The 5 things any corporation (especially banks) should keep in mind if they want to deal with startups

Advising banks on how to deal with startups is one of my favourite domain of expertise, here are few tips : these are free, consider them as a the introductory page of a manual 😉

– the first thing that a startup will teach you is that you (bank) are not a startup. Everything will be challenged, so talk to them with an open mind.
This is not a vague vanilla concept.
As an example, if you treat the startup as “another provider” from day one, you will not only fail miserably, but you will create an internal frustration for your guys trying to get some fresh air into your company.

– if you want to take from a startup something more than a good hour of (cheap or free) entertainment, set something up where these guys can try things and evolve. And I mean tech infrastructure, procedures. working space and agile prototyping to start with.

don’t judge. And be brave enough to bring that young geek to your CEO. You would be surprised how refreshing for him that talk will be. (This is part of a very complex topic about  how to create an executive “push” for the startup, obviously)

fighting your own internal legacy is going to be your biggest challenge. And not only IT legacy, basically having your security, audit and compliance department screaming all over, but of equal importance the cultural legacy. Usually, ring fence a vertical market (by geography or a business segment) is not a bad idea, before you scale.

– if you (bank) have a fund, and likely to become a customer at the same time, think more of the opportunity to be the first mover and shaper of that innovation than be fearful of the potential threat of your competitors having the same solution.
The implication of a bank-funded fund is a complex matter, will talk about it in a separate post.

Behind each one of these points there is a story, an experience, a set of data building up on the brief thesis.
Seven years ago, when I started to deal with innovation in Fintech, almost no one in the space had a structure to deal with startups (Innovation was a little more than a buzzword everywhere).
Now I believe that the consciousness of look for external teams to help both the traditional banking business and the new value creation is far more aware.

Stay tuned


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