Banks and the challenge of technology

Laurent Marochini: “Today, a single company may be on the cutting edge of technology, but it will not necessarily have a competitive advantage.”
Laurent Marochini: “Today, a single company may be on the cutting edge of technology, but it will not necessarily have a competitive advantage.”
(Illustration: Maison Moderne)

“The best way to predict the future is to create it.” This quote by Peter Drucker, a renowned professor of business management at New York University, is more relevant than ever with regard to the new technologies available in the financial industry.

Most financial institutions have become aware of the impact of digitalisation on their services. The unfortunate case of Kodak now serves as a counterexample for many companies, and has spurred them to do everything possible to anticipate this change. Today, flexibility and innovation are the keys to understanding trends and to having the ability to reinvent oneself. Therefore, banks are increasingly being compared to technology companies.

What are these technologies? And how do they impact the world of finance?

Various studies on the impact of technology in the banking system have unanimously identified blockchain, artificial intelligence and open banking as the most groundbreaking advances. Many banks have already tested these technologies through trial runs (proof of concept). The challenge here lies in industrialisation in order to achieve an unprecedented production and customer experience.

To better understand the major changes that are currently underway, Société Générale Securities Services has conducted a prospective survey of more than 100 of its largest clients in Europe (asset managers, alternative asset managers and asset owners) called Long View.

For instance, an interesting insight from the survey is that 39% of surveyed asset managers still face the challenge of using data better. Banks are sitting on gold mines and it’s in their interest to manage data wisely.

For informational purposes, the GAFA (Google, Apple, Facebook, Amazon) companies hold more than 95% of the world’s data (source: and have learned how to manage it, especially the ability to monetise it. For example, AWS, Amazon’s data centre, saw its sales increase by 45% in the last quarter of 2017 (source:

Blockchain also offers an opportunity. Considered the greatest invention after the Internet, it is quite promising, especially when it comes to operational efficiency and knowing their customers. The ability for stakeholders to collaborate is essential to making the most of this technology. Achieving operational efficiency remains the main objective according to the Long View survey.

Taking into account their distributed and “open” characteristics, these new technologies require us to completely rethink our way of working in order to discover this new world. The environment and the capacity to create new business models are the key elements in transforming companies. This transformation will require more collaboration with competitors and new stakeholders.

Today, a single company may be on the cutting edge of technology, but it will not necessarily have a competitive advantage.

So what are banks doing to stay competitive in this environment?

For several years, banks have understood the interest of interacting in this new world, especially when it comes to collaborating with “FinTech” start-up companies. Although these were seen as a potential threat to the well-established banking model, these companies are now welcomed with open arms. The amount of start-up funding available is a great indicator to demonstrate the growing enthusiasm in this regard. In particular, the KPMG study revealed that France raised as many funds in the first quarter of 2018 as it did in 2015 and 2016 combined. Moreover, this trend is more or less identical in major financial world hubs such as London or Berlin.

This idea of “co-creation” – that is, cooperation between start-ups and major banking institutions – will, for example, make it possible to completely redefine the customer experience in a world where consumer habits are constantly changing. Within this context, Société Générale Luxembourg has decided to continue its digital transformation by opening an innovation laboratory and by welcoming both internal and external FinTech start-up companies. This collaboration will be essential to understanding and developing the digital professions and uses of the future. All this while keeping in mind the fact that data security and its use by customers should be carried out efficiently and securely.

Alone, we progress faster, but together, we progress further!

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