September 7, 2022
Headquartered in Paris, Societe Generale is the seventh largest bank in Europe and the 18th largest in the world. SocGen, as it’s known, has more than 130,000 employees serving 30 million customers in 61 countries.
SocGen has a longstanding commitment to digital transformation, betting on innovation and the intelligent use of technology to better serve its customers. The bank believes that capitalizing on digital maturity and taking a disruptive approach will allow it to meet the challenges of the future.
The bank has been a strategic acquirer of French fintech startups, buying 100% of Boursorama, the leading online bank in France, in 2015, Treezor, a provider of outsourcing and white label solutions for electronic payments, in 2018, and Shine, a mobile bank that offers a management platform to freelancers for online banking, in 2020.
Societe Generale Ventures, the corporate venture arm of SocGen, is a strategic fund that supports SocGen’s business lines by investing in early- and growth-stage startups. The fund prefers to participate in Series A or B investments involving amounts of between €1 million and €10 million and has deployed more than €230 million to date. It also finances internal projects led by staff.
Claire Calmejane is Chief Innovation Officer at Societe Generale, having joined in 2018. Her role is to accelerate SocGen’s digital transformation and develop new business models that provide responsible and innovative financial solutions to clients. She is also Executive Chairman of Treezor and President of Societe Generale Ventures.
Q. Claire, Societe Generale is a massive institution founded more than 150 years ago. You joined in 2018 to help the bank reinvent itself. It seems like a daunting challenge. How did you decide where to start?
A. It’s not so old. Only 150 years. The bank I was working at before was 250 years old!
One of the things that convinced me to take the job at SocGen was that they really had an innovation DNA. One of their values is innovation. They have made in the past and are making now strategic bets in the business.
For example, we just announced we proposed the acquisition of Leaseplan, for EUR 4.9 billion, to create a leading global player in mobility worldwide. This is a huge strategic bet for the banking industry. We are saying that what is important now is this mobility as a service area. That is the type of thing you are not going to see from all banks!
In a similar fashion, SocGen bought Boursorama about ten years ago. Now it’s a leading franchise in France with more than 3.3 million clients, and recently there was an announcement that we are way ahead of the market in terms of the customer journey, customer satisfaction, and penetration in a new area. If there was one bank in Europe that was going to fully embrace innovation and change the landscape, it was clearly SocGen.
Where I decided to start is a good question because when I arrived, there was a program in progress, a huge intrapreneurship program with about 60 startups. In less than five months they had been incubated; it was super intense.
When I joined there was practically nothing else. The corporate venture capital fund was not existing. The program was decentralized in accelerators and incubators world-wide. I could spend my day with all these startups because they are so fascinating and their businesses could grow, but is it the right thing to do for the bank? Where are we heading? And, how to best operate this job which is at Group level and covers all the digital and all of the innovation across all of our business — retail, investment banking, and mobility — across different regions, including Europe, but also the U.S., Asia, Africa, and Russia. It was a real challenge.
There were some great ideas among the startups, but there were some that really were not relevant to our core business. SocGen does not have the strategy to become the minority investor in a startup. Our strategy has always been to maximize synergy with our business and to be the majority shareholder. If we cannot meet these criteria, then what are we pursuing?
I started with interviews of all the CEOs across the businesses. How do you see the business evolving? What are your priority needs? I identified some quick wins, especially in retail, which I knew very well, and that we needed to build the next-generation leaders. That’s really where we started.
Q. What does your innovation team look like and how is it organized?
A. My team is about 45 people split between the digital team, with about ten working on digital transformation with all the CDOs of the different business lines (we have about 25 business lines and service lines in the Group and each of them has a chief digital officer that reports to the executive committee), then we have about 20 people in AI and data that focus on enabling the CEOs to generate use cases that are really strategic to train all our people on how they can better use data. Then we have data scientists because sometimes smaller entities cannot afford dedicated resources in data science, so we supply them. We have an interest in seeing the business lines grow theses skills; we don’t have an interest in growing these skills centrally. We prefer that the teams grow within the businesses.
Then I have the platforms team that work on the Bank as a Service and Bank as a Platform models. And, I have the venture team. Within SocGen Ventures we manage the portfolio, and besides that we have four strategic ventures, which are each of them 200 people; for some I have operational responsibility directly.
Q. What are your top innovation priorities for 2022?
A. I will highlight a few.
We have just set up all the strategic monitoring for the transformation. It’s about setting indicators of the real impact of the digital transformation for the business. What I mean by that is what is really your percentage of sales penetration, acquisition penetration, and not just measuring the performance of the technology. We are converting that into NBI. One of my main priorities is to grow this NBI based on the technology we have already delivered to make sure we are really taking the profits. We have put in place all the strategic monitoring, but there is still some work to be done, so it’s really one of my main priorities.
Another priority is the data transformation. We have about a €230 million portfolio in the data and AI use cases. We think we can go much further, generating more strategic ideas in terms of data products, especially like consumer connectivity, or these types of things. What are we doing in terms of core competence to really scale these technologies?
I mentioned that we’ve made four strategic acquisitions. One is a banking as a service company called Treezor. A second is the neobank for professionals called Shine. Then the ecommerce platform for online sale of used cars called Reezocar, and the last one is Forge, a fully digitized platform managing digital-native financial products registered on the blockchain, for securities trading.
My challenge is that we have made very good progress in terms of how we integrate them, but now I really need to make sure that they can develop to their full potential within SG. And that, as you can imagine, requires a lot of time.
Q. What is your “strategic cockpit” and how has establishing it helped the bank achieve its digital transformation objectives?
A. This is what I was mentioning when I talked about the way we track all our initiatives. Basically, you know we have a dashboard where business by business is mapped out: here is the NBI I want to achieve, X percentage of sales done this way, et cetera. So now we have defined everything, I spent a lot of time to build it but now I am following the numbers month by month. As an example, in 2022, more than €230 million in GOI through the AI/Data program and we’ve just announced 39% digital acquisition and 28% digital sales in our Retail business.
There is a virtuous circle about it because then you start to better understand where your IT investment is going and what it is doing. It’s like what the startups are doing in their own markets. You much better understand what your client wants, where are the trends going, and you are able to make bigger strategic bets. Rather than being a market follower, where you just invest in all the features of your digital infrastructure and you are defensive, thinking you need to do everything, you are able to find a couple of nuggets where you know you are going to be the only one to offer a very sticky service that brings your customers into your digital ecosystem as consumers of these services. That’s the virtuous nature of the circle. Plus, in a bank, I think people love dashboards.
Q. How do you create a culture of innovation within such a large and established institution?
A. I’m lucky. As I mentioned, innovation was already one of the values of SocGen. There are four values: responsibility, commitment, team spirit, and innovation.
I’m the incarnation of the innovation value, I work for the innovation value, but the culture of innovation was already here. When it’s one of your four core values, that means that your recruitment process, onboarding process, personnel processes all encompass the innovation value. We created our Mission Statement last year; innovation is part of our purpose. It’s part of each step in the journey of the colleague within Societe Generale, so it was already there.
Maybe what was kind of missing was the spark, with all the regulation and all the problems of remediation that the bank went through. Maybe there was the need to reignite a little bit this value, but the fundamental value had always been there since the creation of Societe Generale.
Q. Are you able to attract the talent that you need, both to your team and to the bank in general? It’s a very tight market for tech talent right now, and for innovation talent, at least in the U.S. Incumbent firms often struggle to attract top programming talent and innovative entrepreneurs generally prefer startups like Lydia rather than legacy firms, or tech giants like Facebook.
A. You know, the tech firms become big, plus, we are seeing in the U.S., they are starting to become more regulated, so they have other priorities with the scrutiny they face, and so — to a certain extent — they face the same challenge as banks in their transformation.
On the venturing side, we’ve kept their identities. You cannot look at the identity of the startups and figure out that they belong to Societe Generale. Treezor is not like Societe Generale, with the red and black. Users of Shine, they really don’t know it’s a subsidiary of SocGen. So I will say that on the venture side, we don’t have much of a problem. Plus, we are seeing several SG staff willing to embrace a startup career, tapping into our deep expertise around operations, compliance, finance, HR, and some specific areas.
Now, what’s happening in France, with the huge fundraisings, all the markets are super tight. When you have like 10 unicorns appear in 10 months, of course everyone is looking for the best CPO on the planet at the same time.
A lot of the people in the innovation team are starting to come from across the group at Societe Generale that we train. We have training programs to reskill them into say, digital strategy. Data scientist is something we do have to look for in the market and we don’t have many issues, but a lot of people, they are in the group already.
The objective of the innovation team is not to retain people forever. We say you’ll come in for two or three years, you’ll work hard, you’re going to upskill yourself, and then off you go, back to a business unit to apply all the skills you learned. Or even go to one of our startups.
Some of our alumni also go in the market to a startup, or they set up a startup themselves. I have two people who have left in the last few years who have now founded their own startups.
Q. What should we know about the Societe Generale Open Innovation Platform?
A. About 6,000 colleagues in the bank are using it regularly. When they have a meeting with a startup or when a startup contacts them they can see if they had a meeting with the bank already and what is the status of our relationship with them, and understand if we have something in production with them or if it is just talks. That is quite good.
What is important is to have commercial partnerships which are really, really scaling. We have several commercial partnerships which are quite huge. For example, we have one with Dataiku, which is a data platform. We have one with Shift Technology in our insurance business which is doing all of these analytics.
What I mean by that is that of course we learn a lot about a lot of different stage startups through our startup team or our investment team. But where we are now is asking who the big partnerships are we want to scale, because that makes the difference.
We are not any more in the discovery phase. Now I am looking at what are the things in three years that can massively change our NBI generation with products that can maybe not evaluated completely yet but can extend our Bank as a Platform and Bank as a Service strategy.
I find that much more interesting and much harder to do because how do you scale the partnership between the corporate and the startup and how do you really deliver value for the clients and value for your shareholders?
Q. So how does the SocGen Global Markets Incubator fit within that strategy? It seems to be targeted at earlier-stage companies and only those focused on global markets.
A. I’ve been describing the Open Innovation Platform and what we are doing in my team directly. But we have four or five centers worldwide. We set up one small team in Germany, one small team in Singapore, one in Africa, and an emerging technology lab in France. That’s my team.
In each business line, they have chief digital officers who are executive committee members and these chief digital officers are normally the heads of innovation. These heads of innovation define the open innovation strategy that best fits their market. So for Capital Markets there is a head of digital and they have set up an incubator because there is a lot of things startups can do for us in terms of using new technology without us needing to develop it.
That’s the way we started a partnership with a space called Le Swave, which is a biggest fintech incubator in Europe. We started the partnership with them to source fintech startups and we want to work with them. We’ve done that in Paris and Singapore.
Generally, we work with five, six startups and we’ve invested already in two of these companies — Opensee and Wematch. Wematch is doing institutional brokerage and Opensee is doing a big data analytic solution for capital market. We invested in these companies to reinforce the commercial partnership. So we have different ways of working but all of them are very, very productive.
Our Global Financing business and client services, they didn’t go for that. They created internally an incubator. They said okay, for us we prefer to ideate by ourselves and to create the startups from within and then they will scale. The Global Financing business, they have created two startups which are scaling up. So it’s very different from one business to the other.
For me, it doesn’t matter. We just need to do what is good for them. What’s important for me is that we really care about the KPIs and what they generate.
Q. What advice do you have for startups about building successful partnership with incumbent firms?
A. The cycle for corporates is difficult. It’s quite long. The reality is you can do a proof-of-concept quite easily, but the time for scale is always about — I’ve been doing this for a long time, now, Jim, in various fashions — the time for scale is always about two years. And the success rate of a bank working with a startup is probably 30% to 50%.
It really requires in the business someone that is passionate about your project. You need a change agent within the business who is passionate about the project and can carry it forward. That is the best success I have ever seen because it’s really where it makes a difference — they really understand the product and they really value the partnership. So one solution is to find this rare person in the business who is doing the most in your area.
If the innovation team is good, they give you a reading of the organization. We tell you this is a really good idea for this business, or don’t go there because they have other priorities and are not going to talk to you.
Generally, at one point, I meet some of the CEOs of these startup companies. We discuss how to make a strategic agreement together. For me, it doesn’t take a lot of effort because I know we have five, six, ten goals within the organization. It may not work immediately, but the fact is that we keep the dialog between the CEO and the head of innovation to understand, do you have the right reading of the organization and its priorities.
The last point is that at SocGen we organize regularly breakfasts for our top management team with the startup founders. We do it in partnership with France Digitale, which is a tech institution for startups in France, and they have a lot of success. We generally gather five, six, seven CEOs with a member of my general management. My observation is that it each time we do it, the Deputy General CEO or Frédéric Oudéa, Societe Generale CEO) take action directly. In the structure, people see that the top management is super interested in making this work.
Q. You mention your venture fund, which is very active. Societe Generale Ventures has a portfolio of nearly 30 active investments including Entelligent in the US, and Finbricks in the Czech Republic. How do you help them succeed? How do you leverage the strength of Societe Generale’s business and service units to help them?
A. The rationale for us to invest is the commercial partnership. We don’t invest if there is no synergy with Societe Generale. We don’t do opportunistic investments. We are not a VC, we are a corporate VC.
Societe Generale and Entelligent recently partnered to create climate-aware investment indexes, which are now being offered in insurance products. These “smart indexes” seek to identify companies that are taking positive climate change action, reducing investors’ exposure to climate change risk.
We invested last year in Fintecture, which is a request-to-pay services institution that is part of the offering that we distribute to our commercial clients. So they are very close, the startup and the operational line, distributing the product to the customer, and for us it’s a product we cannot afford to build, or we don’t have the time, or there is not enough market share, so there is no strategy to build the capability for ourselves. So it’s very tight, the relationship.
For Fintecture, they wanted more visibility in the ecosystem, so we say we are going use our partnership and our network to provide you with more visibility. Then, we identified that they were using a competitor of Treezor to do part of their account management. So then we said, okay, we would like you to use Treezor. Are you okay to do that? So then we are doing more together, rather than you growing a competitor of the business. That’s one very concrete example.
Another one is Skipr, a mobility solution for B2B. It was directly integrated and became fully part of our mobility as a service platform we offer to our clients.
As they move forward, the startups may need banking accounts in different countries, financing facilities, Treezor (why not?). Skipr is built on Treezor. So yes, of course, there are synergies, and for more mature startups, we are trying to create networks between them for their CPOs, for their CTOs, financial directors, so they can exchange in a closed environment around what are their challenges, and it is our venture team which is organizing that.
I am giving you different examples because it is not a one size fits all. There is no magic formula. It is mostly around what they need at one point in time. It happens that we are doing it very naturally, but the SG Ventures investment team is all about developing and strengthening a commercial partnership to increase our offering or increase our efficiency either as part of our new business pipeline or as part of our digital transformation.
We’re very open with the startups, we just ask why they want to take a bank as strategic partner. Really, it happens with a startup that as they grow they want to “delete”, actually, the strategic partner and increase exposure to VC and private equity and we do understand that as a rule of the game. And sometimes they are very happy to have a bank at their cap table because it reassures some of their clients.
I think at the beginning it was also a way for them to prove they are one of the main players. It’s nice to go to your clients and say you have Societe Generale on your cap table. It can help attract more deals.
Q. Are there particular types of startups that SG Ventures is currently looking for?
A. At the moment, in the pipeline we have a couple of ESG propositions. As a group, we are trying to increase our ESG offerings. One of the ways to do that very quickly is to do this type of partnership. So I’m seeing a lot of deals around that. Deals in the capital markets from the Global Market Incubator. And, in payments, because as I mentioned in payments there are so many solutions out there now we are thinking we don’t have to reinvent the wheel. A Payment & Transaction Banking Accelerator will be launch in March for startups on this field.
In all cases, it is important for us to have a commercial rationale.
Q. What are your thoughts on the Paris fintech scene? Up until maybe last year, I don’t think people understood how much fintech activity there is in Paris, and how strong the ecosystem is. What does it need to get to the next level?
A. Of course, there is a lot of buzz in the Paris ecosystem because prior, compared to Germany and the UK, it was a little bit lagging. They have more unicorns than we have in France, and so there was a margin for improvement.
I think there are a couple of things to keep in mind. One of the reasons that I came back in France was because I recognized — it was probably seven years back — when I started working in London and I had the opportunity to meet all the CEOs of the fintechs, I saw that in Paris, the same was going to happen.
In Paris, the key came from the fact that the President directly was committed. In the UK we had a lot of strength around the Prime Minister. It really started with David Cameron who implemented policies and lured entrepreneurs back from the U.S.
I’ll mention the U.S., Jim, because you are there. In the U.S., it seems like everyone has a fintech startup! You have the Nasdaq, et cetera. Europe was behind the U.S. and behind Asia. It was time for Europe to build the business of tomorrow because if not, we will just consume U.S. and China solutions in the future. And you know, to some extent, there are questions about sovereignty.
In Europe, the UK is a very strong hub, very mature but it has been a little bit impacted by Brexit, because they suffered from the change in regulation. It is one of the challenges they have to overcome but their ecosystem is very mature. There is a lot of private equity. You know, the reality is that it is easy go from the U.S. to the UK and from the UK to the U.S. The bridge is very, very easy in terms of capital flows, understanding, and transit.
Germany has built a strong hub, and has a lot of unicorns in the pipeline, but the challenge for Germany is they are very spread. They don’t have one location. In the UK, it started in London. In Germany, you have Berlin, but you also have Munich, you have Frankfurt, and Hamburg, and the talent is spread a little bit, and talent is one of the key reasons for an ecosystem, and the proximity to regulators, when you are at the beginning of this story.
And France, now is really emerging. I am starting to see now people leaving the big companies and the big startups and setting up their companies. We see those founders of fintechs like Lydia, Qonto, are starting to do seed investing. But is still very early. It is third, fourth generation. When you are in the UK it is already ten, 15 generations later, yes?
For an ecosystem to grow, you need the ones that have been successful to mature the new generation of entrepreneurs. That’s one of the key things. It really works when you set that up properly.
Obviously, the first one I should have mentioned is that we needed capital. But I think now, capital is there. There are about ten growth funds arriving in France, plus Tiger, Hesodophia-Tencent, Softbank, General Atlantic that have put France on their radar map.
I think it’s more around the coaching and the talent building and sharing expertise and building the next generation of entrepreneurs. The challenge is if the big ones are raising so much money, they’re going to suck up all the talent. The new startups are not getting the killer people because they are at the big startups. We need to get that right, and to get the coaching right.
So talent is one of the key points and it’s a challenge for France. It’s getting better, but not everyone is a native speaker in English, and a lot of companies they don’t hire people who speak English, and it’s a barrier. If you are from Romania it’s easier to work in London. In London on my team we had people from Russia, Romania, Czech Republic, France, the U.S., Spain, Australia. From all over the world. They are coming from everywhere because they can all work in English. That’s a challenge in France because it caps your talent to French people, even if it’s changing.
And maybe the third challenge is really the economics of the scale of the market. If you launch in the U.S., your market is the size of the U.S.! You have 330 million potential customers from your day one.
In France, you launch a product and you have only 65 million potential customers. Then you add the language barrier, and then policy and regulation barriers, et cetera. The economics of scale cannot work like it can in China and the U.S.
What do you want to be? The leader in your country? The European leader? That’s the challenge we have — a lot of small parts of markets, and no big sized one. There will remain a big challenge for Europe that we are planning to tackle through the scale-up Europe initiative with the French presidency of the European Union.
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