Société Générale overhauls global IT

SocGen's chairman admitted back office systems were faulty

Société Générale is setting up new global functions for its technology and back office as part of a major business overhaul.

The bank’s Société Générale Securities Services (SGSS) division and the new IT units will work together to improve processing and optimise processes and will involve heads of business divisions to speed up development.

The new organisation is intended to expand the bank’s service portfolio and streamline systems across the different countries in which it operates. The IT plan is part of a wider overhaul, which is said to be a response to expansion via organic growth, acquisitions and new mandates.

Last month, the head of Société Générale (SocGen) faced pressure to resign after admitting in an interview that there were faults in the bank's internal control systems after rogue trader Jerome Kerviel lost €4.9bn in bad trades.

"The controls were carried out in accordance with the rules for each area concerned. But a horizontal method for assessing the risk of fraud, [and] a pooling of the information, was missing,” chairman Daniel Bouton told French web site Mediapart.

"It was the lack of this method that allowed Kerviel to play on the different deficiencies, which his experience in the back office had enabled him to see," he said.

Before joining SocGen’s trading team, Kerviel worked in the bank’s back office, where he allegedly had access to processes linked to security checks and transaction processing.