarten van Rossum

Thanks for that, Maarten. We will add this to your to-do list for halfway through the decades to come then, I guess. So, if we change gear here a little bit. One word that I think in the past, for me anyway, used to conjure up images of rainforest, is today used a lot in the payments industry and it’s ‘ecosystem’ – whether it be the likes of Alipay, Paytm in India, or PayPal, which was one of the originals. Facebook is obviously a huge ecosystem and then there’s SWIFT. 

Stephen, if we look at these ecosystems, SWIFT itself is probably the most inclusive when it comes to banks. So from a bank's perspective, it connects more than 11,000 banks around the world. You can reach almost anybody but it is a very much a closed system. And I think increasingly as these systems all develop, interoperability is going to be much more important. Do you have a view on how that's going to develop at SWIFT?

Stephen Lindsay

Yeah, I think so, and you're right. We are a bank-owned co-operative, and of course we're a fairly conservative and cautious organisation on top of that, or rather probably for that reason. But we have grown our perimeter in terms of the participation in our ecosystem. Securities players have been part of the ecosystem for quite some time now. Also, more recently, but still quite a while ago, extended our reach directly to corporates as well. So we have in the past grown from a purely banking- oriented organisation to take on other types of entity as well into our ecosystem. But I think that there have also been, it's fair to say, some technical obstacles to doing that. The SWIFT format protocols network is very proprietary. You need fairly high barriers if you're trying to integrate with third parties and with other things, and that is something that we are very much looking at. 

My sort of current role is looking at the evolution of the SWIFT platform. We recognise that there are other interesting ecosystems out there in the digital world growing rapidly in the trade space and the FX space and elsewhere. And we recognise that we're not going to be able necessarily, or even want to, compete with those, but rather to interoperate with them. So more recent developments on the platform side have been to use open technology, to use APIs, to use all the sorts of architectural styles and so on that made these kinds of integrations more straightforward at the technical level. And that's certainly something that we see in our future as being an ecosystem, but connected into others. And we've been seen mutual benefits for both for the members of both. And yeah, as I say, our platform strategy is very much one that is geared to enabling this kind of interoperability, obviously subject to the community's agreement with the particular third parties that we might want to connect to.

Maarten van Rossum

Yeah, and I think when we were still having the physical side of those events, I think that this was quite becoming more obvious as well. The diversity of participants has changed quite a lot over the years, participants that you wouldn't have thought to attend Sibos even 10 years ago. Now it's a very different mix, which is good to see. Okay, well there's other ecosystem connections, Maarten, that we looked at – that we're looking at. The Bank of International Settlements just recently issued a report together with the Monetary Authority of Singapore regarding proposing a new system to link domestic instant payment schemes – both the system and the standards, – and it's appropriately named Nexus. So this would truly be a game-changer. It's something that SWIFT, I know, has looked at as well for connecting the SWIFT network to local instant payment schemes. We do have some experience with this in some regions in Europe, of course – that's what SEPA is to a large extent, and we have one in the UK. What are your thoughts on this Maarten? I think the desirability is clear, but what about the viability of such a concept?

Maarten Lossie

I think this is a very, very interesting development for a few reasons, but just to break that down. So I think that there's a few things in the report. I think that they've talked quite a lot about the use of instant payment schemes for cross-border payments and kind of interconnecting those, and that sounds great but my experience in supporting international payments through the faster payment scheme in the UK is that the elements, the variables to look at, are perhaps not as significant as one might think. So SWIFT actually gave me these in terms of speed, transparency, certainty, and 24/7 operations, and then the cost of processing. So thank you SWIFT for kind of setting the scene for doing these comparisons.

I think from a faster payment point of view, it's a real-time gross settlement system that we use in CHAPS. So real-time is pretty fast already compared to Faster Payments. When it comes to transparency, the transparency that we want is end-to-end transparency, and that's achieved more through SWIFT EPI rather than the market infrastructure that you use. Certainty, I think is not that significantly greater through Faster Payments when compared to CHAPS when using SWIFT EPI. Again, that confirmation is there, so I don't think there's a big delta there. The big difference, I think, in using Faster Payments to CHAPS is 24/7. So, if that's something that is appealing to a bank that wants to improve their international payments capabilities, then that is really something to focus on – the Faster Payments solution. When it comes to cost, there is this assumption that because it's a domestic scheme, payments become cheaper, and that's not the case. For us, the investments that we needed to make into Faster Payments to process cross-border payments are so significant that it is equal to processing a CHAPS payment at the end of the day. So, it's not necessarily a cheaper mechanism. It's just an additional mechanism. So I think the Nexus report, in focusing a lot on interconnecting instant payment schemes, is perhaps kind of focusing on the wrong thing. 

I think that's what's very interesting from the Nexus report is having a global ACH at all or a global market infrastructure at all that everybody can connect to, especially if that's driven by the FSB, the CPMI report and kind of the Bank of International Settlement. If it is a kind of government and regulatory supported initiative, and is supported by the industry rather than perhaps a commercial enterprise (we've seen quite a few of those) that’s something that could take shape. So, I do think that the report is very interesting – the instant payments part of it is not necessarily what they’re focused on. I'm very interested to see where this is going to go, how it’s going to develop and it's certainly something to keep an eye on.

Maarten van Rossum 

Yeah, thanks Maarten, and it's interesting. Indeed, there's a certain expectation that comes with instant payment schemes. The first one, obviously being speed, but the second one being low cost. And I think it's indeed a very valid point that the cost expectation might be not realistic. 

Indeed. Okay, well, on to something entirely different then I think. If we look over the next 10 years, one of the most important changes and most important drivers behind business in general is going to be ESG, in particular the challenges of climate change for all of us. But I have to say I struggle sometimes to relate that topic back to the payments field. It’s difficult to look at that. There’s a lot more – especially on climate change – impact around the lending and financing than it would be around payments. But one area, which I think is quite obvious from a payments point of view, is financial inclusion. Tim, I was going to ask you if you see the proliferation of e-wallets and mobile payments that you talked about in Asia, has had a huge impact on financial inclusion in the region? How do you see that developing across the region and more broadly over the years to come?

Tim Glennon 

So, I mean, I think, with fintech in general (and that this can be fintech within traditional banking organisations – we've seen Standard Chartered launch a digital only banking operation in Hong Kong, for example) when you start from scratch and redesign, then there's an opportunity to set the business model up to support segments of consumer groups that weren't being served well in the past and we’ve seen numerous examples of that abound. Obviously, the advantage of not having legacy infrastructure capital requirements can mean that you can get to consumers in a profitable way and then support them as they grow. Just as an example, something we spend quite a lot of time doing is helping companies that help their small to medium enterprises export by riding the e-commerce wave that you talked about Maarten. It's absolutely exploded across the region. You've got relatively small, maybe family run, operations pretty much run out of their own house, and now they need a global banking network because it's difficult for them to be well-served by their own local domestic bank. 

And so [inaudible] are popping up to trying to serve that need at kind of consumer retail level and while it's making it very easy for people to save and invest, almost fractionalised investment, in global money market funds at the touch of a button. Yeah, I think it's common within these SME businesses I talked about earlier. The business banking will be done by the caring member of the family. And so they're doing all of their banking in the evenings and weekends, and access to those services 24/7 is really important. 

Just personally, anecdotally, in Hong Kong when the large Chinese e-wallets and Alipay and WeChat Pay opened up the Hong Kong-Philippines corridor, it's become a huge admissions corridor. They completely cornered the market and in a very short period of time. I'm sure it was very clever, but I don't believe that it was because it was any specific technological innovation, it was good use of partnerships and a very kind of slick interface. But the real reason that these migrant workers flocked to use the service was because it gave them back 2.5 hours a day in their only day off of the week, rather than travelling, queueing up to then be charged exorbitant, untransparent FX fees only for the beneficiary of that payment to have the same thing happen to them at the other end. Very quickly via mobile app, they can send and confirm money back with the family. I'm very happy with the same. 

So I think, just sort of looking forwards, many of these larger institutions have financial inclusion part-baked into their own mission statements and they have been there since those organisations were launched. But there's significant government pressure around this topic particularly in the Asia region, but I don’t think it's unique to there at all. And just consumer expectations are so much higher in this area that it's in companies’ enlightened self-interest to fully embrace ESG, and financial inclusion within that, as a topic. 

In my personal view there are a couple of large and particularly the kind of fintech-like organisations who've invested very heavily in building out distribution across many of the emerging markets, while also investing in the developed markets. And I'm sure that that was quite a high-cost infrastructure to build but as they tie those propositions up, I expect they will do very well by continuing to do good.

Maarten van Rossum

Thanks for that, Tim. It's interesting, indeed. And it's one of the main drivers as well behind the G20 focus on cross-border payments under financial inclusion. It's interesting to see how the industry is already getting ahead of that and coming up with these solutions themselves. 

But we're coming up to the end here. We've got another 10 or nine minutes left. So I think come up to the fun part I mentioned earlier Maarten when we look at the future in general. So, we all know that the only people that can look and predict – accurately predict – the future, are of course The Simpsons and for anybody else trying to do this, it's a dangerous activity. But nevertheless, I'm going to ask you to give us your best guess at what's to come over the next 10 years. What does 2031 look like for us? And Maarten, I'll start with you if you don't mind on that.

Maarten Lossie

Yeah, so I guess the first thing to say is the migration to MX will take about five years. So that takes us to the second half of the decade, or 2026. A few other key developments; I think financial crime prevention will get a lot better and more effective, due to digital identity and the use of LEIs. I think that will be a big thing in the next 10 years. I think correspondent banking will be alive and well, but it'll change shape a bit. And I think the move to kind of connecting regional market infrastructure sizes and domestic market infrastructures is a development, so P27 and the Eurozone et cetera. I think that's the thing. And then I do think central bank digital currencies will replace at least physical cash, but whether it will replace electronic money and electronic payments, especially after all of the investments over the next five years, that's a big question mark. And lastly, I'd very much like to have an autonomous electric car. That would be really a nice addition as well. But again I also wanted the hoverboard. So let's see.

Maarten van Rossum

The hoverboard – I'm still waiting for, for that one – yeah Back to the Future. All right, thanks for that Martin. Stephen. How about you, what are your predictions for the future.

Stephen Lindsay 

Yeah, I think that I agree with a lot of what Maarten just said actually. I think that we are going to see market infrastructures changing their scope becoming 24/7 and joining up together and that’s going to be necessary if we're going to meet the needs of the users of the payment system in the future. And I think that again, customer expectations are going to be the driver there. And I think that ISO 20022, [inaudible] once it's there, it's going to be a key enabler for those kinds of interoperability and interlinking. I think we are going to see the CBDCs and cryptos coming into the mix as well. I think that's not to displace existing instruments but alongside. 

So, indeed, we will still be talking about how do we manage interoperability and how do we make sure that these things can play nicely together, just as we do today with message formats and so on. When these new instruments come along, they will additive to the mix of options that we have for making payments. And market infrastructures; I think like SWIFT and others will play a role in trying to ensure that that interoperability as well. 

So those are the things that I kind of foresee. Things getting faster and things getting more frictionless, and moving very much to 24/7 operation where it doesn't exist today in the cross-border space. I think that will come as well. And as people build out the capabilities in their domestic schemes and in their domestic processing, they'll be able to apply those same technologies to cross-border as well. But yeah, more ‘faster and quicker’, more data and more seamless experiences.

Maarten van Rossum

All right. Thanks. Indeed, data coming back there, having been one of the main things identified at the beginning. And finally well, Tim what do you see coming at us for the next decade?

Tim Glennon 

10 years out, we'll look forward to looking back and seeing how wrong I was, but digital currency – central bank digital currencies – the train has fully left the station. I agree with the panellists, I don't think governments want to be arbiters of credit. I don't think they want to design bespoke front-end solutions. So I think there's a strong role for the industry to play, even in that future.

I think self-sovereign identity is a super interesting topic, giving people, individual consumers and businesses, control and power over how their data is used, effectively rebalancing the negotiating dynamic with the platform economy. I think if you get that right, you put yourself at the heart of everything. 

Lastly, the new frontiers of the omnichannel, with embedded biometrics and internet of things everywhere, metaverses in virtual worlds. You'll walk out of your house, step into your autonomous car which is also your wallet. You'll go to sleep and plug into your metaverse game and have a payment method that tracks you all the way through the real, the unreal, the imaginary. On this, we’re going to have to go full hog mode to continue to win in the future. 

So, I just wanted to say that progress isn't always guaranteed, we may still see some of the things we're quite familiar in 10 years’ time.

Maarten van Rossum 

All right, that's good. So, no tips on which coin to buy now, so we can have in 10 years from now, you know, an investment analysis of it. 

Tim Glennon

No investment advice offered.

Maarten van Rossum 

That's unfortunate. Well, thanks everybody. I've taken notes. We will we will circle back 10 years from now. One thing I think we can probably all say for sure is that we'll all still be working in the payment industry, hopefully. So that’s a certainty, almost. 

With that, I'm going to close the call, I think, because we're getting to the end of our time, of our one-hour here. 

Just a reminder for everybody. At the end of this session, there's going to be a short survey and we'd very much appreciate if you could complete that. I would like to thank, of course, Maarten, Stephen and Tim for sharing their time here and their expertise in this discussion. Thank you to the audience for spending your morning or your afternoon with us here and giving us your attention for this. We hope that this session has been very useful for you. And of course we hope that we'll be able to meet up with you again in real life, soon. Hopefully next year here in Amsterdam at Sibos to discuss this topic and many others that will affect us, all across the industry. So with that, I'm going to close the call. Thank you very much, and goodbye.

Barclays FI Forum: the future is now

Lauren D’Arcy, Global Head of Partnership Bank Relationships, FIG, Corporate Banking, Barclays: Hello and welcome – a warm welcome – to the third instalment of our FI Forum series. My name is Lauren D’Arcy and I run our Partnership Bank segment here at Barclays Corporate, within our Global Financial Institutions business. And we're so thrilled and grateful to have you with us here today. We started this FI Forum series last year, in the run up to SIBOS, as a way to keep closely connected with our most important partners and clients in a virtual world, and also to purposefully unpick and explore some of the key themes running through the SIBOS conference. This year we've endeavoured to do the same thing. The theme of SIBOS this year is of course: Recharging Global Finance – through digital acceleration, technological innovation, managing risk and greater diversity and sustainability. These are big topics. So we have attempted to unpick some of these topics through this series, and also through our FI white paper: The future of banking is now.

So, in our first FI Forum session at the beginning of September we covered technology – and we discussed subjects such as emerging technologies and also the importance of partnering with FinTechs. Our second session covered emerging trends and other influences – and we debated the use of central bank digital currencies, the benefits of the ISO 20022 migration and, of course, we touched on the perennial debate around cross-border payments. Today's topic is equally as important, and I would argue even more so, particularly after the last 18 months that we've all been through. And that topic is, ‘talent, diversity and inclusion’. 

Many organisations we've seen have made renewed commitments to fostering more diverse, equitable, and more inclusive workplaces in the wake of the COVID-19 pandemic. And again, these are really big topics. That's why I'm so pleased to be joined by a stellar panel here today who are all going to help me dissect these areas. 

Just before I introduce you to the panel, I want to remind you that we would really like to make this as interactive as possible and you should see a space to ask questions at the bottom of your screen – so please do interact with us. It doesn't have to be a question, it can also be a comment. We're really keen to hear from you, and to see if you agree or disagree with us, because I know for sure that this is a topic that all of us as an industry are grappling with. 

So with that, let's begin. Through the invite for this series you will have access to all the speaker bios, so I'm not going to read them line for line. But, I will briefly introduce each panellist and, as a way for them to introduce themselves, I'm going to ask each of them quite a broad question – but to just talk to us a little bit about why diversity and inclusion matters to them personally. So let's kick off. Our first panellist is Ray Dempsey. Ray is our Chief Diversity Officer here at Barclays, having joined just earlier this year. And Ray, in that role you are charged with the development and implementation of a strategic approach to driving real progress in diversity and inclusion globally – so you're living and breathing this every day Ray – but why does it matter to you?

Ray Dempsey, Chief Diversity Officer, Barclays: Lauren, thanks so much for including me in this conversation. It's a great pleasure to have a chance to talk with this very important group of colleagues and partners. I love the question because it does really cause me to reflect on why this work really does matter so much. I've had a great adventure of a career. I spent more than 30 years at BP prior to joining Barclays on March 1 of this year. And over the course of my time in BP I did all kinds of things. I'm an engineer by background. I picked up an MBA along the way. I've worked in real technology and operations. I've worked in a number of jobs called strategy. I led a region of retail sites. And along the way, what I discovered is that my appetite for understanding the unique differences of people – of colleagues, of business partners, of our communities – always put me in a place where I found myself doing things – maybe, as we say at Barclays, off the side of my desk – but very much as part of the focus of what my work was to be. And I took on the role as Chief Diversity Officer for BP in the Americas in 2016 or 2017. And that's where I discovered that this work was not just the next job for me in my adventure at BP –  it became clear, and it came into focus that this work is my purpose and my mission. And I'm delighted to have the chance to have joined Barclays earlier this year and help us move along in our journey towards creating a more diverse and inclusive workplace.

Lauren D’Arcy: Brilliant. Thank you, Ray. Next, we have Melody Mitchell. Melody you are the Head of Talent Development and Inclusion in the Americas. And you’re responsible for overseeing and ensuring regional deployment of talent development and inclusion.  So the same question to you Melody, why does this D&I conversation matter so much?

Melody Mitchell, Regional Head of Talent, Development and Inclusion, Barclays: [Inaudible] able to be here in this conversation. I know it's likely one of many that folks on the call have had, but hopefully we'll bring some new insights to bear. When I think about it, there's probably two pieces – a personal and a professional set of reasons – as to why this work really matters to me. [Inaudible] person of colour. My dad is of black descent; my mother is Puerto Rican. I've often been in a position, personally, where I’ve often had to think about what role do I play in not only bringing along those who don't have the same support system that I've had at any juncture in my life, but also how can I pay it forward to think about the individuals who are to follow me?  So when I reflect on my own experiences, one of the things I've realised is I've been quite lucky actually to come across people, probably like Ray, who've been interested in hearing my story, and who've taken an interest in helping me be successful in my career and who’ve brought me along on the journey to success. And so I look back very fondly at those experiences because those are folks of various backgrounds, and diverse makeup, who saw something in me and really helped to usher me along at a time when perhaps that wasn’t common practice and commonplace.

From a professional standpoint, I'm a leadership person by trade. I've done a number of different [inaudible], and one of the things that I realised was always near and dear to my heart was I always had a penchant for the underdog. And I realised that the underdog were often those individuals who didn't get the time, attention and interest like I did in my different stages in my life and in my career. And I spent a lot of time wanting to coach them and get them to a place where they felt supported, they felt developed, but they also felt like the possibility for success was near. And so, when I think about how that translates into the work that I do today, it's not much different. I look at my role as leaving something behind that helps create an environment [inaudible] where people feel like they can be their best regardless of their background, regardless of the challenges that they face, and that they can do so because leaders have taken an interest in them and wanting to see them grow. So for me, that's near and dear to my heart, it's where my passion is and hopefully that will come through today.

Lauren D’Arcy: Brilliant, thank you so much Melody, I love that about paying it forward. And last, but not least, we have David Farrow who is Head of Corporate Banking Client Coverage at Barclays. David is responsible for client relationship teams across our global locations – and this covers teams across the US, Europe, Middle East and Asia. So David, I'm sure you have a lot on your mind running a complex global business, where does diversity and inclusion fit in for you and all that you have to think about in your day-to-day job?

David Farrow, Head of Corporate Banking Client Coverage, Barclays: Yeah, thanks Lauren, and really great to be part of this conversation as Melody and Ray have said. So, I've been in the bank for 31 years and if I'm really, really honest, I don't think that I really thought much about diversity and inclusion in the early parts of my career. But, I have always had, I guess, a real thing about fairness, and that’s a value that goes through me. And it's made me also quite curious about colleagues, about clients, and I think through that curiosity I found that you hear stories – and Melody talked about a story there – and some of those stories, to be honest, are stories which make you want to do something about situations which have clearly not been appropriate, or to the advantage of anybody. But I guess the really important thing for me that's probably opened my eyes, as to why is this a priority for me in my current role, is I've been involved in the international side of the business for the last six or seven years and we've purposely built diverse teams to reflect the international make-up of our clients. And I've really seen the power of bringing a diverse team that more accurately reflects the clients that we're dealing with – not just because the clients are happy, but actually it's brought a lot more diversity of thought to what we do. So I've really enjoyed seeing that, learning it, and it's driven me to think actually we need a much more diverse team across our whole colleague base. The other thing I’ll probably just mention as well is I do like doing quite a lot of listening, and you learn an awful lot from listening to colleagues of all levels. You learn what works, you learn probably a lot about what doesn't work. And every time I hear a story where it perhaps hasn't worked very well, that a colleague has not felt included in what we're doing, that spurs me on a little bit around this is a really key priority if we're to attract and retain talent in the business.

Lauren D’Arcy: Brilliant. Okay. So hopefully that's a level set through the panel and I guess what they stand for. I'd like to jump now into the business imperative. Because Ray, I've heard you speak very clearly on this and it's not something that I've heard a lot of other people talking about. Right, so can you share your thoughts on the business imperative for the diversity and inclusion agenda, and why it's important to think simply beyond that this is the right thing to do?

Ray Dempsey: Yeah. Lauren I love this question because what you said at the end there for me is such an urgent priority. We have to recognise that this work is not just the right thing to do, it's not just a good thing to do, it is absolutely about underpinning our ability to compete and perform as an enterprise. 

We have been talking about the business case, the business imperative for diversity and inclusion inside Barclays with three particular areas of focus. And the first is one that I like to call ‘license to operate’. So, increasingly, Lauren, stakeholders from around us, of almost every description – whether they are regulators or legislatures, whether they're investors or shareholders, indeed consumers and customers – they have an expectation that we are actually doing real things and making real and measurable progress in this space. A week ago I spent time, Melody and I both, with the Federal Reserve Board in New York. Very soon, I'll be in a conversation with one of our largest shareholders. We got an inquiry recently from the FCA and PRA, a consultation paper on a focus that they might take on diversity and inclusion. We had an inquiry recently from SGX, the Singapore Exchange. So, literally everywhere in the world where we operate there's an expectation by stakeholders around us who hold in their hands, as I like to call it, our very license to operate. There's an expectation that we're making real and measurable progress, and we've got to be determined about that. 

So, alongside license to operate, there is one that I call ‘performance’. And it used to be that there were loads of anecdotes about why more diverse and more inclusive companies and teams performed better. We've gotten to a place now where it's not just anecdotal. There is real data,  some would describe it as empirical data. Whether we refer to the McKinsey Report from 2015, or the update on that, or frankly many other variations on that same theme that have come out in the recent years. They all draw a very similar conclusion: that more diverse and more inclusive companies perform better. There's often narrative around increased creativity and innovation and collaboration that breeds better results, but I like to summarise it in a much more simple way: more diverse and more inclusive companies make more money. And for me, that's a pretty compelling argument. 

There's a third component though. So, alongside license to operate and performance there is a very true challenge and reality we face around ‘talent’. All of us are aiming to attract, retain and develop the very best talent that the marketplace has to offer, and there is a very true reality now that the talent in that marketplace is increasingly more and more diverse. It's true everywhere in the world, all the places where we have a business presence, and that's why we're taking this so seriously. But in the US, it's even more acutely true. The pace of demographic change in the United States, I think sometimes startles people, and what it means for the way we have to think about this work inside our companies. 

I love to talk about an example from Houston, Texas, which maybe doesn't always seem so relevant to our work in financial services, indeed, there is quite a presence in Houston. There is a story in New York, but I know the breakdown in Houston really well so I want to use this as an example. There's a demographer in Houston at the Kinder Institute at Rice University, his name is Dr Steven Kleinberg. So Google him, you'll see YouTube videos of his articulation of the changing demographics from his research of nearly 40 years in Houston, and indeed across other major metros around the United States. From a few years ago though he drew this conclusion, and I love to repeat it: Of all the young people in Houston, Texas, today – not in 2050 or 2060 or some years down the road – but today, of all the young people in Houston, Texas, under age 19, 84% are people, that in the United States, we've always described as minorities. That's more than inversely proportional to the workforce of many companies, not just in Houston but indeed around the country. 

And certainly, it's true of our workforce in Barclays. The breakdown of that 84% is that 51% of all of those young people are Hispanic or Latino, 19% are African American and 13% are Asian. And so with a little rounding in the tens, it's 84%. So, the same thing is true in New York and Los Angeles and Chicago. It's also true in that next tier of major cities around the country from Atlanta to Philadelphia, to Denver and Seattle. It is the reality that is changing the demographics of this country. And while the balance is a bit different across each of those areas, for loads of reasons, it's true everywhere. And even in New York, which is our single largest US workplace, it's some nearly 80% of every young person under 19 is someone that, in the United States, we've always described as minority. What it means, Lauren, is all of us have to get good fast at attracting, developing, retaining, promoting people of difference. Or in a decade, and certainly no more than two, we won't just be struggling to compete or perform, we'll be out of business. We won't have the talent we need to get work done. So for me those three elements: the license to operate, the performance and the real war for talent means that this work is a true business imperative.

Lauren D’Arcy: Wow, there is a lot there. Really, really good ideas that you've just mentioned, and we will come back, we'll come back to talent, we'll come back to race at work. I do want to just ask you one more question before I move on. If the business imperative is so clear and so obvious, why has change been so slow? And is that a fair statement, has it been slow? It seems to me that it has.

Ray Dempsey: It has been slow Lauren. I think that's acknowledged by nearly everyone in this space, and I think there's a particular reason why. I've been doing things to help support and drive progress in diversity and inclusion for, as I said in my introduction, essentially all of my career – that's more than 30 years. And yet if I look at some of the underlying metrics I don't see much change. And I don't mean to say that we haven't made progress. Indeed, we have, and there are some things that we have learned and some elements that we've built into the way that we operate. But the single biggest gap, in my opinion, is the lack of a real clear and firm accountability construct. We all have really good intentions. We all want to have a more diverse and a more inclusive workforce. We all have great language to articulate what we think that means and what we think it will look like. And the challenge we've had is we haven't applied the same kind of rigour and accountability and discipline that we do to every other business priority – to not just hope that we achieve it, but to expect that we'll achieve it – and that's what we're determined to do in our work now at Barclays.

Lauren D’Arcy: Got it. Thank you. Right, okay, let's delve into some more topics around diversity and inclusion in the workforce. Melody, if I can come to you, what do you think are some of the organisational or structural ways that we can foster and cultivate a D&I environment within organisations like Barclays and others?

Melody Mitchell: Yes, it's a great question, Lauren. And if I think about Ray's point around creating accountability, there are a lot of different levers that we can think about to pull as we are trying to create this culture, but also create meaningful change. And a lot of those levers sit in a number of different places – our structures, systems and processes – but also in the behaviours that we're trying to drive in the organisation. And ultimately the behaviours are what's going to make sure that not only what we do happens, but it sticks. And I think in addition to accountability, there's a sustainability question that we have to make sure that we're thinking about. 

And Ray mentioned this piece around ambitions, which I know we’ll get to, but the idea is that we want to create a sense of purpose, but also a sense of direction. And embedded in that we have to think about what are those levers. So if you think about it from a talent and development lens, it's really taking a view to the entire life cycle of the employee. From the moment we decide that we want to engage them, through the hiring process, all the way through hopefully retirement. And many of you have heard of the phrase ‘from hire to retire’. And so the idea is how do you engage those people across the journey to make sure that we are creating that culture? From a hiring piece, it's looking at, where are we going to identify this talent?  How are we engaging them early on? Many organisations don't wait until folks are right out of university to start engaging them. They're getting to schools when they're 13, 14, 15, thinking about what career they want to be into, and really getting into our communities to start to create a narrative that says ‘Barclays is a place for you’, or ‘any other organisation is the place for you’. So we're getting creative about what does that look like from a hiring standpoint [inaudible], and an employee value proposition that starts way before they're even thinking about joining an organisation. So it's thinking about it from even that early on but even through the hiring phase, what are the experiences that people are having? Are they meeting with a very homogenous group – everyone looks the same, sounds the same, went to the same schools? Can this organisation reflect back to me its possibilities of me to be at a senior level, to progress, to be successful in this organisation? So even through that hiring piece it's really critical, once they're in the door, we all know that the first 90 days is the point at which people decide whether or not they're going to stay or leave. Right? Research has shown us that, and Gallup has tremendous research in this space. How are we making sure, that in those first 90 days, they understand what we are, how we represent the value that we've articulated to them and what possibilities exist for them?  And that oftentimes boils down to the relationship that they have with their managers and the leadership team and the hierarchy. What are they seeing? What are the cultural norms? Are we walking the talk? The things that we said we do, are they seeing it represented? Are they being engaged and reached out to through the networks? Are we making connections for them so that they feel that they're part of a broader community early on? And then, as you get into the phases where people are thinking about what their next steps look like, have we a clear and articulated view to how people can progress?

I've had many conversations with former colleagues in different organisations, and one of the things that sticks out to me is hearing colleagues and former folks in my network talk about, “I’m at an organization but it's not clear to me how I can advance. I see people around me advancing and by the way, none of them look like me. So is there something wrong with me? Is the system broken somehow? Is there a lack of transparency in the decisions behind why and how and who we decide to promote?” 

So really thinking through that, and making sure that there are guardrails in place to ensure that people understand what is it that they need to do to be successful, and where can we be flexible as an organisation so that difference doesn't become the reason why you cannot be seen as someone who can move up and who can progress. 

The other piece to that though, and tied to promotion very often, is development. How do we think about developing employees? What is uniquely important to them based on their community, based on their background, based on what's important to them? At Barclays, we're talking a lot now about social mobility as an example. And I can tell you five years ago that was a concept that didn't even exist in my worldview – to the extent that it exists in an organisation. We're talking about things like social justice, language that is new in the organisation around what it means to consider the health and the experience of our colleagues. How do you remain relevant by ensuring that your development, and the programs you offer, and the exposure to senior leaders, and the opportunities to get sponsorship and mentorship and coaching are available to all talent in the organisation, but take into account their unique needs if you've identified that?

I think a key piece that's underlying all of that is data. And how do we leverage data to drive meaningful insights, but also to create accountability? Because to Ray's point, it's not just about it's the right thing to do, but how does that right thing to do manifest in how we measure performance, how we measure outcomes and how we measure outputs? And so being thoughtful about what data and those insights can draw for us is important. One of the things, and I'll leave you with this piece, on just general culture that I learned early on in my career when I worked at Macy's actually – I worked in fashion industry if you can imagine that – a very, very different culture, just amazing, amazing experience. But one of the things I learned in retail is that unlike some other institutions and other organisations, in retail, you get a daily report card. You know if a product sold one day, and if it didn't sell you had to very quickly, and with a high degree of agility, pivot to make sure that the products you were selling were meeting the consumer needs. And as I was starting to get comfortable early on in my career with data, one of the things that a senior leader once said to me that I thought was impactful was, “Data will only tell you what you ask it, data will not tell you the questions you have not asked.” And it's stood with me because it's very easy for us to look at data and say, “Well this is what we're finding.” But what is data not telling us, the questions we haven't asked? And how do we begin to condition ourselves to think beyond what insights we might glean from our typical data sources? And how do we get more thoughtful about leveraging data so it can give us insights for those we ask, and those that we’re not quite there yet and asking as well?

Lauren D’Arcy: Brilliant, thank you, Melody. David, if I can come to you now, there was a lot there with what Melody said. How do you take that as a business leader and try and drive change in your organisation, and what are the challenges that you face?

David Farrow: Yeah, I think Lauren, there is a lot there actually, and that's part of the problem, that this is such a complex area, and there is so much that we can do, that we should do. But, I guess, one of the things which is on my mind really is the need to take everybody with us. And the clue's in the title really, diversity and inclusion. So this is about everybody feeling that they are included in the organisation in which they work. So, I think what I've learnt as well is there isn't a one-size-fits-all bunch of solutions here. Because people are coming from a different place, really, whether that be, at the simplest era, perhaps where they are in the world and what they see from that perspective, or indeed their own personal background. But the other thing which I think is complex about this is, Melody talked about education to retirement and I hope that I'm near the retirement end, it's clear to me that as you go through life you actually feel different emotions and you go through different challenges. So, one of the things I think for us all to be mindful of is, it's not putting people in neat little boxes, and it’s recognising that their needs to feel included will change as their circumstances change through their lives. 

So I think in terms of some of the challenges that it means when you're running a business, really, the key one to me is how do you actually create this more general engagement in the topic? And why I think that's important is through some of the listening groups that we have done, I guess the themes that come out of it often are around: how are people getting on with their line manager? Does their line manager really understand the challenges they might be facing? Where they're coming from, their career aspirations? Is that conversation a quality conversation, or is the line manager actually avoiding some difficult topics because they're a bit scared to cover it?  So I think that line management thing is really, really key. 

The second thing is, does a colleague feel supported by their colleagues? We run a lot of events for various causes, whether it be around our gender network, our Race At Work agenda, lots and lots of different things. And I think one of the challenges, and it links with the education point really, is, I can remember the first time I went to a black history month event and I was the only white person there. And it really made me think, well actually we've got this wrong, really. I mean bad for me for not attending before, but really we're going to make a much bigger difference, in terms of education, if we can have a much more diverse bunch of supporters and allies through our various networks. So I won't ramble on too much longer, but I think this is actually quite difficult. But for me, if you come back to it, I guess, the constant through all of this is about inclusion. And are all the things that we're doing in our daily lives creating an environment where people do feel more included, that they're listened to, that they're engaged and that we actually enjoy having those conversations, those curious conversations, those tough conversations? Because you certainly come away from it a better person. And we might come on to it a little bit later, but things like reverse mentorship relationships have really been great for me, and have definitely changed my outlook on things and educated me.

Lauren D’Arcy: Brilliant, and I think creating that culture of speaking up as well in an environment where everyone feels comfortable to speak up, to say that they don't feel included is also important as well. So maybe to wrap up this topic on diversity inclusion in the workplace let me just ask a quick fire question for each of you. And I'm asking this selfishly. The question is, what do you specifically do every day to make your teams feel included? And the reason I'm asking that is because I had this light bulb moment earlier this year where I didn't think about inclusion as being a proactive thing. I thought because I'm a generally nice person, and it would really upset me to think of anyone not feeling included, that I was doing okay. But now I realise the proactive element in the inclusive agenda. So quick question for each of you, what do you do every day, one thing, to make your teams and those around you feel included?  We’ll start with Ray.

Ray Dempsey: I'm going to jump into this. Lauren, we talk about inclusion and there are lots of ways to describe it, to define it. It is a choice, it's not just a condition, it is an act. And so the way I try to live this is very simply, I just care. When I talk to colleagues, including David and Melody here, I've spoken to both of them and often they're sat in the same spot that we see them on the screen now. I remember the very first time I met with David and I saw those guitars and that banjo behind him, and I asked him about it and he smiled just like he did just now ¬– it's clearly something that's important to him. I haven't yet managed to get him to pull one of those off the wall and play it for me, but it's a part of who he is, and I genuinely have a curiosity and an interest and I care. Melody has a puppy. I heard a dog a little while ago. It didn't sound like Melody’s so I don't know if we'll decide where it came from. While I've never met the puppy in real life, I've seen him on the screen, and I actually genuinely care about this little puppy. Someday, I hope I'll meet him in real life, I'll call him by his name, maybe he'll recognise my voice from all the time Melody and I have spent talking. But that's what I think is important – to pay attention to the things that people want you to know about them, and to genuinely care.

Lauren D’Arcy: Excellent, I love that. And Melody?

Melody Mitchell: Yeah, I have to say Lauren, I echo Ray's sentiments, and I would say to that last point that I pay attention. So a big part I think about leadership is – and our brain has a funny way of working, right? We are exposed to information all day long, every day, 24/7, and our brain is wired to be incredibly efficient and so we decide what we pay attention to. And if it's not in our realm of what we're focusing on, our brain will very easily just dismiss it. And one of the things I've realised is that it's easy to do that when you're interacting with people because you might have an agenda of focus. But I take pride in taking the time to just slow down and to pay attention. And one example that comes to mind for me is I have a young person on my team and we had a catch up on a very important topic that was time sensitive. I got on the call with her and I could tell just by her body language that she wasn't quite her normal self. And so I asked the question, “Hey, is everything okay? How are you doing?” “I'm okay, just little bit overwhelmed.” And then I asked the question again, “Okay, how are you really doing?” And in that moment, what I didn't expect was an emotional response, but there certainly was one. And I realised that had I just said, “Okay, you're fine, great, okay, onto to business, and let's get through the agenda.” I would have very easily missed the opportunity to understand what was going on in her world. And how could I take time as a leader – though she wasn't my direct report – to spend time and pay attention. And I think those are the moments – it's within the connections that you can create and foster that sense of inclusion.

Lauren D’Arcy: Yeah, and we sometimes get too caught up, don't we, in the day-to-day without taking that time that you say to notice these things? Great. And David finally to you?

David Farrow: Yeah so, I actually think Ray made a point there about just perhaps all understanding a little bit more about each other through lockdown. And we've all had the conversations about homes and doorbells ringing, and dogs barking, and cats walking across the screen and all those sorts of things. And I think that's actually really helped to put everybody on a level playing field because we're all in a similar situation, and we've got to be really careful that we don't lose that when we go back into the office environment. But I think another couple of things, particularly for those of you on the call who are leaders to be really aware of. One is that visibly supporting diversity initiatives is noticed. And I do think that I try to do that, and will definitely continue to do that. And then it gives you the ability actually to talk about what you've attended and what you've learned through bigger forums, and you get this sort of ripple effect I think which cannot be underestimated. The other thing which I try and do, and will continue to try and do more of really, is actually engage with colleagues at all levels. We're all quite good at talking with peers and our teams and all the rest of it. When I'm out and about visiting offices around the country, but also when we see something that goes well, I try really hard to pick up the phone or to gather a group of maybe more junior colleagues together and just have a normal conversation about how things are going. And I did that in our office in Birmingham yesterday, and it was a really great conversation where I learned an awful lot from colleagues, and certainly some things that we can go away and do differently. So I think probably it links with Ray's point there around showing that we care. And I do think there's a very strong link really between inclusion and diversity, and also, the sort of kindness agenda now through leadership and a more responsible style of leadership.

Lauren D’Arcy: I love all those responses, and I think the really great thing is none of it is rocket science, right? None of it is technical. You've given some really great examples of things that we could all implement I think quite easily. 

Let's pivot somewhat. I wanted to talk about intersectionality, which is something I'm hearing more and more about. And, we're talking about intersectionality as the acknowledgement that people are not one-dimensional, and that people have their own unique experiences of discrimination – so we have to consider everything that can marginalize someone. So it could be gender, race, class, sexual orientation, there is overlap. So I want to unpack this a little bit. As I said, Ray, I'll come to you first. I'm hearing more and more about this, so it seems like intersectionality is becoming more of an area of focus and priority for diversity and inclusion. Could you help us break that down and share your views on why this matters?

Ray Dempsey: Yeah, Lauren, it is such an important topic. Our women's network had a careers week, I think it was just last week. I was in London and we had a conversation around intersectionality, which I thought was terrific. And we started with a little bit of an agreement around, ‘so what does it really mean, and why does it matter so much?’  And because I don't know everything, I use the font of all knowledge, and so I went to Google to find out what does intersectionality mean? And there are some pretty clear descriptions, but I think what came through in our conversation was an even simpler view. It's about recognising that oftentimes there are layers that represent the dimensions of difference that are true for all of us, and sometimes those layers can create what I'll describe as a compounding effect of challenge – of biases to face and overcome, of effort required to move along in one's career. 

So in the context of the women's network careers week that we had, we explored this idea. We have much to do still to get to what we call gender balance in our workforce and especially at our leadership. And we're making real progress and I'm proud of that, but we won't rest, there is still more to do. And as hard as it is to get to the very senior most levels in our bank as a woman, how much more difficult do we think it might be if you are not just a woman, but a black woman and perhaps not just a black woman, but a black disabled woman? Or add another layer, what if you're not just a woman, but a black, disabled, lesbian woman? How much challenge, how much additional effort, how much additional bias would a person then face that we have to be conscious of, mindful of, in pursuit of achieving that equitable, diverse and inclusive workforce that we say is our aim. So I think intersectionality is a really important space. I don't suggest that there's a very simple or clear answer to what companies must do, but recognising those additional challenges I think is an important starting point in the conversation.

Lauren D’Arcy: Great. Thank you. David do you have any thoughts on this? And I guess in particular, how do we break down barriers to intersectionality? Look, it's not an easy question but any thoughts that come to mind?

David Farrow: Yeah. And look, I think it is actually a challenge for all of us here. I'm sure everybody on the call has got various networks that are leading a particular cause, but as Ray has just described actually, colleagues don't always fit into a network. And as I said earlier, we change over time as well. And I think that coming back to this point on education, the best things that I've been to actually have been where perhaps two of our diversity pillars have worked together. 

I can remember going to an event specifically about how mental health is thought about in some of our ethnically diverse communities. And I actually learned a lot there about some of the challenges that some of our colleagues face. And I think these type of events actually are always richer really than going to an event ran by a single pillar. And certainly in Barclays, I think we're getting a bit better at doing that, but it is not really going to end is it, because, human beings are really complex individuals. And I think that we'll get better and better over time I suppose learning that as individuals we all face challenges from a bunch of different directions – and sometimes, it could be stage of life, it could be our origin, it could be all sorts of things. So as Ray says, there's not an easy answer to it, but I do think we can do more to, I guess, learn really around the challenges that individuals face that are coming from different areas of diversity.

Lauren D’Arcy: Excellent, thank you. And Melody I’ll come to you on the same question, but maybe specifically about our colleagues, how do we support colleagues in this journey? It seems to me that we must keep learning, and encouraging employees to learn. What are your thoughts?

Melody Mitchell: Well Lauren, I think that's spot on – so the ability to expand our capacity to understand and to learn about the different experiences of individuals. And the challenge, as human beings, is we won't be able to relate to all of those facets. But I think starting from a place of realising that individuals are not one-dimensional, we never have been and we never will be, but also acknowledging that those dimensions of difference create unique challenges, but also create unique opportunities to engage with people in different ways. So it's not all negative, right?  It is also about being able to draw out some of the uniqueness and see how that can contribute in multiple ways in an organisation. 

There's a book that I'm currently reading and it's called Conversational Intelligence, and it's by Judith Glaser. The premise of the book is around how conversations actually expand our capacity as human beings, particularly in organisations, so that we can drive culture change. And it talks about the neurological impacts of that and how the brain effectively is wired and rewired through conversation. And one of the things that I found really interesting is she talks about this spectrum from resistor to co-creator, and it helps us understand where those conversations lie. The idea behind a resistor is someone whose agenda effectively is ‘I have a point of view, and I want to sway you to my point of view. I'm not open to yours, right?’ And that's not the place we want to be. We want to be in a place where we're a co-creator, which what I love about the language she uses is she talks about this idea that we create possibilities together. And when I think about what Ray is sharing and what David has shared, and what you've just mentioned, Lauren, the ability to talk about intersectionality is actually about our ability to co-create a world that we want to all live in, where we all feel valued, we all feel that we can contribute and be our best. But to get there we actually have to train ourselves to have these conversations differently. 

And so at Barclays, for example, we are doing a number of things. We've launched a courageous conversations podcast/webcast series. But then on a regional level, we're also embarking on something called Real Talk, which is about creating what I like to call safe spaces to have that dialogue. Because, the other thing about conversations is that our brains think of certain situations that create discomfort as threat environments, and when people are in positions of feeling threatened they're less likely to be open, they're less likely to be creative and they're most certainly less likely to drive change. And so, how do we create safe spaces for people to explore, to engage, free of judgment, so that they can open themselves up to what the possibilities they hold? And so hopefully that gives a structure to how those conversations can be anchored in how we change the culture.

And I think from there, you'll start to see that there will be some very obvious ways that we create inroads. People will ask different questions. Leaders and their directs will have different kinds of conversations about challenges, what's getting in their way, how to help people and support people to be successful. But it will reshape the way that we ultimately interact with one another which is really what culture is about, right? It's not about words on a page, it's about those interactions on a day to day that we know to be true.

Lauren D’Arcy: Wonderful. That sounds like an excellent book and I love that resistor to co-creator. Really good thoughts there Melody, thank you. I'm going to take a question from audience now and I might give this one to you, David, if I may? And we've touched on that I suppose a little bit but the question is, how do we keep diversity at the top of a firm's agenda and create accountability across our colleagues from the top to the bottom of an organisation to see meaningful change in the D&I agenda?

David Farrow: Yeah. So look, I think that's one that we're grappling with at the moment, but with Ray’s arrival have got a pretty clear plan as to how we achieve it. And I might start from the top, and I think there's a mixture of sort of harder things and softer things, but the reality is, and Melody talked about data earlier, is what gets measured gets done. And I think many organisations have measured things like gender diversity for quite a while now, but have been less public and have had less clear goals around ethnicity, as an example. And certainly that's one area where we are doing better now with Ray who’s got a very clear plan agreed by the group ExCo. And the second thing is that tone from the top. Everything really does come from, is the CEO talking about this stuff? If he isn't, then actually we can work as hard as we like, but it's not going to have the same impact. So I think tone from the top is really, really important as well. And then that links in with the way that we're measured. And actually, one of the really great things I think in Barclays now is we all have an inclusion objective within our performance plans. And I think we're learning how to talk about that because it is relatively new. But the fact is we haven't talked about it before so it could be small things to start with, to talk about, ‘what are you doing to foster with your colleagues an inclusive environment?’ And I think we'll learn from each other about how to do it, purely from the fact that we're now talking about it. So I think that's really helpful as well. And then, yeah, clearly there are some basics which underpin it, and Melody touched on some of the things. But we've also ran a training for everybody around diversity and inclusion, and the sort of topped up version if you like specifically for line managers. And I mentioned before, I think they've got a really, really massive role to play there. So there's an awful lot of that there, but the reality is we have to be able to report back to our teams on progress. And unless we're measuring what we're doing, that's a really difficult thing to do, because then what happens is people they look around them and they draw their own conclusions. And we have to ensure that when people do look around they're actually seeing a difference. And I think one of the really easy ways to do that is, do people see somebody in the that sort of looks like them, comes from a similar background, role models that they can look up to, to say, actually, “yeah, this is a place where it's going to support my development and my achievements.” So there's a lot there and I suspect, and Ray will give a far more eloquent answer than me, but I suspect that the way that we manage this will probably evolve because I think we'll get better at it over time as it's really, really embedded in everything we do.

Lauren D’Arcy: Brilliant. Thank you, David. And you mentioned Ray’s work actually in your answer there and some of the work that Ray's been doing. And I wanted to spend a few minutes specifically talking about that, about the Race At Work agenda. I think events in the US and elsewhere have rightly prompted organisations like Barclays and others to think about and appraise what we're doing in the fight against racism and to ask, “Is it enough?”  And we know that there are some ethnicities that are underrepresented relative to the potential talent pools available. And so Ray, I wanted, if you don't mind, if you could talk a little bit about the Race At Work ambitions that we have just launched. And interestingly we're using that word ambitions, right, it's not a target, it's an ambition.

Ray Dempsey: Yeah. So it's a really important space for us at the moment, Lauren. And I have to say about David's response, he said it so well, it made me a bit worried that I've been talking to him too much and I hope I haven't outworn my welcome, but the way he described it is very much the way that I do. So, it's really great reinforcement to see how that really has taken hold in the business, and that's really what we're here to do. 

The work around ambitions is actually something that is arguably a consequence of the response we took following the George Floyd murder, the tragedy in the US, but it's a bigger story than that which of course reverberated not just around the US and in the UK, but indeed around the world. What we've sought to do here is take a really close look at the composition of our workforce relative to the available talent in the marketplace in particular geographies in which we are present – and for us, it's the UK and the US. And what we've sought to do, Lauren, is to be really, really clear, about where there are real under-representation gaps, where the composition in our workforce does not reflect the availability of talent in the marketplace around us. And to close those gaps we've put into place these Race At Work ambitions. There's a very specific one to achieve an uplift in those underrepresented groups in the UK, and a similar one to achieve an uplift in those groups in the United States. And then a third one which is aimed very specifically at the most senior level in the bank. It's about changing the representation of African-American or black colleagues at managing director, at the very highest level in the bank.

And all of these things are very purposeful. They're not just aimed towards good intentions, they're very much entirely underpinned by a deep understanding of the data. And the word ambitions, as you pointed out, is a very intentional usage. Sometimes the word targets infers that you will do just anything to tick the box, to just say that you've got that done, and that sometimes leads to people making what aren't always the best choices, and that's not what we're aiming to do here. There's also a sense created by the word, and even the image of a target, that it is a finite destination. That you just have to get to that place, and once you've hit that bulls-eye, or hit close enough to the bull’s eye on the target, then the job is done, the work is complete. And that isn't true. We’ve set ambitions that very clearly are creating a clear direction of travel. We know which way we have to go, we know where the gaps are, how large they are and what we have to do to close them. But we also know that the workforce demographics around us are still changing, and in some cases at pace. So, when we achieve what we've set out to do with our 2025 ambitions we know that we'll still have more work to do. And so we'll reassess, we'll re-evaluate, we’ll re-examine the census data and other workforce availability data, and then we'll reset our aims to push us ever closer towards a workforce that truly and fully represents the availability of talent in the marketplaces in which we are present.

Lauren D’Arcy: Brilliant. Thank you. Thank you for explaining that. And Melody I'll come to you if I could. Because I wanted to ask you about, well, I guess we know the progress has been made when it comes to gender diversity, but not necessarily for women of colour, and so do you think that these Race At Work ambitions will help to address that?

Melody Mitchell: Well I think what's been really fascinating is that work ¬– we realised that we have spent a great amount of time looking at our gender diversity as a full [inaudible]. One of the things that I think Race At Work has done – and this has been a question that has come up for us as an additional focus – is does that necessarily mean that, for example, looking at gender diversity is no longer on our agenda in terms of our priority for us? I think Race At Work, what it's done is expanded the conversation around what we need to pay attention to. And so to that, it actually is giving us a different perspective on how we need to understand what you're describing, which is intersectionality. Well, what we know to be true is that particularly black women face a number of different challenges that haven't really been talked about in the workplace specifically.

And when you look at some of the recent research around the pandemic, there is this overwhelming realisation that black women in particular have found the pandemic and working from home to be of value to them – because they haven't had to face some of the challenges they would in the workplace around being accepted, feeling included, feeling like they belong. And I think what that's done is it's helped us understand the differences in the different communities, and exacerbated some of those challenges and have brought those things to light in ways that haven't perhaps existed before. So I do think Race At Work will help us expand that conversation that we [inaudible] haven't. And as a result, what we're finding is that with the launch of that, people are coming forward, they're sharing feedback, they're sharing stories, they're sharing insights, maybe in a way that didn't really exist for them in the past. And I do think that that will help us drive our goals. 

What will be important though is that as we look at the data, and as we look at our progress towards those ambitions, how do we ensure that we're looking at it through multiple lenses? So that we don't just take a blanket view to say, right, we're making progress, and when we do the deep dive we realise it's only with men, it's not so much with women. So how do we continue to be accountable for that?  And one of the ways that we're doing that already, and it's something relatively small in the big scheme of things, but is a high impact item, is how we decide who gets invited to nomination-based programs, as an example. It's something that we've always relied on our leaders to make decisions around, to say, make sure you consider diversity, make sure you look at gender, a gender mix when you invite folks. But what we haven't necessarily been able to do is the appropriate levels of check and challenge. So now, what we're doing is we're not only asking the business leaders to do what we've always asked them to do. We’re engaging our HR business partners, we're engaging our talent leaders who are receiving those nominations to do an extra round of checking to say, “Okay, great we've seen some progress in this space, but actually there are no women who've been invited, and in particular, no black women or no Hispanic or Latinx women.” And so making sure that that conversation is one that's much more transparent has really, I think been a way in which we can start to drive the ambitions with the gender lens as well.

Lauren D’Arcy: Wonderful, and I think it just reminds me again and again through this whole conversation that these things don't happen by accident. We have to be proactive in thinking about new ways to engage. Great, so we have burned through that time very quickly and I didn't get through all the questions, but I think it just shows what an important topic this is. But I do have one last one, so maybe I'll put it to the three of you just to give me some concluding topics, but it's really around the future of work, right. I think it's a really interesting time for the future of work, and some would say that we have a once in a lifetime opportunity to reinvent the workplace, and therefore it would make sense to also reimagine our diversity and inclusion efforts at the same time. So, a final comment from each of you. What do you think, is now the right time to reimagine all of this? I’ll start with you Ray.

Ray Dempsey: So Lauren, it is absolutely the right time. I'm excited about that possibility too. I spoke to our HR grads recently and told them that while in some ways it's been difficult to enter the workforce at a time that we've been working entirely virtually, it also means that you are at the very beginning of what I think is a completely new way of working – not just in Barclays or in financial services, but indeed in industries and businesses and efforts of every type around the world. And so what that also brings is a fantastic opportunity to bring in diversity and inclusion as a particular lens and focus through which we examine the talent that we want to attract, the talent that we will commit to developing and supporting, the talent that we aim to see progress throughout their careers. And in some ways, the virtual experience of the last 19 months has been a fantastic provocation and learning about ways that we can do that, even with a massively different and vast changing talent pool and marketplace around us. So, I'm excited about the way that we'll create the future of work. I don't think it's a destination that we have to find our way to. I think it's a destination that we will create along the way. Our participation in supporting this through diversity, equity and inclusion I think is going to be a great priority.

Lauren D’Arcy: That's great Ray and maybe we'll leave it there because we're just on the hour. So I just want to thank my panellists and thank the audience for spending time with us today. We've certainly not solved all the problems of the world, but hopefully we've given you some food for thought. And I wanted to finish with something I came across on my train journey into the office this morning that just really opened my mind, just something really simple that I read. So apparently, in Denmark, there are libraries where you can borrow a person instead of a book to listen to. So you listen to their lifetime story for 30 minutes, and the goal is to fight prejudice. So each person has a title, so, ‘unemployed’ or ‘refugee’ or ‘bipolar’, and the idea is that listening to their stories makes you realise that you shouldn't judge a book by its cover. And this project apparently is active in more than 85 countries and is called the Human Library. It just was a coincidence that I came across this this morning on my train journey and I thought I would share it with you because I thought it was a really simple but effective example of how we can think about prejudice. So I'll close it there. You will see a short survey pop up on your screen once we close. We'd be really grateful if you filled that out for us but again thanks so much for spending your time with us today. We will end there.