Company of the Week: SEB – Tuesday
Tuesday – Banking and the big D
Digitalization is currently a big topic in the financial industry. Banks and insurance companies find themselves in the midst of perhaps the most extensive transformation in their history. Traditional business models are being challenged by new technologies and changing customer needs. Fintechs, technology startups in the financial area are attacking the “pain points” of the old customer-bank interfaces and disrupt the traditional ways of serving customers and earning profits. According to Credit Suisse, around seven billion francs are annually being invested in these companies worldwide. The transformation can be seen as either a threat or an opportunity, depending on the viewpoint. In any event, small enterprises can already today run their business with an IBAN current account that operates independently of the legacy or balance sheet of any existing bank, or seek peer-to-peer financing through a digital market place. Through the blockchain technology, a variety of transactions, including currency and equity trading, could be executed and settled in minutes rather than days.
I think this is fascinating. For the past weeks I have come closer to the subject when preparing a client seminar on digitalization. The seminar will bring together intersecting insights on the subject, presenting top people from the epicenter of the digital transition at SEB, as well as experts in the fintech and corporate spheres. Banks have traditionally been enablers of dialogue between different stakeholders in the society, having extensive and close relations with corporates and institutions. As our core competence is much about assessing different financial and business risks, it’s crucial to have and share insight into what’s going on in particular countries, industries and companies. Banks need to know where the world is going. Transformations are no news for banks, which have during the course of history supported several struggling companies through difficult times, caused by technological, competitive or some other changes in their operating environment. As the transformation concerns our own industry, it evokes mixed reactions from anxiety to positive anticipation. How does our bank tackle the threats and seize the opportunities, and what does this mean to me as an employee in the sector? Some say the era of universal banking is over, that it makes no sense for dozens of banks in a single market to offer all the same products and services.
Whether this will turn out true in the future remains to be seen. What will be important is putting the customer at the center of focus and developing high class services in a digitized world. Adapting organizational processes to the pace of development set by the outside world will require collaboration and simplicity, both at the heart of SEB’s values. Banks have great potential to develop their services by investing in new strategic competences, including partnering. SEB has for instance set-up an internal Innovation Lab which, as one of its initiatives, organizes Innovation Days for employees to present innovations, with the best ideas proceeding to fast-track implementation.
What the transition is likely to mean for me as an employee in the banking industry is an increased requirement for multi-disciplinary competence on top of specialist skills. Personally I think this offers a fantastic opportunity to experience the changes technology will bring to business models, customer service practices and banks’ market positions. I believe that a positive attitude towards opportunities as well as preparedness for constant learning will support one’s path forward. As the human element will in any case lead the development of high quality services, we must work in ways which the customer can experience as accessible, insightful and trustworthy. Whether a threat or an opportunity, digitalization is a ride all banks and institutions must take. So why not enjoy the ride and marvel the new horizons.
Veera Hoffmeister works in business development at SEB Finland and has ten years’ experience in corporate banking and management consultancy.