FinTech and Finance Innovation 2025: Insights by Nicolas Gerard, Managing Director Product Management, State Street Bank
To ensure a complete overview of the future of finance, we decided to talk to Nicolas Gerard, Managing Director Product Manager at State Street. We spoke about the impact of the pandemic on internal and external collaboration, the future of finance, the importance of reliable data, available 24/7 and the meaning of open and embedded finance for a custodian bank like State Street.
The conversation was in the context of our report "Finance and Fintech Innovation 2025 – Hybridization Designs the Future of Finance Industry", which we made with EBRC.
The prerequisite of reliable data, 24/7
We live in a different world than we did in 2019. Everyone learned to work 100% from home. The industry needed to adapt and show resilience to continue the business as usual. This shift was a real blessing for some FinTech companies.
"Banks needed solutions fast, and they were open to new functionalities such as online signatures, which reduced the sales cycle of FinTechs that collaborate with banks. With treasury at the top of the strategic agenda of those typically younger, smaller companies, the resulting faster cash flow was very welcome", explained Nicolas.
Indeed, these kinds of solutions were essential, not just for online communication between banks and clients but also between banks and partners or even colleagues. It changed the way people and organisations collaborate forever.
As the workplace of the future changes, organisations need to rethink how they manage all their documents structurally. Combined with the desire to reduce the carbon footprint, it becomes essential to have all documentation and official information digitally available 24/7.
Gone are the days that you could simply ask your neighbour for certain files on paper, Nicolas explained: "We need the information at the right place at the right moment through the right channel. So your data becomes even more critical in this world. This is what we are now doing at State Street with Alpha. The Alpha proposition is all about data, ensuring the data is available at the right time, at the right moment, at the right place, and for the right insights. We can't afford to lose time looking for data."
Open data and embedded finance open a box of endless new opportunities to feed the bank with new data sources, which, in turn, can exchange these data and insights into their customers for better services.
Tokenisation is redefining the art of banking
When we asked Nicolas what the most promising subdomains to watch of FinTech are, tokenisation came second, after everything related to data. Although tokenisation already exists for some time, the surge of new blockchain and crypto initiatives accelerated the development of new tokenisation use cases and business models.
"We see much noise now about cryptocurrencies because more prominent investors are starting to invest in cryptos. This is one aspect, but we must keep in mind that tokenisation will also be used to simplify and shorten settlement cycles or business models, which will not be visible to the public. You will not know that a settlement platform uses tokenised technology", explained Nicolas.
He saw a huge potential of tokenisation also in combination with new developments in the eID. Having tokenised digital identities in the customer onboarding process would create new possibilities in identification, with respect for privacy and anonymity wherever needed.
Also, in the context of ESG compliance in the banking industry, tokenisation can help to improve transparency while reducing the cost of managing the additional audits required for a greener financial industry.
The opportunities are endless, and we are only starting to see the first bright ideas in this respect.
If you like to know more, we recommend you read the white paper "Finance and Fintech Innovation 2025 – Hybridization Designs the Future of Finance Industry", including insights of Nicolas Gerard and many more key stakeholders in the finance industry.
At The Banking Scene Conference 2022 Luxembourg on February 22, you get the chance to join the conversation. Together, we investigate how banks should pivot their role in society to continue being a trusted partner for their stakeholders in the future.