Traditional Banks Attract Investors With Innovation And Trust
Digitization is not a goal for the world’s largest and most well-known banks. Instead, it is a continuous, dynamic process of change and innovation that must adapt to new technologies, customer needs, and economic trends.
And while the digital transformation of retail banking may be focused on improving the customer experience through apps and online services, it is just as important in corporate and investment banking to give clients more power through new data services.
In a recent interview, Yvan Mirochnikoff, the head of digital solutions at Societe Generale Securities Services (SGSS), said that digital transformation is one of the essential parts of our sales strategy, based on a plan with two different axes.
The first part of digital transformation is the customer experience. Like retail banking, SGSS uses digital tools and platforms to keep relationships with clients in a connected economy.
He said the second axis is access to data, explaining that you can no longer send PDF files through email. He said that these days, clients want direct access to data so they can put it into their systems.
Mirochnikoff pointed out that whether information flows through an application programming interface (API) or some other way, the general trend is for banks to create a “self-care environment” where their clients can directly access real-time data.
In fact, “We are [increasingly] dealing with what we call self-care services, bringing more capacity to our clients to [service] themselves with more autonomy, and with more efficiency,” he said.
Interest in ESG Data
Not only do customers change how they access the data that SGSS manages, but the types of data they need also change.
Mirochnikoff said that the need for environmental, social, and governance (ESG) data has grown as businesses and fund managers try to diversify their investments into more sustainable assets.
He said that sometimes this data is well organized, which makes it easy to find and use. But most of the time, it could be more organized and easier to understand.
He said that for SGSS to meet this challenge, it must first make new models and share them with its clients. However, he stated that it is still a work in progress, not least because the rules governing ESG investing are constantly changing.
In a broader sense, SGSS’s growth strategy is based on making products that give its clients access to new assets. Mirochnikoff said that the bank has a multi-year research and development plan to ensure it is ready to offer new services as investment trends change.
Creating Digital Trust
Mirochnikoff says that more and more investors want to diversify into newer assets like cryptocurrencies. This means that these new asset classes will have to be introduced in a way that builds “a bridge between traditional finance and new finance,” he said.
In September 2018, for example, SGSS launched a new service for asset management companies that want to include cryptocurrencies in their portfolios. The European bank can hold crypto-exposed funds, value them, and manage liabilities.
Mirochnikoff said that, in the end, it all comes down to trust. Even though there are many ways for investors to buy and manage crypto assets today, they turn to established, regulated players like Societe Generale because “we bring this trust to the customer and [their] investment management company.”
Also, after a rough year for the crypto industry, which ended with the shutdown of the popular cryptocurrency exchange FTX in November, investors are looking for safe, reliable partners.
And while some European crypto exchanges are counting on low-risk custody solutions to bring in wary users, Mirochnikoff insists that banks have a crucial role in building much-needed trust in the space.
“It’s very key that a traditional bank like us [is] paving the way [and unlocking] innovation [around] this new asset class with all the guarantees that it works and that it is secure,” he said.
