Innovation Driven by Internal and External Collaboration

Jim Marous (00:11):

Welcome to Banking Transformed, the top podcast in retail banking. I'm your host, Jim Marous, owner and CEO of the Digital Bank Report and co-publisher of the Financial Brand. We're coming here today from Money20/20 in Amsterdam where we're talking to industry leaders about what's going on in the innovation area.

(00:29)
The 2023 Retail Banking Trends and Priorities Report found that 60% of financial institutions are meeting the digital needs of consumers through collaboration with FinTech companies and third party providers. But how are these collaborations increasing the speed and scale at which innovation happens? And is that all that's necessary? Is there more to the amazing equation of the innovation, the size technology, spending money and trying to move faster than the consumer? We're going to get to those today. I'm excited to have Claire Calmejane, the Chief Innovation Officer at Societe Generale and Thad Vorozilchak, the Vice President of Banking and Financial Services at IBM on the Banking Transformed podcast.

(01:15)
We're going to be discussing how financial institutions are disrupting legacy banking with new ideas and technological advances. When global financial services executives were asked about the ways they were modernizing their technology and digital capabilities, only 18% stated that they were using core providers exclusively. Conversely, 44% stated that they utilized core providers for about 75% of new technology deployments, and 38% relying on third party or FinTech collaborations wherever possible.

(01:46)
So welcome to the show, Claire and Thad. Before we begin, let's share a little bit about your backgrounds. Claire, we go back a long ways and you have a long history in banking, but even more importantly, a real strong history in the innovation process. So you've gone through a lot of changes. Give a little background about what your background's been.

Claire Calmejane (02:07):

For sure. Thanks, Jim for having me. So, I'm an IT engineer by background and then I worked about seven years in consulting. I did research at MIT on the digital transformation on the very early days. I spent seven years at Lloyds Banking Group in the UK leading as much as IT teams. Then the people transformation that undergo when you take innovation, then our innovation department and our risk transformation. And about five years ago I came back in France to work at Societe Generale, which is 120,000 people across the world, 15 line of business, 10 service units. And for the past five years, I have been leading the digital data and innovation transformation for retail banking, world sale banking and investment banking and our new mobility pillar.

Jim Marous (03:01):

Wow. And how about you, Thad, a little bit about your background at IBM?

Thad Vorozilchak (03:04):

Probably less impressive on all fronts. I went to university and really developed a passion for technology in conjunction with business while there. The degree that I have is one that is kind of a cross between computer science and business itself. And so I've spent the past 20 years helping businesses transform through the use of technology without having to go so deep and hands-on that I get caught in the mire of that. So I'm a father of five and a husband and Catholic man. And I try and just help all of the companies that I work with throughout their engagements to make better use of technology and as a result make better use of business decisions.

Jim Marous (03:53):

So Claire, you've been in multiple organizations and I think you probably have as good of an idea as anybody in the business on what are the key components that drive innovation? Sometimes we talk about technology and you talked about the people side. And that's far from the only part that we have to worry about. What do you see as really the clear components that make innovation happen right now in the financial service industry?

Claire Calmejane (04:19):

For me are three. The first one is I often say your innovation strategy is as good as your strategy. So the thing is innovation is just an enabler of your strategy. It's not something on the side to a dedicated team. It need to live within the organization and to become mainstream in term of new business model or transforming your core business model which remain for me, is the most efficient area to generate P&L or cost optimization. So the first one is really don't do an innovation strategy on the side thinking, "Okay, let's look at this crypto or different thing." Make sure you start by integrating in the strategy of the organization and it come to [inaudible 00:05:06], you can can then try to iterate that.

(05:09)
So the second component is a culture of experimentation. Really how can you go in very risk-adverse organization in people that more and more are under crosswind pressures that come from the regulation from the past couple of years? Interest rates which are changing, from the technology transformation undergoing, how do you, in this context, leverage the components in order to start the experimentation, the sandbox and progressively make it grow and make it stick more and more in your organization?

(05:45)
And the last component is for me, the people. So when I started Societe Generale, people were like, "Oh, yeah, let's hire people from the outside. Let's bring some fresh mind." Because Societe Generale also have a lot of homegrown talent that I have spent a couple of years in the organization. It's actually to transform. It'll be more important to have people that really understand deep down the organization, that is a trust of other people and make sure we align. And from there, get my skillset on AI, on data and open banking and to make sure people get what I call the second, the pie shape of the transformation. So they're very strong in the banking background.

(06:26)
Let's bring them the technology background so we can push together the strategy. So building a re-skilling program, up-skilling program have been part of our strategy and we recently delivered a partnership with Harvard in leading in the digital edge. We launched some re-skilling program with schools to train some people that are frontline to developers, people that used to be in a back office to become data scientist or data leaders. So we have a range of activities that we are operating.

Jim Marous (07:00):

It's interesting, you kind of at the beginning said for innovation to work, you have to know your corporate why. Because you can get distracted so easily, especially when things are happening so fast to go for the next shiny object. The other component, the people side you brought up, is so important because when I've had interviews with others on the podcast, the ones that seem to really get it the best are not only trying to involve everybody in the process but trying to make everyone feel safe. We forget that you and the innovation area are a threat to the legacy banking organization. They're trying to find a way to completely eliminate my position. And you already talked about you have to make it so that they realize they can be part of that digital process. So Thad, you visit a lot of financial institutions. You also are at a lot of events where you've talked about the innovation of financial institutions. What do you see as the key components that make innovation work at a financial institution from your perspective, from the organizational perspective?

Thad Vorozilchak (08:03):

Yeah. And look, and I couldn't agree more with Claire in that people process technology together or what make this work. Technology on its own is never going to create the outcomes that our businesses desire. But back to something that you just said and something that we talked about prior to the podcast, which is we're living in an era where for the first time, even the technologists are being outpaced by the technology itself. And that speaking of feeling safe and feeling as if you can keep up, really goes back to having that purpose that you talked about. And I see that. I see the businesses that have their purpose in mind, their why in mind from the beginning and then are able to translate that throughout the organization regardless of role are those that can adapt quickly and take advantage of those new technologies quickly. Not just because they know what they want to do and who they want to be, but they also know who they don't want to be and what they don't want to do.

Jim Marous (09:04):

You can get distracted and that makes it so that people already don't have enough time.

Thad Vorozilchak (09:08):

That's right.

Jim Marous (09:09):

And there's so many places where it's like whack-a-mole, that little animal and you go, "How do I keep that in place?" But that why, it's interesting from both your perspectives, is if the corporation notes are why, then what's nice is the other employees. The employees are such a big part of this whole element that if they realize that just because we're innovating doesn't change what we are.

Thad Vorozilchak (09:32):

That's right.

Jim Marous (09:32):

I think when you look at companies like Societe Generale or when you look at IBM, when you look at other companies, and I can name a few other ones, the ones that are doing the best have been able to pivot, but they really haven't lost who they were. I mean IBM, when you think about it, it's lasted a long time. Well before my time in banking, which is a long time. But the reality is the organization as a whole has not changed who they are but they changed dramatically how they implement against it. And we talked about it last night a little bit. You can't buy technology to make innovation happen.

Thad Vorozilchak (10:07):

That's right.

Jim Marous (10:07):

It's a lot bigger equation than that. So Claire, yeah, go ahead.

Claire Calmejane (10:11):

No. To your point, we did a big piece of work in Societe Generale around the why and their how. So about three years ago we went into redefining our purpose as a company. And we were a group of 10 of the management committee to really think about what do we want to put as a one-line statement, as drive us. And we had also young talents that is started with us and we came back with, we want to build a more sustainable and durable world to together with our clients by providing sustainable and innovative solutions. So we came back with this sentence and then the question was, but how from the purpose? When you put the purpose, it's one step, but then it took us probably 12 to 18 months more. I remember our CEO, Fredrik...

Claire Calmejane (11:00):

Probably 12 to 18 months more. I remember our CEO, Frederick, he put me in charge of a working group around execution with one of my counterpart of the management committee. And we could not be more different. I was the innovative mind and he was very robust in term of execution, operationalization, everything. And we had to work together to look at the two phase of the watch. And we said it to Frederik because a lot of people came, okay, we need to work on human capabilities, Euro talent, workforce, which is super long area of work. And we came back, we say, actually what's happening is, as I mentioned, Societe Generale have 15 line of business and 10 service unit. And each of these lines have their strategy. So they have their plans, they have their strategy. And the question was, as a group, what are the common component of our strategy and how you define that and you make the execution go in.

(11:57)
And we deployed about two years ago the OKRs method, Objective Key Reviews that actually drive outcome and values rather than KPIs and team management of [inaudible 00:12:08]. And that is a journey that take a long time, but that's one of the core components. To execute, how do you do it differently? So you talk to your team about the outcome you want to drive. You say, okay, I want more satisfaction in my SME business. I want to drive this part of the economy in sustainability and biodiversity. And then you say to people, how can you do that with the minimum budget and the maximum effect? How can you reach this target at 80%? What are the solutions?

(12:41)
And you start driving differently, your finance process and everything. And that's when your transformation have matured a lot. Which is your question. Your innovation became completely embedded in your process. Because you know are driving by purpose. You have the gross mindset at the same time and you drive the efficiency of working collaboratively towards the same target. They are public to everyone. Everyone can see this target. They are part of the management committee incentive. So in digital I have one. Everyone need to meet one part of a digital sales acquisition and data maturity, volume of data, and that's common for all the teams. So all the team have to work through that.

Thad Vorozilchak (13:23):

Claire-

Jim Marous (13:23):

Yeah, go ahead.

Thad Vorozilchak (13:24):

I was just going to say, I think, and I see this at IBM, I see it with other financial institutions that I have the pleasure to work with. But it seems like at SocGen then that makes the trade-offs easier for you, especially as you start to put together the strategy and implementation of that strategy with someone who couldn't be more different. You can view what the core looks like so that you know what the periphery and those changes will look like as well. It probably on the setup is more time-consuming, which I think everybody's fearful of. But the payoff for not having to redo or rethink, wait a second, does this align to our values? Are we aligned together? Is probably very prominent in the work that you're doing now.

Claire Calmejane (14:03):

Yeah. After, I would be very modest in the fact that, as I mentioned, I think it's a couple of years to go through it and you have to maintain the pace. And as you mentioned sometime some of the pitfalls are it's quite time-consuming in terms of engaging leadership management. It does require also on some area to evolve your leadership towards this type of driving with purpose, driving with vitality. And that's also component of the organization that need to come together. So we still have a long way to go.

Thad Vorozilchak (14:33):

Yeah. What's interesting too, and I think you may find this to be something that you see as well, is I think when I start thinking about how we talk about AI or data or implementing technology strategies, all that comes into play. So everything that you've put in place from the people standpoint, then you make those same types of decisions and those same types of linkages with your data, with the way that you want to automate, with the way that you implement solutions and then the technology on the periphery. So it really is, it goes back to the very beginning. People, process, technology aligned.

Jim Marous (15:09):

And what's nice is, and believe I caught the fact that you said it's not always about the KPIs. That is really getting out of the legacy mindset of saying, we need the next quarter to happen, and innovation can't happen that way even though we can implement against next quarter. The reality is those KPIs need to have some long-term bearing. So we make it sound like it's easy and it's not. One of the biggest challenges that you see both at Societe Generale, but all foreign banking that stands in the way of good innovation. What one or two that you say, that usually is a stumbling block?

Claire Calmejane (15:46):

Yeah, I often say my job is to take my glasses and to put them on the head of the CEOs of our business line and to work with them in partnership to say, look at it this way. And what I mean by that is I think the first pitfall is when your innovation or transformation department don't align sufficiently with the business, that could be one pitfalls that I see. So you really need to get this partnership right from the outset to say, okay, let's work like that. A second one is obviously how do you bring the outside innovation? So how do you work through partnerships? I like this example because Sundar Pichai is the CEO of Google. About three years ago he went on stage to say the future of Google is AI. I'm going to put all my energy on that. We knew it's a key area for Google because about 95% of their revenue generation is on ads.

(16:39)
And it was important to diversify through AI products for the long term this area. Very interesting is that it was not Google creating even if they have bought, but it was not them creating a Chat GPT. It was a startup started by very brilliant mind, but it was still a startup called Open AI, that probably had less resistance, much more open field funding in order to do that. And now this innovation is going to be brought to the market in partnership with Microsoft. And Microsoft, which didn't take necessarily this as proactive as approach as Google. So it was part of their DNA to do AI product, but they gain advantage from being able to do the partnership. And for me that that's a real example of very large scale innovation, which is going to be brought to the market in a very secure way.

(17:31)
So Microsoft will leverage their securities, their customer base and Chat GPT their innovation. It's the same for our bank. We have our trust, we have our customer base, we have no intention of changing the trust business model, which is at the heart. We need to find the right partners. And we are done coupling Societe Generale in insurance with Shift Technologies, in data with DataEQ you could to expose all the data platform. We have a range of partnership in correspondent bank. We work with Caribat to exploit a working capital in the smaller area. We're in partnership with OneApp to do the dashboard of the future leaders. So we have managed to deploy these partnerships. Now all the efforts, especially over the last three years, have been how do we scale them? How do we make sure we scale and do we measure the value?

Jim Marous (18:20):

It's interesting, we talked about this last night, and is that what's interesting about the partnerships right now in the industry is that number one, organizations realize they can't do it alone. And the only way they can go with speed and scale is to find the specialists that can get them where they want to go. Even if their core may say they can do certain things. You have to find those partners that can get you there the most efficiently. You're going to live to make it better as you go along. I think the other thing we talked about last night was the fact that we are going to bring to the table partners that we think can do it better than us, which makes the best partner when you know that they're not going to say, no, no, we can do that, we can do that. But sometimes it's best to say what works best with us to implement for our clients. And that's authenticity, but it's also efficiency.

(19:09)
So from your perspective, Thad, what are the challenges you see in the marketplace as organizations try to implement things? Is one of them possibly trying to do too much as opposed to trying to compartmentalize their solutions or what have you seen?

Thad Vorozilchak (19:24):

Yeah, I think it could be that in a way. And I agree again with Claire, the way that you set up the thought of alignment of people, alignment of thought, and then realizing what your core competencies are versus what you will have to bring in. And I love the Microsoft Open AI example. It's an example of a great partnership. At IBM, we have several great partnerships, Microsoft being one of them. And we know that for SocGen or for any of our customers, there's going to be that want and desire to have the best solution possible for your customers. So you're going to put the pieces together in your mind that align to your values, that align to the way that you want to go to market. And so there's a ton of respect for that. I'd say more than respect, there's a huge investment from IBM to make that happen.

Jim Marous (20:15):

But to think about that. That wasn't the way banking used to be.

Thad Vorozilchak (20:18):

No.

Jim Marous (20:18):

You either were this house, or you were at this house. Or you either did this way or that way. I mean, I remember, back in your past where you're doing a complete core conversion. There's virtually nobody doing complete core conversions right now because you can compartmentalize those solutions to make it so that you don't trip up on the little hand. And right now the economy kind of dictates that. Yeah, go ahead.

Claire Calmejane (20:38):

But, traditionally innovation was about having the best talent, putting a pot of money and saying like, let's go and do it. And this in our world, with the pace of technologies that we're mentioning, cannot exist anymore. We have to understand our core components and to partners on those area. And the last challenge for me that I mentioned and we just touch on a little bit, is the value. At one point we have to be realistic. It's not about having the shiny object. It's what you were mentioning around. Rationalizing your innovation past, scaling it up, making it big, and also looking at the numbers. Because it cannot be, especially in the banking sector at the moment, just a growth game where you invest a lot.

(21:24)
And I even believe for large companies that have large R&D departments, it's the same challenges. They have much more funding than we can.... So looking at the value, finding the money and being very pragmatic is important. And you go back to the partnership with the business here, because if you work about generating growth, most of the time it'll be incremental to your business. We have to be realistic. The best transformation is the transformation of the core business through the digitalization and AI data level, that do deliver in two, three years. I have the oversight of new business model, but these are business model that will settle in a window of five to...

Claire Calmejane (22:00):

... business, whether that will settle in a window of five to 10 years. So it's much more longer. It takes more risk and you also have to validate the strategy with your bot. What's important in all this component is to really understand them and manage them and articulate them in your strategy. Because a lot of time the challenges I see is, you start working on banking as a service, but you're like, "Oh yeah, I'm going to monetize my mortgage system, my mortgage warehouse. I'm going to manage my current account warehouse and I'm going to monetize that as a bank, as a service." But guess what? The Fintechs are not necessarily interested. Even if you have a suburban giant for your 10 million clients in retail or 20 million clients in retail, they are looking for different types of components and maybe your appreciation of the go to market is not exactly the right one. So it's really how can you articulate as much as possible as part of the strategy? This is what is important for us. This is where we are doing.

Thad Vorozilchak (23:00):

Claire, I think that what you just said is so spot on. Jim, when you asked earlier about the challenges that I see, it's just that. It's not, "What do we do?" or "Is the technology available?" But back to again, "What do we not do?" Because there are so many things that you could possibly do starting with knowing who you are, back to the beginning of what we've talked about almost this whole time, is beginning with that why, knowing who you are, having that disseminated throughout your organization, throughout your partnership ecosystem, and then defining what your core competencies are, where you have needs and gaps will define your technology strategy, your business strategy, the strategies that you deploy throughout. So it sounds like you guys are doing it at SocGen and Spades, but I still see that as a very large challenge for others.

(23:48)
Because I can't tell you how many customers I interact with that even in the C-suite will say, "Well what should we do about X or Y or Z?" And you would almost think that those things might be predefined, that they might have a notion of where that would go. But so many are struggling, it's almost like us personally. You go to the supermarket aisle and there's 500 different types of breakfast cereal or you turn on the television and there are 300 channels. We're all accustomed to being overwhelmed with choices. And in the business world, making the right choices, understanding yourself, is going to make the difference between success and failure.

Jim Marous (24:28):

And the good news is we now have the ability through partnerships to compartmentalize our solutions. So people say, "What is the first thing we have to do?" I usually go to the most basic thing. I go, "How fast is your new account opening process?" And they'll go "About 12 minutes." I go, "Unless it's three to five minutes, you are failing because you're not generating new accounts that are available to you." And then what happens is they pick a partnership that can get them there and they get in the way by saying, "Oh, I liked everything you did, but I'm going to make this one rule stay in place." And that one rule is that five minute item that adds to that, "Oh, we need the government ID," just try to go-

Thad Vorozilchak (25:05):

That's right.

Jim Marous (25:05):

... for here's a better way to do it. So Claire, as Société Générale, instead of staying on the negatives, what are some of the most gratifying success you've had from the innovation process, either Société Générale, or in the past that you say, maybe because the challenge is so great, you accomplished something. What are some of the claim to fame?

Claire Calmejane (25:28):

It's a good question. There it is, a claim to fame is often when the business claim it.

Jim Marous (25:34):

And by the claim of fame for that day. And then the next day-

Claire Calmejane (25:38):

I'm accountable for the failure. When it fail, it's always my problem. Claire, [inaudible 00:25:45]. No, it's part of the job. But I think things I'm really proud of over the time is actually my teams. My teams and the digital leaders that have grown across and these are people that often, and they are all age, in my team today you have people that are at 60, 58, 42, 40, that are my direct reports. So they come for different horizons and they engage to change, to learn new things. They having very big job or the managing director of SG Venture Fund, he used to be the financial director of the investment bank. So he used to have a really huge position. So somehow you take a risk and I think it took the reward in the risk. And over my career I've seen people engaging in digital, engaging in data, taking a risk from a traditional career, and actually flourishing.

(26:46)
A lot of my team at Lloyds, they're still in Lloyd or they work in other organizations. They are head of digital of very large organization and that build the network, and often they come back to talk to my teams because transformation is hard. Transformation is a ungrateful job.

Thad Vorozilchak (27:03):

It never ends.

Claire Calmejane (27:04):

It never ends. People are like, "When are you satisfied?" I'm never satisfied and I'm always curious and I always want to know about crypto and banking as a service and different things. So really for me, the first part is my teams and all these people that have managed to make a step and say, "Actually there is something here and I want to evolve my career and I still want to learn even I'm 68 year olds. There is something here that I will manage to leverage and to build my career on." I think the second thing was really , and it stayed around people. I remember at Lloyds, my boss was all about, "Let's do something. Let's do an experiment. Let's build touch ID or biometric identification." I remember if you look on the internet, we did a vein, a ification for bank, you know, have to put your blood, and it was a bracelets. tapping your pulse, saying it was a PR experiment. That video is like everyone's like, "That's fantastic."

(27:59)
I said to my boss, for expert experiments will be the Digital Espresso. I don't know if you remember them, but it was actually a 30 minutes shot of people outside the organization, coming, standing up for 30 minutes, and preparing, talking about innovation. And the first Digital Espresso was someone from a small company, a startup at the time being in 2018, called PayPal. And they were doing payments on digital and experimentation. And I remember I booked a very small room intentionally to the point that the room was completely full at the third one and everyone was standing up around the thing and I said, "Yeah, look, something is going on here."

Thad Vorozilchak (28:40):

You sparked curiosity.

Claire Calmejane (28:42):

So it was a cultural experimentation. It was to spark interest, and when I left, close the Digital Espresso, where recast and they were watched by 15,000 people all the time, there was cinema where people were just curious about what's going on outside. And I have since then, they're gone and something else have taken in the control of things. But for me that shows that a lot of time people are focused on the what, but actually what's important is the how. And that's what we have been talking is you have why, you have your purpose. What actually you cannot identify very well what will be the future of banking. We can have hypothesis, will we go in retail for a dissociation of banking as a platform, banking as a service, maybe? Could Google challenge the trust of banking and become your primary facing? I don't know that. And there is no proof and evidence that it'll happen.

(29:36)
So I think finding the whats is always, you have to make couple of strategic bets and stick to that rather than looking at the forest and trying to pick up on each of the tree. But what is sure is how you do it is very important. You need to do it for cheap. You need to break the culture for this very long project of two, three years before you can see something. You need to enter the experimentation, and that's very unsettling for people that all their life have been a managing risk. So you need to create the right environment to say, "This skillset, how does it-"

Thad Vorozilchak (30:09):

Avoiding risk, not just even managing risk, avoiding risk. Right.

Claire Calmejane (30:11):

I would not say that. Obvious this remain to manage the risk.

Jim Marous (30:14):

But that's a big transformation to go from avoiding risk, which traditional banks do, to managing risk. That's such a different aspect for a lot of organizations. Say when we look at the banking industry as a whole right now, the world is changing so fast and it's so exciting, there's so many opportunities out there. What do you see as the biggest opportunity in the innovation field in financial services today as we look, we can only talk about short term because we've realized certainly over the last five years that you don't want to go too far into the future because it's going to change.

Thad Vorozilchak (30:49):

That's right. I think Jim, it's going to sound a little boring on the face of it, but it's one of those things that goes back to if we understand the why, and then we're solving for what, the variable becomes the how. And I think that the variable that still goes unaddressed for a large part, throughout the industry, is the customer. What we do with our customer interactions really matters. The interesting thing is the companies that I work with on a regular basis, they have a lot of the tools in place to really address customer need. Not with new product, but just with the understanding. Everything from that account opening that takes, you said 12 minutes. I would've been happy with my recent experience if it was 12 minutes, it was more like 12 days, which was crazy.

(31:38)
But because switching costs are low and because we've moved to such a digital environment post-covid where everyone expects, especially in the retail area, digital to be on par with the rest of their digital experiences, there's this opportunity gap that I see that can be filled through customer experience, and that's really driven by the data that's already there that we already have about our customers in droves. That when we're aligned we can tap into when we understand the why, we know where to tap into. And then really applying that through automation of process and other technology solutions that can be used to really increase that experience.

(32:19)
I would say, I'd venture to say, and SocGen being the exception, that if you go to the majority of the big banks there's still, and you look through the digital experience which has become the retail branch and the way that we interact, there's still something there. So I think as tried and true as it may be, you may have done a podcast in 2016 where someone said customer experience. I still think there's a lot left in CX. I think it goes beyond UI. And really digging into how you make the most of data automation and AI.

Jim Marous (32:51):

It seems you presented an opportunity at the same time talking about the risk, which what I heard was the risk is we are many times trying to deliver a digital experience without fixing the back-

Jim Marous (33:00):

... are many times trying to deliver a digital experience without fixing the back office that's still analog, for lack of a better term.

Thad Vorozilchak (33:07):

Yes.

Jim Marous (33:07):

And what happens is, the customer feels it now.

Thad Vorozilchak (33:10):

Yeah.

Jim Marous (33:10):

I went from a regular cable box at my home in Cleveland to my other home having a streaming service, and realizing the difference in experience is massive.

Thad Vorozilchak (33:23):

Yes.

Jim Marous (33:23):

Every consumer, every small business, every corporation understands what's possible. So what do you see as the biggest opportunity in the [inaudible 00:33:31] industry right now, as we try to wrap this up?

Claire Calmejane (33:33):

Yeah. To not repeat what Thad just said, because I think customer experience and optimizing your front to back journey remain the biggest opportunity. And in SocGen, when I joined, we had about 5% in digital sales, but a little bit less than that. By 2025, we'll sell about 45% of our product online and our customer acquisition will be above 60%, so that's quite impressive number when you look at the short period of time of making it very efficient, and we are also driving the NPS and the adoption.

(34:08)
But for me, if I look at the innovation side, we decided to work on two areas of the business. The first one was on crypto, and we launched a platform called, "Forge," which basically revamps all your trading chain from your primary market to post-trade, where there is a lot of hands-off at the moment on doing the emission, the clearing, the settlement, the custodian. And that, now, we have developed a platform based on the blockchain technology, and in French, the pilot regimes that emit a digital token, a security token, which enable us to do emission but also some settlements. And we've created convertible, which is a stable coin which you need to be identified for. So I'm talking about something for FI clients-

Jim Marous (34:58):

Yeah.

Claire Calmejane (34:59):

... in order to convert your digital token, in Euro or dollars or different areas. So that's really a very innovative business model that still have to find their foot, but we are attentively looking at that, and that we are using part of the component delivered of this platform to look further in correspondent banking, in global transaction. What can we do? Is there a faster way to do emission? Or in the security services business, we leverage part of the platform in order to offer new services and new offer for the custodian, for funds that may have security token type of area. And why not [inaudible 00:35:37] tokens or other type of tokens?

(35:38)
Where we are not going at all is a cryptocurrency area. So we don't do anything at SocGen because we find it's a very volatile asset. And to date, on top of that, regulators, European wise, have not been very clear around the implementation. Plus, we didn't find a natural area. The second area where we're really looking is the bank as a service. So we bought, in 2019, a startup called, "Treason," which provide also infrastructure and the card capabilities for Omnio banks, but also for corporates, in order to be much more agile. So it's bank-in-a-box, sounds like what you can find from the Starling bank-in-a-box, or other components.

(36:23)
And after four years of hard work of integrating into [foreign language 00:36:28], I believe we have a very strong player. We had MasterCard entering in equity with us, so we are the prefer best distribution on the MasterCard network in Europe, and we're very proud of this journey together, and they are here with us at Money 2020. But on the back of that, we also decided to launch a best e-commerce program which have delivered their first platform, which was really there when you know you are buying something on internet, you come to this payment plan page, which sometimes could be quite old school with identification, so not just without payment gateway in order to be this payment page and the acquisition, but we're also delivering the other part of the e-commerce suite, with credit to be given as part of the marketplace for their clients, or for other small merchant, with data prediction of their stock and how they are going to sell. So we are making a huge step on this area.

(37:29)
So I'm talking about two projects which are, let's be honest, still at the stage of development in Societe Generale, but there's a visibility of our management committee, of the board, the sponsorship, and for me, I strongly believe these are areas of growth which are significant for retail bank and also for investment bank.

Jim Marous (37:50):

Love that. Great way to end it, Claire, with that. Thank you so much. I think what the major takeaway here is innovations about people, innovations about having to know your "Why" to get anywhere at speed and scale. And it was very interesting, your answer to my question around, what is the biggest innovation you've been involved in? It was about teamwork, which was not what I... I expected an item. But again, that gets back to the way I remember you more than a decade ago, that you were the leader but you were never the person, meaning that it was my ideas. To take the power of the team, especially the vision, to go corporate wide and take in the input from all areas, that are many times much closer to the consumer than we ever were, and to really take that into account. And then, as you said that, to avoid the challenges that can get in your way, that are small, that need to be solved to be able to move forward, and not to overthink the problem to deliver the solution.

(38:54)
Both of you, thank you so much. Appreciate you taking some time out of your day at Money 2020 here in Amsterdam. An amazing amount of things to see, and I think when we come back at the end of the event, we probably come up with new ideas because there's a lot on the floor. But thank you so much, I appreciate your time.

Thad Vorozilchak (39:12):

And Jim, we only mentioned regulators once.

Jim Marous (39:16):

Yes, we had to. And actually, that's a challenge to a degree, because in most countries, the regulators are the legacy bankers. We have to, as organizations, think, "What do the regulators want to achieve?"

Thad Vorozilchak (39:28):

Yeah.

Jim Marous (39:28):

And even build around that and know that, we're in the right direction.

Thad Vorozilchak (39:33):

That's right.

Jim Marous (39:33):

Yep.

Thad Vorozilchak (39:34):

That's right.

Jim Marous (39:34):

Thank you very much.

Thad Vorozilchak (39:35):

Thanks, Jim.

Claire Calmejane (39:35):

Thank you.

Thad Vorozilchak (39:36):

Thanks, Claire.

Jim Marous (39:37):

Thanks for listening to Banking Transformed, the winner of three international awards for podcast [inaudible 00:39:41]. If you enjoy what we're doing, please give our show some love in the form of a positive review, it helps getting guests like we had today. Also, be sure to catch my recent articles on the financial brand, and the researcher doing all the digital bank report.

(39:55)
This has been a production of Evergreen Podcast. A special thank you to our senior producer, Leah Haslage, audio engineer, Sean Rule Hoffman, and video producer, Will Pritts. And a special thank you to Carson Masterson, from IBM, who came and worked on all the digital and transformational process we have here today with the video podcast. I'm Jim Marous, thanks for being.