BNP Paribas recognised as no. 1 European bank on the management of climate-related risks and opportunities in ShareAction’s 2020 ranking
On the 26th of April, the British NGO ShareAction released the results of its 2020 “Banking on...
In 2017, BNP Paribas RISK invited its employees to take part in an extraordinary experience: 5,500 employees had the chance to submit their application to the Innovation Booster program, an internal incubator open to all employees of the function. The goal is to drive reflection on innovative concepts, facilitate the process for generating new ideas, and execute the most promising ones. Frank Roncey, Chief Risk Officer, and Julien Cuminet, RISK COO, spearheaded the initiative. Frank met with us to look back on the highly promising first session.
I am Chief Risk Officer for the BNP Paribas Group. This is an integrated and independent function that plays a role in oversight and control. Composed of 5,500 employees working worldwide, RISK is tasked with advising top management concerning the bank’s risk profile and takes an active part in the decision-making processes connected to risk. It does so for all types of risk—credit risk, counterparty risk, market risk, liquidity risk, operational risk or insurance risk. We act as the second set of eyes to ensure decisions are taken in accordance with the Group’s strategy. We also have the responsibility of informing management in case of potential or observed problems.
More so than any other institution, banks must maintain a strong risk culture. History has shown us that this is an essential condition for keeping a banking institution in good health.
Today, it’s also a competitive advantage that we need to preserve at BNP Paribas. In a world changing rapidly in terms of technology, economy, regulations and geopolitics, risk management is a condition of a company’s survival. If the world moves ahead, we have to move ahead with it. In particular, we have to integrate new analysis or working methods connected to emerging technologies—artificial intelligence (machine learning), robotics, etc. At RISK, our function requires us to constantly anticipate, monitor and react. In other words, innovation is part of the essence of Risk Management.
In a world changing rapidly, risk management is a condition of a company’s survival. If the world moves ahead, we have to move ahead with it.
The incubator is the starting point of our function’s innovation strategy. Hence its name—the Innovation Booster. It’s a kickstart that gives the little extra oomph to get things rolling.
Launched in March 2017, the incubator takes a bottom-up approach to innovation on an international scale. In fact, to take part in RISK’s transformation and work on innovative projects, employees submitted applications, with the only requirement that they take their own original approach: motivation, a taste for innovation, collaborative work and team challenges. The program was open to all employees of the function, no matter where in the world they are based. We carried out the program in three steps: generating ideas, incubation, prototyping.
The program’s launch elicited a lot of enthusiasm: we received more than 170 applications!
Because we had to make a selection, while taking care not to lose the suggested ideas, from 170 applicants we selected 70 people from around the world, based on two main criteria—the motivation and quality of their ideas. Then, in April, they spent three days at a separate location, on special assignment, far from our offices, to generate new ideas.
Among those ideas, five were selected for the incubation step: available employees volunteered to continue the adventure for four two-day sessions in May on the premises of WAI (We Are Innovation) in Paris.
A support process then helped applicants to rework their ideas, confront them with business realities, and allow them to mature. Finally, three projects were presented to RISK’s top management and earned approval to enter the prototyping phase. Our intrapreneurs received two months to continue working on their projects. At the end of this phase, the first prototypes and business models (economic models) were once again presented to management for a decision on their production.
All three projects are developing their solutions, with production set to start within the bank in 2018.
Innovation Booster is just a first step in our internal innovation policy. To ensure this first initiative continues into the future, we set up an environment propitious to innovation on a daily basis. RIO (RISK Innovation Office) was created last July with a team of three full-time employees dedicated to this topic within the function. The team works on forecasting, manages the innovation portfolio, coordinates initiatives and liaises with internal and external innovation players. It should be noted here that we avoid working in silos, and also integrate external startups and partners from fintechs, regtechs and risktechs into our processes. We also work closely with the Group’s various businesses and their innovation correspondents.
everyone can be creative, innovation is still hard work—and you need the drive and energy to get projects off the ground while turning constraints into opportunities.
Moreover, we developed an intra-RISK community, a network of innovation champions, who act as innovation ambassadors and are identified from within the ranks of the Function’s various teams around the world. Their goal is to produce tangible and concrete innovations and enable everyone interested to serve as agents of change and contribute to the transformation of RISK.
First and foremost, this all starts with the motivation of our employees—because although everyone can be creative, innovation is still hard work—and you need the drive and energy to get projects off the ground while turning constraints into opportunities. You need resilience to learn from your mistakes and do better next time.
It is still too early to draw definitive conclusions from these efforts, and we are still at the foot of our learning curve. But, already, we can see that the program has conveyed its most important message—we are open to every idea and ready to support people with strong projects. And I do mean every idea, because in addition to Innovation Booster (170 applications, five projects incubated, three projects in prototyping-industrialization), we also have a portfolio of innovations that covers over 100 innovative initiatives that we are following as of today. When I meet with our teams, regardless of their nationality, I see just how fully they have adopted this new direction and this new spirit of innovation.
Furthermore, we have to remember that today’s intrapreneurs will become tomorrow’s ambassadors. When they return to their functions at RISK, they will have acquired new methods and will bring a dynamic of innovation and intrapreneurship to their teams. In this respect, it is essential for every level of RISK’s management to integrate this need, support intrapreneurial initiatives and capitalize on new knowledge gained. It’s a necessary condition for starting a virtuous cycle of innovation all across the globe.
I think the major challenge for the bank in general, and for the RISK function in particular, is to attract and retain talent. Generation Y and Millennials have a stronger need for meaning than any other generation.
To meet these expectations, it is crucial for us to transform our methods, to navigate the shift to new technologies, as well as to engage collectively through a social and environmental pact (CSR).
BNP Paribas is fully aligned with this philosophy. As for our Function, it is no coincidence that our 2020 plan (RISK 2020) features innovation as a priority challenge. Experiences like Innovation Booster help to change our work methodologies, remodel the culture of our teams and respond to the expectations of our employees. On all these topics, we aim to be a leader in the banking industry.
The major challenge for the bank is to attract and retain talent. To meet these expectations, it is crucial for us to transform our methods, to navigate the shift to new technologies
2017 was a jumping-off point. We were trying to start something new. On that level, we can say that it was a total success. The incubator went a long way toward launching RISK on one of the top innovation dynamics at the BNP Paribas Group. For a department with many immense and highly regulated responsibilities, we showed that it is still possible to be agile, in flux and innovative. We also received the Innovation Award given by BNP Paribas employees for a new risk reporting solution used in our market activities.
2018 is poised to be just as rich. First we will start production on the three products developed in the incubator. Our applicants’ ideas will become finished products! Other initiatives are also in preparation at RISK: a Group-wide Global Innovation Week, learning expeditions, as well as several hackathons.
The goal is to maintain the current dynamic while increasing connections and meetings.
My favorite topic right now is ‘weak signals’, which are signals that are hard to interpret on their own, have no obvious connection between them and, as their name indicates, show very low visibility. But at the same time, they can foretell much wider problems in a range of fields: operational risk, fraud, cybersecurity, processing flows. I am convinced that Artificial Intelligence technologies will eventually improve our techniques for detecting and using weak signals. To my mind, it’s a topic that has a lot to offer us and has a very bright future.
Obviously, the three selected projects all blew me away (cf. article1)! But among these three projects, two are intended primarily for internal use. The third may be applied on a much broader scale. It consists of developing an enhanced scoring tool that uses social data. The tool makes it possible to integrate elements from social media into the evaluation of a financial profile. Of course this will all be done in a way that respects privacy and has the sole aim of improving how we assess each case. Tools like this can help us to issue loans to profiles that would otherwise be excluded based on classic financial data alone. What impressed me is the participation rate we have seen. All around the world, we have seen a strong interest among surveyed targets.
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