SocGen CEO: Banks will weather commercial, tech and eco disruption

The experience of the past two years has proved the strength and the economic value of banks – and they can retain that role even in the face of unprecedented commercial, technological and environmental disruption during the next decade, according to Societe Generale's CEO.

Speaking during an In Conversation session at Sibos 2021, Frederic Oudea, whose 13 years in post make him one of the most experienced CEOs in the sector, outlined key trends that will reshape in the infrastructure of the financial sector during the next few years.

The first trend he described as "The end of globalisation we know it – an end to free movement of talent across the world as it existed in the past, with supply chains also subject to geopolitical tensions; alongside the ever-growing importance of ESG to the strategies of banks and businesses of all kinds; and ongoing technological change that will continue to accelerate changes in business models."

He suggested that while the pandemic has encouraged both personal and business banking customers to spend more time accessing digital services, it has also brought some fundamental demands from corporate customers to the fore: a desire for simple cash management tools; and for standardisation between banks in common processes like Know Your Customer.

He said he also expected banks to continue to invest more in platforms that customers could use to access a broad range of banking and financial services; and he stressed that a focus on security would remain crucial.

Oudea also suggested that the potential development of Central Bank Digital Currencies (CBDCs) could also help to cement banks’ place in the financial system. “I believe that cryptocurrencies developed by central banks and not independent ones, will be certainly part of the future,” he said. “It might be more efficient, it might replace cash. … [But] I don’t think central banks want particularly to have direct access to individual clients, to the financing of the economy. They still see banks as very useful intermediaries.”

Asked what he thought the financial sector would look like in 2030, Oudea started by saying that he did not think he would still be in post by then.

He said he expected FinTechs to be continuing to help drive innovation, but that “banks will still be there”.

“Banks have shown how useful they are … [and] there is a future for banks – the ones which will invest in technology and will put ESG at the heart of their strategy; and which can anticipate the disruption to come.”

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