Fintechs involved in accelerators need to keep their independence to drive innovation, according to the deputy head of sales for global markets at Societe Generale.
“We think that it is important for the fintech to keep their agility, their independence .We are happy to accompany them, to make them grow but we don’t necessarily want them to become 100 percent Societe Generale because then you are a different animal,” says Albert Loo. “So, we want to keep them extremely motivated to push and develop.”
“If something is working well for us – for example AI based tool from Nephelai for booking error detection – it could work for other banks, other asset managers, hedge funds and so on, and we are happy to promote the start-ups vis-à-vis our clients.”
At the beginning of October, SocGen announced it was launching the second unit of its global markets incubator, opening its trading floors to fintechs dedicated in capital market activities. The deadline for applications ends on November 15.
“There are no standard terms and conditions,” for the incubation program, which will be decided on a “case by case basis”, according to the bank’s website.
Last year, six fintechs were chosen to join the bank’s open innovation platform. Among those selected was Wematch – a tool for traders to negotiate and manage trades – which also attracted investment from JP Morgan’s In-Residence program.
Also chosen was the Independent Calculation Agent – a risk management, big data analytics and visualisation solution – which has become one of SocGen’s key risk management systems, according to Loo.
In June, BBVA introduced an Open Innovation Acceleration Program aimed at all fintech and fintech-related solutions, with monthly sessions taking place over a nine month period.
But not everyone is looking externally for innovation. In 2017 Goldman Sachs set up GS Accelerate – an in-house incubator. CNBC reported 500 teams of employees pitch start-up ideas, with five receiving funding in October.
Loo says applicants to this second batch of the incubator have solutions around regtech, risk management, alpha generation with alternative data, and some specialised algo trading applications. Many have focused on robo advisor solutions and social trading, but Loo says the bank are looking more market facing solutions.
“We already had a look last year [at social trading] and we continue to look at it, but it is not necessarily at the heart at what we are doing,” he says. “It is more for retail, I would say. And robo advisors, this is something that we are considering, but here again this is more for retail, or wealth management.”
“I think on this matter we thought it was very important to focus only on global market activities which is very narrow. It is a very small vertical but at the same time it allowed us to make a difference in the sense that when you talk to expert fintechs specialised in global markets we immediately connect and understand each other as we speak the same language.”
The bank has also received some applications around crypto assets and blockchain. But, Loo says SocGen remains “cautious” particularly around crypto currencies.