Strategic dialogue between financial players is key to future development

02/08/2021

How will securities services providers evolve in an environment in which new business models are characterised by innovation, chiefly technological, and sustainability? A discussion with Roberto Pecora, Chief Executive Officer of SGSS in Italy.

In a real, not simulated stress test, the sector has clearly demonstrated its resilience, which not only consists of having continued to provide a high-level service without interruption of any kind, but in having begun to transform the business model following numerous changes that have proven indispensable for building the future.

Roberto Pecora, Chief Executive Officer of Societe Generale Securities Services in Italy, identifies the central role of strategic dialogue with clients as the most important factor in guiding the evolution of the assets and securities services provider universe, where the new factors that emerged with the pandemic mainly relate to the content and intensity of this dialogue.

 

The right path

“The fundamental question we asked ourselves as soon as we emerged from emergency management mode was: how can we help clients pursue all the business model review projects that they will inevitably have to put in place?” says Pecora. A rethink that in the first instance and more deeply than other financial industry players concerned banking partners and distribution networks, “which in some cases, did not manage to react quickly to the change in paradigm and then had to immediately consider new solutions, also in order to benefit as much as possible from the markets’ recovery”, explains Pecora.

Partnerships in fact have a central role, which for SGSS represented a reconfirmation.

“This is how we interpret our role as assets and securities services provider”, explains Pecora. “In addition to guaranteeing resilience, security and quality tools, we pursue a service model that supports clients in strategic projects based on needs, which may be common to the market or very specific”, he adds.

Customisation is therefore a fundamental aspect, although the term does not fully reflect the scope of the business model development set out by Pecora.

“When we initiate a real strategic dialogue, we openly put on the table our respective needs but also our constraints, and decide on priorities collaboratively. We are all facing the same challenges, albeit from different perspectives”, says Pecora. “Efficiency, sustainability, technological and digital development have become number one priorities for the whole financial industry following the pandemic”.

 

Digital and ESG by design

The direction of change identified by Pecora will unfold against a backdrop of a growing market. According to Societe Generale Securities Services, the growth trend seen over the last five years in the asset manager and asset owner sector in Italy (+5%, Assogestioni, Scenari Immobiliari, AIFI data) could increase further.

“This does not mean, however, that we will not be faced with challenges”, explains Pecora.

Pressures on margins, legislative and regulatory changes, the digital revolution and the definition of the concept of sustainability in finance are high-profile questions both in terms of business and values.

“Various critical issues affect digital technology”, one of the two main long-term factors of change, “internal efficiency, functionality, business development, relations with clients. A disruptive force that affects the whole business model both internally and externally”, says the CEO of Societe Generale Securities Services in Italy.

Furthermore, in Pecora’s view, the second of the two factors, sustainability, can no longer be considered a trend, but rather “a transformative force that will totally change the way a business activity is managed”.

These issues now pervade savings management, both on the demand and supply sides, as well as internally within sector companies. As assets and securities services providers, we are fully aligned with these issues.

 
Towards a human financial institution

Because of this alignment, SGSS positions itself in terms of business development on companies in which sustainable growth lies at the heart of the strategy, also through co-investments. But this is not enough:

“We have to consider that the internal dimension is of equal value to business development. Increasingly, the financial world, but more generally the corporate world, will be judged from this viewpoint. Responsible management of internal dynamics is fundamental. Competition will no longer be on products and services, but also on the sustainability of the company itself”. Pecora therefore invites financial players to raise their mission and their vision. “You don’t have to choose between having a profitable company and having values. Competing on responsibility and on performance is an important challenge, but also offers great opportunities”.

Pecora gives the example of a project currently in progress within Societe Generale Securities Services to work on management recruitment methods increasingly marked by a spirit of collegiality.

“Engaging in these concepts in a practical manner enables us to confirm day after day the choice of dialogue and sharing as the best means of making decisions, while still respecting specific company roles that cannot fail to be present in a complex organisation”.

Another specific focus mentioned by Pecora in conclusion is that on diversity, for which SGSS has set as its primary objective a proportion of women in middle management at 40%, in addition to the quota of 50% already achieved on the management board.

Article published in Focus Risparmio on July 27th, 2021.

Chief Executive Officer in Italy Societe Generale Securities Services
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