23 July 2019
Until recently, fintechs were perceived as one of the biggest threats to banking. Now they are forging a shared future with incumbent banks to build the future of the financial system. In fact, the best ideas are believed to come from combining the respective strengths of banks and fintechs, with clients emerging as the ultimate winners.
That’s the thinking behind SC Ventures, Standard Chartered’s innovation, ventures and fintech investments unit that was launched in March last year. Rather than competing with fintech firms, it’s partnering them to radically ‘rewire’ banking by re-inventing business models and using data and technology as enablers to deliver better customer experiences. As SC Ventures expands and spins off new business models, it wants to hire people – from technologists to fintech entrepreneurs – who will drive the growth of new ventures that will transform banking as we know it.
SC Ventures takes a holistic approach to innovation which captures the best ideas internally from the Bank and externally from the fintech ecosystem.
Firstly, SC Ventures encourages internal innovation. Its SC Innovate global platform allows employees to submit original ideas that could potentially go into production. To date it has 20,000 registered users, who have submitted more than 1,700 ideas, with some advancing to become real products of the bank. Intrapreneurs are supported from idea pitching to refining to funding so proof of concepts can be developed and rolled out. It operates eXellerator labs in Singapore, Hong Kong, London, Kenya and San Francisco. These are focal points that “facilitate innovation and culture change” across Standard Chartered and act as a bridge between staff and the fintech ecosystem in each region so we can co-create solutions which address client needs, says Singapore-based Alex Manson, Head of SC Ventures.
Secondly, it incubates new disruptive technology ventures that are wholly or partially owned by Standard Chartered. The bank provides a stable platform to test, incubate, launch, grow and spin off these businesses. “We help them scale up more quickly than if they weren’t backed by a large corporate like us. That’s a huge advantage over being a pure startup,” says Manson.
The first of these ventures is the new virtual bank that Standard Chartered is launching in Hong Kong later this year, run by a team independent of its traditional retail bank. Two other ventures are at seed-funding stage, including one to build a new platform to service SMEs, while seven ideas are currently being incubated.
Thirdly, SC Ventures runs an Innovation Investment Fund, which makes minority investments in fintech firms that have at least done a proof of concept with the Bank. For example, it has previously invested in Ripple, a distributed ledger firm, to co-develop applications for global trade and payments. “We aim to invest in the most promising businesses, whose technology is most relevant to transforming Standard Chartered and giving us a competitive advantage,” says Manson.
“Having innovation programmes, investments and ventures all under one roof is a rare combination which is organic and symbiotic and shows we’re committed to transformation and aren’t just paying lip service to it,” says Manson. All three parts of SC Ventures share the common thread of “rewiring the DNA in banking”, he says. “We’re making banking more relevant for future generations by changing our legacy technology, but also by changing the legacy ways we do business at a human level,” he adds. “We’re working within a big traditional bank and not afraid of disrupting ourselves. Instead of seeing fintechs as threats, we’re partnering with them to tap their technological and human-centred design expertise, and to learn from their agile ways of working.”
This “transformative strategy” has already helped SC Ventures hire quality candidates, says Manson, adding that his core team must remain lean (it boasts fewer than 50 people), while the bulk of the recruiting effort is for the ventures themselves. The multinational team includes technologists (e.g. CTOs, engineers, and DevOps professionals), former fintech founders, UX/UI designers, innovation coaches, project managers, and yes… bankers. “We’re remarkably diverse,” says Manson. “When you’re developing new business models to transform the bank, you really don’t want everyone to be the same.”
Manson says he will be taking on more staff this year, predominately in the ventures, mostly in Singapore (where most of the core team are based) but also in the ventures’ markets across Asia, Africa and the Middle East. But while the recruitment will be global, it won’t be overly aggressive. “It’s more about finding exceptional people,” he adds. “SC Ventures works with startups and is essentially a startup itself as we’ve only been operational for just over a year, so you need an entrepreneurial mindset to work here. Having an entrepreneurial job with the power of a big bank behind you is an attractive combination, but it is also not for everyone.”
SC Ventures’ flat hierarchy also makes it an appealing place to work. In true startup-style, the team is organised around tasks (including investments, venture incubation, innovation coaching, design, and project management) rather than strict job descriptions. “We’ve avoided the rigid organisational charts that are typically found in banking,” says Manson. “Our reporting lines are fairly fluid, so we can encourage all employees to think creatively and deliver impactful change. Ultimately, innovation is about people rather than technology,” he adds.
Manson says there’s already a startup mentality within the SC Ventures team. “For example, it’s ok to make mistakes here, if you own them and learn from them. People join us to broaden their job scope, build connections with fintechs, and interact with clients in a different way,” he adds.
Want to take up the challenge of building a brand new business that could revolutionise banking? SC Ventures is hiring for the ventures it’s incubating. While these are run independently, SC Ventures typically has a say in senior hires, such as heads of technology, product, and partnerships. “The ventures are attracting very good people who want to work for businesses backed by Standard Chartered’s large resources and customer base,” says Manson. “There’s also a two-way flow of talent. Sometimes we hire great people from them and sometimes our employees move to a venture. It’s something I encourage and it’s brilliant from a career progression perspective.”
Manson says his own career in transaction banking at Standard Chartered originally inspired him to set up SC Ventures. In that role, he had gained first-hand exposure to the trends that were shaking up financial services – from emerging technologies to new regulations and changing client demands. “I realised just how much banking needs to transform itself to keep up with these trends,” says Manson.
But overhauling a firm as large and international as Standard Chartered, in a sector as established and complicated as banking, was obviously not going to be straightforward. That’s what made Manson pitch his SC Ventures idea to Standard Chartered in 2017. Instead of trying to overhaul existing departments one by one, Manson wanted to create a new team and build partnerships across the bank and across the industry. “I was convinced that a truly effective and disruptive transformation could only work if we had a flow of external ideas as well as internal ones,” he says.
Manson’s career has taken unexpected turns since he took the SC Ventures job last year. “It’s been about unlearning and relearning for me. I’d become senior as a banker based on having clear management goals: we’re going from A to B in this particular way,” he says. “My job now is different because we don’t always know what B (the destination) is from the outset of each project. I’m not telling people what to do, but creating an environment where they can work things out and experiment with different solutions. Being part of Standard Chartered’s transformation journey means I’ve had to develop a startup mindset myself. I am learning every day which I enjoy a lot, and rewiring the DNA in Banking is a cause definitely worth dedicating myself to.”