Fintech

Philippe Ruault on big data, AI, and working with fintech startups

Philippe Ruault on big data, AI, and working with fintech startups. Image: Brian King CC0
Written by Devie Mohan

Philippe Ruault talks to Devie Mohan about how BNP Paribas is reengineering its processes in order to work closely with 3D modeling firm Dassault Systèmes.

Philippe Ruault is head of Clearing Settlement and Custody Products at BNP Paribas Securities Services. He looks after clearing and direct custody products, global network management and global custody products, and is based in Paris.

In this interview from Sibos 2015, I talk to Philippe about big data, artificial intelligence, and working with fintech startups.

Please give us an overview of BNP Securities Services and your role within the bank.

Philippe Ruault, BNP Paribas, at Sibos 2015.BNP Paribas Securities Services is a wholly owned subsidiary of the BNP Paribas Group. For the buy-side accounts, we fund administration, distribution, and accounting, as well as do performance measurement, custody of the assets, and more sell-side businesses. We provide global custodies and financing services to banks, and cater to product development for custody services. We offer everything on asset servicing, settlement, custodies, and remitting. We’re headquartered in Paris, but our team operates through 26 locations. I head Clearing Settlement and Custody Products for BNP Paribas Securities Services.

What kind of initiatives do you have planned, if any, on the digital banking side and digitalization of securities?

The way we’ve organized ourselves is around a chief digital officer, who sits in Paris and leads a number of initiatives targeting the market. He’s looking into four primary streams: big data, blockchain, artificial intelligence and product life cycle management. We’re really ahead of the market with product life cycle management, where last year we announced the signing of a contract with Dassault Systèmes that does 3D modeling and product modeling. The company also works with the aerospace and automotive industry, which adds a unique aspect to their 3D modeling. We’re the first financial institution to be equipped with their module to design all our products. This project has been going on for a year. We’re now in the process of going live, training people and digitizing our product processes.

It must be a challenge setting up a completely new product process considering the complexity of interaction with so many market and product groups.

We have the necessary software to do it. In addition, Dassault has a lot of experience on what happens in the industry. Let’s say when you build a car, you have product designers looking at a catalogue of a component they’ve reused to build a new car, so they build a new car out of 70% of existing materials. They check compliance and all the processes needed to motorize a car. What we do in the financial industry is the same. We build solutions for clients based on existing components. We check if it’s fine in terms of credit, legal and compliance. We follow the best practices of the industry. That’s really the first step towards digitalization. One of the topics on which we are working now is blockchain. We’re looking at what fintechs can bring to us and how it can benefit our business. We’re keeping a watch, doing some proof of concept and exploring ideas that we could have on possible applications.

What kind of use cases do you see on blockchain?

There are many use cases ranging from working process to securities issuance. We’ve identified 14 potential use cases.

Do you think the settlements process is well suited for a blockchain application?

Settlement custodies are industrialized and have very low cost. We roll out huge volumes of the target to the securities platform. Also, the legacy part works, and that too at a low cost. We’re exploring areas where we are not disrupting the legacy because it works well and is regulated, so use cases could be more on interactive processes and new product lines for us, like funds. We’re also looking at new fintechs, discussing with them and checking what they can bring to us.

How do you see yourself working with fintech startups?

To me, it’s about cooperation and collaboration. We can bring in new ideas together. We’re regulated, so we can bring in a lot of knowledge on how to adapt to regulations, and it’s complementary to the corresponding banking model. It’s a new way of working. We’re also looking at big data. We are owners of a huge amount of data that we can deliver, maybe in a more fashionable and more intelligent manner, to our clients. It may be less of custody businesses and more of distribution performance.

You mentioned artificial intelligence as an area of focus. Where are you going with that?

It’s pretty much observation at this stage, but I think artificial intelligence is applicable to a lot of our processes. For instance, we have a number of teams working to collect information from many sources, such as newspapers or depositories, to create information and deliver it quickly to clients. We think artificial intelligence can help automatize it or structure it better, so we’re looking at this space closely.

Have you seen any fintech startups that have excited you?

Yes, we met with Digital Asset Holdings, who were quite interesting in terms of the ways they communicate. Hyperledger, who won the Innotribe contest, was interesting in that they’re looking at smart topics and aren’t heavily regulated.

It’s been very interesting because before coming into Sibos, I assumed fintech is going to be a replacement of the core system and legacy systems, but I think almost all the banks I’ve spoken to are trying to build the digital layer on top of their core systems.

We’ve invested in our core platform. If I need to rebuild the core system, I will definitely look at how these new technologies will help me. For instance, if I want to develop a new collateral system that I don’t have today, I will use new technology to develop it. We will have kind of a ‘digital validation’ and will take the good wave in terms of technology.

Do you have any other innovation initiatives planned within the firm?

Our CEO at Securities Services is quite innovative and has the right spirit for innovation. It’s part of our value, and creating the team under the chief digital officer team has helped the business lines look at new technologies and find new ideas. We have a number of processes on new technologies with fintech. We already have people working in an innovation model.

How do you meet these startups? Do you actively search for them?

They come to us, because the productivity most of them are seeking is with us. They also come to us for capital. At times, we exchange information with our peers and go meet them at other programs to see what’s available in the market. We come to Level39 in London quite a lot to meet up with startups.

How has your experience been with Sibos so far, and what have you enjoyed the most?

There have been a lot of back-to-back meetings. I like that there’s a great spirit of innovation, and I’m sure it’s been triggered by Swift on the type of conferences they organized. It’s a fresh air of innovation.

Partnership study: BNP Paribas and Dassault

Philippe Ruault spoke about how BNP Paribas is reengineering its processes in order to work closely with 3D modeling firm Dassault Systèmes, which specializes in product life cycle management and 3D digital modeling solutions. I was keen to talk to Dassault as well, and here’s what Guillaume Dufour, VP of Financial Services, had to say about the project.

“Dassault Systèmes works in spaces – like life sciences or consumer packaged goods – where there are very high complexities associated with managing consistency across brands and geographies when products differ slightly from country to country due to regulations. In the financial services industry, we work closely with asset management, securities services, and other areas that have historically underinvested in collaboration tools and process management. Where hundreds of people globally are thinking of launching, adapting and fine-tuning their services by country while keeping a global view, we help to improve enterprise-wide collaboration, increase process automation and reduce operational costs.

“Our platform – Innovation Factory – brings in technology to orchestrate this collaboration, and offers a single source of truth of what’s to be sold or retired. It sits upstream from transactional systems to enable faster collaboration between people, and offers agility on how to drive creation of customer-centric products. We empower the product population not just to become the owner of the product, but also the orchestrator of how the product will be talked about by the communication team. We bring in feeds during the ideation stage from internal and external sources such as news feeds, subscriptions, and so on. In the middle-stream, we replace usage of extensive emails and document management. Downstream, we push the truth of what’s to be sold to CRM systems, billing systems and transactional systems. It’s a challenge sometimes to deduce customer and product profitability, and we help securities firms with that challenge.”

About the author

Devie Mohan

Devie Mohan is a fintech industry adviser and analyst based in London. She is the co-founder and CEO of Burnmark, a fintech research company, and is a panel member on the ING group Think Forward initiative on better financial decision making. Devie is actively involved in the fintech community and has been listed in CityAM's Top 10 Fintech Powerlist, and in Innotribe's Fintech Power Women list.

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