Interview with Matteo Baido

D:Do you think the current Covid-19-related health emergency has forced financial institutions to implement changes, or has it only accelerated a process that was already underway?

Even before the pandemic, the banking system was well aware of the importance of change to seize innovation opportunities, but certainly this health emergency has led banks to speed up the execution of projects with the goal of better serving their internal and external customers.

During this period we have seen the emergence of many collaborations between banks and FinTech for the purpose of introducing innovative technologies and services. I am thinking, for example, of artificial intelligence engines used to process and extract value from large volumes of business data; these are systems that lend themselves to be used in a variety of contexts including: determining a customer's creditworthiness, identifying suspicious transactions but also obtaining relevant information to set up business actions.

There is also increasing adoption of the Open Banking paradigm, a model in which banks do not just create innovation internally but dialogue and collaborate with startups, research organizations, accelerators and technology providers to be more agile in change. This is demonstrated by the creation within banks of specific organizational structures tasked with managing relationships with players in the innovation supply chain while facilitating the implementation of digital transformation programs.

D:Instead, what do you think are the drivers that are driving banks to change following the advent of Covid-19?

In a very early phase of the emergency, banks focused on ensuring the business continuity of their branches and central facilities. This phase was then followed by another in which innovation played a central role in remoting relationships with colleagues and customers, as required by the health emergency.

Technologies for collaboration and communication among employees were adopted early on, the use of digital self channels that until before the emergency were used only by the smartest customers was pushed, and video communication technologies to manage remote relationships between bank employees and customers took on great importance.

D:With respect to the digitization interventions and long-term actions taken during this period, do you think people will be more receptive to digitization or perhaps want to go back?

This period has brought a wide range of users to appreciate the benefits of the new digital models and services offered, which I am sure will be maintained once the emergency has passed.

Smart working has been adopted by all employees in our bank's head offices, with encouraging results on resource productivity, and customers are also appreciating the new service models based on digital technologies that enable them to interact with the bank in a flexible and convenient way.

We have also initiated dedicated studies and analyses of technologies that can innovate the way we work and relate with customers because we believe that further opportunities for improvement may arise, which we are intent on testing and evaluating.

D:So a strategic vision is emerging both toward customers and internally. Are there aspects where you think direct collaboration between banks can bring more benefits than the individual initiative, which, however effective, remains contextualized?

Interbank collaborative processes are certainly different than those managed within a single institution, which follow the classic stages of analysis, proposal and project implementation.

However, there are areas where change and innovation can be jointly developed between banks in non-competitive settings, bringing substantial benefits. I am thinking, for example, of interbank processes involving multiple institutions, which can be worked on jointly to achieve systemic improvements.

D: Within this vision, how do you think a committee such as Steering Committee of the FinTech Lighthouse HUB, in a university setting, can bring added value to its member institutions?

University research centers have the advantage of being able to study and bring out interesting dynamics to understand innovation trends. I also see them as important for facilitating contact and discussion among industry professionals and can be used to create research and working groups on common issues that all banks are facing, such asAML or digital identity.

Interbank collaboration on certain initiatives also makes it possible to be able to achieve economies of scale, which makes it advantageous to test and implement technology solutions that can be used by multiple banks.