Paula da Silva, head of transaction services at SEB, talks about the key trends and factors driving the growth of its transaction banking business and where the bank positions itself amidst the various new technologies emerging today.
Here is the transcript:
Paula da Silva: So, transaction services have been a quite prosperous business for us during the last period of time. Even if we have negative interest rates in quite of our few markets both in Denmark and in Europe, and in Sweden which is part of our home base of course. So, it's quite challenging in that sense. At the same time, I think we are trying to deliver value added services not only accounts to accounts payment services but the advisory around it. So, therefore we are still doing quite well with the customer base... But there is quite high demands coming from the northern areas in terms of real-time and all the new areas as well. So, it's both. We are also thriving in trade finance and receivables purchase which is a different area for us. But very much core to our customers and our business. So, all in all, we're doing quite good.
Well, in so many aspects we're trying to collaborate with the new world of fintechs in many areas. So, we're trying to explore what is out there. Because nobody knows, I think right now, how this will be in the future. So, we both explore the blockchain for both trade and for cash through both R3 and Ripple, for instance. We put it in production and it trade out. We don't know if it will prevail or will see how it is. But we are very, it's very important for us to deliver better service to our customers. And this is one way to do it that we think is really good for some areas not all blockchain or any other technology will never solve it all. It’s a lot about legality and the agreements between us and other partners and also between us and our customers. So, that still needs to be in place. But we're also going in to the GPI world with Swift. So, we really tried it out in many different areas to see if we can deliver good service, meanwhile everything is being implemented. And also, robotics, we use that quite a lot. We have recruited IDA, that is our new robot. It's an agent that we are really using and she's serving our customers as well alongside the human delivery. So, we explore the area and we think it's important not only to have strategies but to really try it out, potentially fail but then continue to try it out.
I think it has a fantastic potential, payments-based, I don't know exactly, but for sure, first in trade finance where we need to check one contract versus the other. One document against the other and that's an area I'm pretty sure we’ll be able to help us out. We are exploring that together with R3 where we are investing in projects called “voltronics” together with quite a lot of other large banks. And trying to use that for our, you know, the easier LCs to start with. And we'll see how that works out. But customers are really thrilled about that. Because trade t is such a heavy paper-based service. So, we think there's a really good use case for both us and our customers.
I think what we have done in the banks is really that we put everything together. So, we have a big breath of products where customers don't have to go on shop for every single little thing. And that, I think, is really important because nobody wants to have hundred providers for one service. So, I think we have a really good role to play. But of course, there are disruptive and much better providers for that little slice and I think for us, it's our responsibility to work with them, to make and enhance our product for the customers. So, it's not contradictory, on the contrary, it's complimentary. And from being disruptive to us investing in fintechs and really putting their service into our world or even use them instead of us in some areas. But still, under one hat. I think it's a fantastic opportunity really.
Yeah. It could be one of the answers. I think that it's so cumbersome for banks, hundreds and hundreds of banks, for thousands of banks to come together and agree on something. Because it's not about the technology in that sense. It's agreeing the legal terms and all of that. GPI absolutely, we have product that on we think it has fantastic potential. But, it might be too lengthy, the process, to agree. But definitely, I think that will solve some of the issues as well. So, fintechs, GPI in this world, our own solutions, blockchain, maybe it's all of combination of things. And we put it altogether in a good and nice package to our customers to use both the old banking world and the new fintech world. And have an easier onboarding and easy to use access. That's our aim.
Well I think most of the regulation is really protecting actually both our customers and us. So, it's a really good intention and I think it's necessary for the banking world to have a transparency in this end. Nobody wants to do, you know, illegal transactions. So, nobody wants to deal with criminal activities. So, in that sense, it's really, really good that we work together. This is not a competition. It's not a competitive advantage to do more or less AML. We need to work together on this. Implementation is really heavy, it's quite a lot of things to do and we don't have the tools properly. So, we need to work together with the fintechs, and the big providers on the tools around it. I think it's, in reality, enhancing our industry in a very good way. As long as we put it into our systems and start working with it. I think we are in that phase right now. We have stop complaining about regulation. I feel we're adjusting to how can we use it instead. I think CEPA, for instance, in Europe, with the euro payments, gave us something really good, which is a set of standards in terms of XML. So, now the whole wide world basically works with XML; it is really good for our industry. But then of course, it's a big challenge in terms of investments as well; and to cope with both the regulatory part and the new product delivery; it's a tough balance but it's the same for all industries. Security, and the car industry or in anything else. Everybody has to live with this. Making a better world at the same time. So, I think let's hang in there.
Sure, I think if I summarise it in one word, it's implementation. We've talked about all of these things, and now we're trying them out. And eventually we will know that we go further for this area, we go in this, for that area we will go with that. And that's the key of it. That's what I take home. Let's experiment, let's work together to create more agile and better time to market for the corporates and the private individuals to use the banking world in the future so that we become real, maybe we are the banking fintech in the future.