It’s not surprising that Nicole Olson of State Street has a sense of exploration. It’s central to her work as vice president of digital product development and innovation at the bank, where she leads efforts to solve problems using blockchain and other distributed ledger technologies (DLT).
“I work closely with clients to understand their particular growth strategies or problem statements, and we then apply a technology lens to understand if DLT and blockchain can be applied as a solution,” Olson tells Bank Automation News. “The model doesn’t work the other way around; we don’t start with the technology and then search for a problem to solve.”
The $41.7 billion State Street has emerged as a leader in applying distributed ledger solutions to banking. In December 2021, the bank partnered with investment advisor Vanguard to deploy blockchain to automate foreign exchange forward contract.
Olson recently sat down with Bank Automation News to share more about her exploration of DLT in automation. What follows is an edited version of that conversation.
Bank Automation News: What does your role entail when it comes to technology and automation?
Nicole Olson: At State Street Digital we are looking for ways to empower our clients to leverage DLT and blockchain technologies. State Street has significant client reach, so as trends or commonalities start to emerge in these conversations, we use these to focus our priorities as a team.
Efficiency-driven strategies have emerged as a major focus area, and automation via DLT and smart contracts is a part of that. These projects are important because they bring real value to clients and begin to lay the groundwork for a DLT ecosystem in the future.
BAN: In what new areas could blockchain transform or automate banking processes?
Olson: We are looking at ways to help our clients reduce risk. We recognize that collateralization presents a strong use case for DLT technology. Shared data and automated processes can compress the timeline from mark-to-market to variation margin fulfillment. The result is a reduction in counterparty risk and jump risk for an open position.
BAN: What specific product or feature is State Street prioritizing this year?
Olson: Fund tokenization is a major focus this year. We anticipate regulatory clarity in a few key global jurisdictions in the near term, and this will of course be a major driver for client adoption.
BAN: Is there an emerging technology that you are exploring integrating into your systems?
Olson: Our team is future-focused, and one of the major developments that we are looking at is DeFi [decentralized finance]. For highly regulated entities like State Street and our clients’ organizations, DeFi is an exciting direction of travel, but it’s a concept that must be considered carefully.
BAN: What would your team be surprised to learn about you?
Olson: Exploration is key to who I am. I am most fulfilled by new learnings and ideas. On a literal level, I have prioritized travel in my life, and I’ve been to more than 60 countries. I hope to foster this curiosity in our son too, who, at 6 years old, will visit his 10th country this summer.
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