Articles

Fintechs and Banks: An Unequal Partnership

Years ago I consulted with the legacy Wachovia Bank, headquartered in Winston Salem. Back then the bank-teamed credit and line bankers on each commercial loan, terming their working relationship an “equal partnership.” In fact, when you spoke with management offline, many admitted that the credit people were a bit more equal than line personnel.

Articles

Articles

Banks and their partners need to face up a set of realities to manage successfully
Sometimes it is valuable to rethink basic assumptions and hopes to consider the reality of working within a bank or credit union. Example: Small Business. The small business segment offers exceptional economic value to banks. We work with one small business-focused bank whose customers provide deposits that exceed loans by 5X. That allows the bank...
Frictionless Finance with FinTech
Larry Summers, former director of the National Economic Council for President Barack Obama, writes a regular column in The Financial Times. His latest piece is his take on FinTech, which has the main headline that FinTech is taking away frictions in finance. Yep. The frictions are illustrated by things like interchange fees, the length of time it...
How to Predict If a Borrower Will Pay You Back
Recently, three economists—Oded Netzer and Alain Lemaire, both of Columbia, and Michal Herzenstein of the University of Delaware—looked for ways to predict the likelihood of whether a borrower would pay back a loan. The scholars used data from Prosper, a peer-to-peer lending site. Potential borrowers write a brief description of why they need a...
External financing - should SMEs take the leap?
The UK’s rapidly expanding small business sector is something of a sleeping giant, with young companies in need of better access to finance to kick-start their growth. Early-stage start-ups are reasonably well catered for in the funding stakes, but as they reach the development capital stage – with a viable, revenue- generating concept and a clear...
Small business, big attraction: Can small business banking be personal?
Small businesses have long mystified banks. They make up an overwhelming 99 percent of all businesses—yes, 99 percent—and employ close to half of all workers. They generate more than 60 percent of the private sector’s net new jobs. Yet despite the critical role small businesses play in the economy, most banks struggle to generate strong returns...
The Deserving Under-Served – Shifting the Focus for Banks
The world of banking has remained unchanged for decades; when all about them were innovating and disrupting their sectors various, the bank did nothing, managing to continue its unilateral conversation to its one customer. The middle-aged man. The banking sector has done itself no favors by eliminating the woman from their branding strategy; this...
Business Banking Sucks – but a few FinTechs and Big Banks are trying to change this
As a business owner, I rarely log into my business bank account. They make it too hard for me to log in, and when I do, the level of capability doesn’t reflect the jobs I have to do on a day-to day-basis. We are hugely busy building our company, 11:FS , and I can’t be bothered with something that doesn’t give me basic insight and isn’t at all...
Fintechs and Banks: An Unequal Partnership
Years ago I consulted with the legacy Wachovia Bank, headquartered in Winston Salem. Back then the bank-teamed credit and line bankers on each commercial loan, terming their working relationship an “equal partnership.” In fact, when you spoke with management offline, many admitted that the credit people were a bit more equal than line personnel...
How Banks Can Compete Against an Army of Fintech Startups
It’s been more than 25 years since Bill Gates dismissed retail banks as “dinosaurs,” but the statement may be as true today as it was then. Banking for small and medium-sized enterprises (SMEs) has been astonishingly unaffected by the rise of the Internet. To the extent that banks have digitized, they have focused on the most routine customer...
SMEs Access to Capital Markets in India
It took almost a decade since the SME Exchange has been formalised to see 60 floats in a month. Still the total number of listings on the SME bourses is not something that the growing Indian economy can be proud of. In India, most SMEs operate in debt markets. Cost of raising debt for SMEs is increasingly becoming problematic both from the points...