12 August 2019
Bank accelerators typically tap the startup world for their next ideas, but not Standard Chartered. Fiona McFarlane sits down with man in charge Dominic Maffei, SC Ventures Lead for Financial Markets and UK/EU, at the bank’s London offices to hear how this specially created business unit manages to successfully strongest innovation from its very own staff.
I run Standard Chartered’s UK/EU eXellerator and, in addition, I cover our financial markets fintech activities. It’s the culmination of almost 10 years with the firm, in financial markets and then the COO’s office, not to mention a fair bit around the world. I joined the bank in Hong Kong right after the financial crisis, when the bank was growing somewhat counter-cyclically to our peers. Then I moved to Singapore, and now London.
The overarching mantra for SC Ventures is to rewire the DNA in banking. The team was formed in early 2018, but looking at innovation and working with clients is not something new for us – we’ve been doing that in pockets for years. In order to do that more efficiently and exponentially though, we needed to bring it together.
Supporting that vision are three underlying pillars. The first is all about client co-creation and fostering internal innovation through intrapreneurship. We have our Intrapreneurship Programme at Standard Chartered, in which we invite ideas from the bank’s entire staff. We employ around 85,000 people across some 60 markets. Why wouldn’t we see it as a vast pool of subject-matter experts? If you have this huge body of talent that you can utilise, why have seven people in a room trying to come up with a solution in an isolated way, when you can open it up to your network?
To date, we have 20,000 employees on our ideation platform, with around 1,800 ideas submitted, 11 regional/business challenges, 49 Pitch Days and 25 boot camps. Some of these ideas are already being introduced as new product offerings or being launched as business ventures. Also within this first vertical is client co-creation, where we work with clients to develop new solutions or even new business models. This has been a focus for some time and we have done it well with a few select clients, now the trick is to broaden that to a larger segment of our client base.
“To date, we have 20,000 employees on our ideation platform, with around 1,800 ideas submitted”
You know, we’re not trying to pull innovation away from business, and we’re not saying that the business doesn’t need to worry about any of this stuff because someone else is doing it. The way I see it is this: what we’re doing is facilitating and enabling the business to push forward innovative areas that help the business model and help our clients.
The second vertical is the fintech engagement piece. Obviously, people at the bank have been talking to fintechs for years, even back when they were just called technology companies! However, this was also pretty fragmented, so we wanted a better understanding of who is in the various spaces that we’re interested in being in and who we could potentially partner with. Such collaboration with fintechs can range from arm’s-length vendor relationships, or it could be an investment, which we would make through our fund. In order to institutionalise this engagement across the group, we recently launched an SC Ventures Fintech Bridge platform where fintechs can register and be matched with problem statements that the bank is looking to solve.
The third vertical is one of the most exciting in my view – our venture vertical. This is about launching new, innovative disruptive business models outside the bank. We have a number at an early stage, with a good handful that are more advanced. One that is public is our virtual bank in Hong Kong, which is being built completely separately, with a different tech stack, different brand proposition and a completely different model.
We’ve had an eXellerator lab in Singapore for a few years, and last year we launched the Hong Kong eXellerator, with the UK following later in the year. Most recently, we launched a lab in Kenya, to cover the African market, which is a key region for our bank. Due to our scope and scale in Asia, I think we know pretty much everyone in the fintech community or, at least, know of them. We have also had a scouting effort in the US for going on a decade, so we have good insights there, but here in the UK we have work to do to better understand the ecosystem and raise our profile, so that fintechs understand our value proposition as a partner and we understand the relevant companies for that partnership. I think it’s important to realise that, for us, this is still business-driven innovation and, again, because it goes back to our clients, it is still going to be driven by business.
London remains the fintech capital of Europe for us and we knew we needed to step up our engagement there. Over the past six months, we have put good foundations in place and have a much more developed sense of the UK ecosystem, but now we need to start thinking more about the other EU fintech hubs. That said, I would say we are still in the ramp-up stage, as there is a lot to do, explore and expand. Day-to-day is very much meeting with fintech companies, talking to clients, nurturing those intrapreneurs.
“London remains the fintech capital of Europe and we knew we needed to step up our engagement there”
In terms of opportunities, we are looking for the companies that will be the future best-in-class for their respective areas – the best of the new, or something to that effect. As for the areas, that includes everything from pre- and post-trade infrastructure to data analytics, alternative data and regtech, all the way to automation and practical applications of DLT. The whole capital market space is really interesting right now, as we are seeing a real move from a view of disruption to partnership, especially in the bond space, as it is going through big changes. The advantage of working with a bank like Standard Chartered is how we are able to help fintechs scale up – we have a presence in more than 60 of the most dynamic and fastest-growing economies around the world. We have the ability to test proof of concepts and once successful, roll out very rapidly across our footprint.