BNP Paribas Securities Services’Head of Operational Risk Management, Nedjma Bellakhdar, and Chief Transformation Officer, Andrea Tedone, say that together, they have found the two essential interlocking components in maintaining the competitiveness of the business and maintaining clients’ trust for the years to come.
At a time when everyone is talking about banking transformation, digitalisation, crypto-currencies, cybersecurity, it seems that you have found the secret formula to define the future of your business. Can you tell us more?
Nedjma Bellakhdar: We can talk about a secret formula, but in fact, the ingredients are very simple.
Andrea Tedone: Indeed, we consider Risk Management and Transformation on the same level.
“ Things move so fast that no one can be strong on their own anymore.”
Why is that?
NB: The transformation of an environment and the risk monitoring of the environment itself are closely linked, and act together to upgrade the services to clients, time to market and related operational framework. From an operational risk perspective, lack of transformation can become a major issue. I am not only talking about new technologies - artificial intelligence and blockchain for example, I am also referring to enhancing the existing processes. Making them more efficient is key to maintaining the competitiveness of our business.
AT: I consider Transformation and Risk monitoring as feeders of each other in the sense that transformation brings innovation to the bank through technology and processes redesign and optimization, including automation, machine learning and artificial intelligence,that in turn reduces risk. At the same time, transformation introduces new risks such as cyber-risks. Ultimately, both are necessary within our organisation to maintain and feed client trust for the years to come.
How do you achieve financial transformation?
AT: Firstly, we need to look at it from the BNP Paribas Group perspective. We are able to provide a “one bank model” capable of providing all banking services with the related added values for our clients in terms of simplification. This holistic exercise involves all stakeholders in the different poles of the bank and in particular our colleagues from all departments, who are constantly learning new skills aligned with the requirements of our clients, the market and our leadership.
“Our risk approach has moved from a ‘no’ to a ‘yes, and’ approach, opening the door to a world of innovation.”
By that, you mean Upskilling?
AT: Yes, the situation we find ourselves in at the moment is an opportunity to implement clear career paths for all our experts and professionals, so that they have a clear vision of where their careers can take them over the next three to five years. Alongside this, we involve our clients to develop up-to-date solutions and technologies, often in co-design mode. And we constantly interact with the regulators and the complete innovation ecosystem such as the Luxembourg House of Financial Technology, the Big Four firms, ALFI, the Luxembourg Private Equity Association and the Luxembourg Alternative Administrators Association. Things move so fast that no one can be strong on their own anymore. For example, we recently teamed up with our competitors regarding the EU’s DAC6 legislation and we call this co-opetition.
NB: Financial transformation is a permanent invitee in risk management. We contribute to financial transformation by supporting the business in its transformation journey: our risk approach has moved, for few years now, from a ‘no’ to a ‘yes, and’ approach, opening the door to a world of innovation.
How is ESG impacting your work?
NB: on several levels but let us focus on the two main ones.
On one hand, risk management contributes to enforcing the Group's ethical strategy, standards and commitments by identifying potential non-compliant topics, transactions with our clients for example. ESG targets and actions can also be differentiating factors in deciding which sectors our bank supports and accompanies. On the other hand, “People” is a key topic for our bank and in operational risk management. We promote diversity, amongst other things, even if this goes beyond the risk management mission itself. One of the concreate actions our ExCo decided to put in place recently is registering a pool of speakers with a number of market associations to enable them to reach out to us, offering the opportunity for gender parity at their events. This action was initiated in the context of the #JamaisSansElles (#NeverWithoutHer) movement through which we have committed to refusing to take part in events that involve more than three people if they do not include a woman.
AT: Banking will be very different in 10 years’ time and ESG is one of the drivers behind that, both in terms of products and services, as well as risk management. BNP Paribas’ mission is to build a sustainable future by harnessing the power of trust, expertise and innovation; BNP Paribas Securities Services’ ambition is to be the leading positive impact asset servicing provider. We aim to make a difference for our clients, for all our stakeholders and for society at large. On the subject of upskilling, we are building our ESG expertise to fully optimize the way we service our clients and support their engagement to invest in a sustainable tomorrow. The implementation of new technologies, such as crypto-assets and blockchain, is another. We are testing, trialling and experimenting. Retail banking will be impacted more than the investment industry, but we still need to anticipate new patterns of interaction that are not visible today, and monitor emerging trends all over the world. A diverse team is clearly better equipped to capture all the opportunities that the future holds.
NB: The secret is out: our key to success for banking of the future is to deliver simplicity to master a world of complexity in the fund industry.