As part of Societe Generale Global Solution Centre's 'Tech Connect' initiative, I did a webinar on 18th June 2021 on the topic 'Influence of Fintech on the Banking Sector'.

1. INFLUENCE OF FINTECH ON THE
BANKING SECTOR
1 8 . 0 6 . 2 0 2 1

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AGENDA
1. History of Fintech
2. What started the Fintech growth?
3. What accelerated the growth of Fintech?
4. Fintech Growth & Impact – Few data points
5. What changed for the Banking Sector?
6. What can Banks do to gain Fintech Business?
7. Future Models & the Ecosystem
8. Technology Enablers
9. What is Societe Generale doing in the Fintech space?
10.Q&A

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HISTORY OF FINTECH
Source: e-ziggurat.com

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WHAT STARTED THE FINTECH GROWTH
2008 Financial Crisis
Distrust of the
traditional banking
system
Educated Financial
Professionals lost
their jobs
Increased the compliance
obligations of banks
(Dodd Frank Act, Basel 3, JOBS Act)
Operational cost
reduction
(e.g. straight-trough processing)
Smartphone
penetration
Contraction of the
interbank market
(e.g. trust issues)
Public Perception Post Crisis Regulatory Reforms Technology

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WHAT ACCELERATED THE GROWTH OF FINTECH
 Capital Funding
• Investments in fintech companies have grown more than nine fold since 2010 and more than doubled since
2015
 Technology Advancement & Digitalization of Financial Services
• Smartphone usage and Penetration of Internet. 5G is only going to increase this acceleration exponentially
• Online KYC and digital signatures
 Regulations that supported and encouraged FinTech
• European Union’s PSD2 (Second Payment Service Directive)
• License for payments banks, Recognition of P2P lenders as NBFCs, Startup India
 Sharp Focus
• focus on the customer
• focus only on one product or service
• focus on new technology
• Focus on underserved areas of banking
 The Rise of Alternative Finance
• peer-to-peer lending, crowdfunding, and invoice trading
• SMEs benefit from this setup

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FINTECH GROWTH – FEW DATA POINTS
Source: Statista 2021& CB Insights

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FINTECH IMPACT – 2016 SURVEY
Source: pwc

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WHAT CHANGED FOR THE BANKING SECTOR
 Growth of Digital only Banks
• These bank were early adopters of Mobile Banking
 Acceleration of Digitization
• ex. Chatbots, Roboadvisor, Account aggregators
 Embrace Cloud based Technology
• IaaS, PaaS, SaaS
 Adoption of Agile Model
• SAFe (Scaled Agile Framework) & Spotify
• New roles such as PO, DevOps & SRE
 Openness and Collaboration
 New Laws and Regulations
• PSD2, GDPR, …
 Increase in M&A
• Specifically smaller banks/community banks
• The first French bank to acquire a Fintech back in
2015 with Fiducéo
• SocGen acquiring Shine (a Neobank) in 2020.
This was part of SocGen’s open banking journey
 For Consumer
• Accessibility and Financial Support
• Changes in consumer behavior

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STILL EVOLVING, BUT GOOD PROGRESS BEING MADE
 Open Banking
• Challenges remain around monetization and revenue impact
• Lack of business and revenue focus in these initiatives
 Banking as a Platform/Service
 RegTech (Regulatory Technology)
 Bank + Fintech partnership
• Societe Generale, recently announced that it has formed a partnership with Kyriba, a cloud-based finance and IT
solutions provider, to launch a new treasury management solution including payment automation and fraud
management functionalities

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WHAT CAN BANKS DO TO GAIN FINTECH BUSINESS
Upgrade Core Infrastructure
- Banks legacy systems cannot do seamless integration with Fintech stack
Focus on User Journey
- Shift from Product based selling to Solution based selling
Build trust with customers/clients
- When money is involved, trust is everything
- Improve on customer support
Time-To-Market
- FinTech have an upper hand due to the size, tech stack, process,….etc.
Partnership & Collaboration
- Take advantage of the Collaborative Fintech ecosystem

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COMPETITION FROM TECH COMPANIES
Source: societegenerale.com

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FUTURE OPERATION STRUCTURE OF A BANK
Source:PWC

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THE ECOSYSTEM
Source thefinanser.com
Source thefinanser.com

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TECHNOLOGY ENABLERS
 RPA (Robotic Process Automation) –Automate anything that is repetitive
• Customer onboarding, account maintenance & closing, trial balancing, credit card and mortgage
processing
 Artificial Intelligence & Machine Learning
• AI will reduce 22% of the bank’s operational expenses by 2030. That is equivalent to $ 1 trillion in savings
• Chatbots are being widely adopted to service customers and employees
• Identify and prevent Cybercrimes
 RegTech (Regulatory Technology)
• Reporting, monitoring, and compliance
• Reg-Tech with the help of Big Data and ML can offer crucial data on money laundering activities
 Blockchain
• Cross Border Payment – JMP Coin (Digital Coin) on Onyx Platform from JPMC
• Smart Contracts
• In April 2021, Societe Generale issued a €5 million structured product as a security token on the Tezos
public blockchain

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WHAT IS SOCIETE GENERALE DOING IN THE FINTECH SPACE
Source: societegenerale.com
Open Innovation Platform
SG Ventures
Banking-As-A-Service

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OPENINNOVATION.SOCIETEGENERALE.COM
Source: societegenerale.com

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OPEN INNOVATION CENTERS @ SOCIETE GENERALE
Paris #LEPLATEAU
1,000m² dedicated to open innovation in startup mode and located in The Dunes technopole, Le Plateau hosts external
startups full-time freely for 6 months and internal startups/projects for acceleration. The external startups can be
recommended by SG Scouting team, by the Group’s core businesses, by the pilot team in a POC, by a partner or may have
been founded by an employee
Paris GLOBAL MARKETS INCUBATOR
Incubator dedicated to market activities and launched by SG CIB to co-build high-performance offerings with Fintechs that add
value to services for clients
London #SG Greenhouse
An Incubator connecting the London FinTech ecosystem to Societe Generale Group. The Greenhouse promotes collaboration
between internal projects, start-ups and spin-outs and hosts the London cohort of the Global Markets Incubator
Bangalore CATALYST
Based in Bangalore, the program brings together experts, technology startups, Fintechs, incubators, funds and academic
institutions with Societe Generale business leaders to deliver practical solutions to the banking industry
Luxembourg #LEPLATEAU LUXEMBOURG
The innovation lab of Societe Generale Luxembourg aims to promote collaboration between internal project developers,
startups and Fintech ecosystems in Luxembourg
Source: societegenerale.com

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SOCIETE GENERALE VENTURES
Source: societegenerale.com

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SG MARKETPLACE
Source: societegenerale.com

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EXAMPLE OF AS-A-SERVICE THAT WE PROVIDE
Source: societegenerale.com

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READING MATERIAL
rbsa.in/research_reports.html
(RBSA Advisors)
www.pwc.in/consulting/financial-
services/fintech/point-of-view.html
or shout ‘ALEXA find pwc fintech POV’

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