SC Ventures aims to rewire DNA in banking

Traditional banking is under pressure to adapt as society continues to not only evolve digitally, but also increasingly accelerate emerging technology and innovation.

With digital transformation happening at a rapid pace, banks are undergoing significant changes to meet customers’ new needs and stay ahead of the innovation curve – especially with fintech moving into the traditional financial services sector. Often, out-of-the-box fintech solutions offered by nimble start-ups have proven their worth to investors and, ultimately, in the use of banks. The innovation remains external.

It’s not quite the same story for Standard Chartered Bank. With a business unit that invests time and money in innovation and start-up to build groundbreaking solutions while developing valuable partnerships with a wide range of technology service providers, Standard Chartered Bank has a significant and unique competitive advantage as a result of the SC Ventures platform.

SC Ventures is the bank’s response to the rapid acceleration of the fintech area, with Thorsten Neumann as the leading technology function – which is always in the market for new fintech and technology adoption. At the moment, the platform is fully invested in utilizing the bank’s capabilities, with a total portfolio of over 30 ventures at various stages working to fill the lucrative gaps in the market.

In addition to its $ 100 million internal intrapreneurship and growth fund activities, SC Ventures focuses on six key topics with high conviction, including Digital Banking & Lifestyle platforms, Online Economy & Payments, SMBs & Supply Chains, Digital Assets & Tokenization, Capability -som -a-service, and sustainability and financial inclusion.

“We are thinking of new value propositions. For example, by leveraging our strengths, we can brainstorm on the agricultural sector by meeting the needs of farmers in terms of seed financing, supply chain, product launch and logistics solutions to expand the ecosystem in the thematic area of ​​sustainability, and then build out a robust and scalable Cloud-native platform for stakeholders, ”explains Neumann.

“We believe we can have a much greater impact on delivering disruptive business models in emerging markets due to the internal domain expertise, the bank’s large footprint and deep local market knowledge through our link with the bank.”

Neumann joined SC Ventures a few months before the start of the pandemic to lead the role of his CTO and has witnessed one of the toughest periods for companies. Based in Singapore, he previously founded start-ups in the financial and payment sectors, and worked for many years in emerging markets in Africa and SE-Asia. He has a passion for technology and his task is to improve the competitive advantage of SC Ventures by accelerating innovation.

Remain competitive and encouraging fintech growth

By keeping up to date with the latest economic trends, Neumann and his team are able to bring evidence of concepts to life. While the bank’s branches are leaders in this field, the digital transformation of new business models is promoted by SC Ventures, which seems to be taking the lead in fintech development.

“We aim to be recognized as an industry leader. We want to be seen as a team that is reliable, that has delivered successfully on a number of initiatives, and built strong partnerships to unlock value in our co-creations,” says Neumann.

This technological excellence is something SC Ventures utilizes when investing resources in new digital initiatives.

Becomes more digital

During the COVID pandemic, SC Ventures was quick to act on the key transformation effort that helped the bank continue to serve its customers while they were socially distant. A highlight of the lockdown was the roll-out of an electronic signature platform, which enabled the global bank and its customers to digitally sign documents securely.

Neumann talks about the visible progress made at SC Ventures in launching new digital banks as part of its portfolio, but without compromising Standard Chartered Bank’s traditional model. When discussing the two digital banks – one of which is Mox Bank based in Hong Kong, and the new Trust Bank in Singapore – he explains that the “digibank” is the result of differentiating itself in a underserved segment and tailoring to the needs of the mass trading sector. . .

“‘Why would you do this?’ may be the first question that arises. The purpose here is not to replace the traditional banks or cannibalize existing market shares, but actually to provide a platform for an alternative banking experience – one that is a more lifestyle- and consumer-oriented type of customer experience, Neumann explains. in detail about the new banking initiatives.

“It would not be so much as competing with the existing banking business as much as it would be creating a much more new, focused customer experience. The adoption of modern technology such as core banking from Thought Machine, automation of GitHub Actions and cloud-based distribution on AWS provides give them a flexibility advantage. “

Both Standard Chartered and SC Ventures’ innovation arm is focused on fintech’s disruptive nature to scale the business to a larger footprint worldwide. New areas of disruptive technology to be considered include cybersecurity and similar “passwordless” access solutions.

SC Ventures has also made investments in blockchain and distributed financial technology companies. We have invested in KYC and fraud detection, automation solutions and a portfolio of thematically-adjusted start-ups in the growth stage. Important for us is that they gain momentum, while minimizing rework and avoiding technology debt, he says.

From leveraging technology and gaining a foothold in these investments, SC Ventures is able to partner with some highly acclaimed players in the industry.

“We talk to large technology companies, we participate in conversations with venture capital firms, and we learn a lot about what is happening in the market, to say where the market is going. This is new for SC Ventures by being a corporate venture capital (CVC) funds that invest in external start-up companies, and at the same time establish our own ventures, says Neumann.

“The advantage for us is not only to learn and observe market trends, but also that because we participate in these investment rounds, we also have skin in the game in their return on investment.”

Partners drive the future of fintech innovation

Another important insight from Neumann is that SC Ventures consciously seeks to collaborate with a number of partners to diversify their delivery capabilities – from geographical coverage, to gaining access to the best talent and neurodiversity. Since CVC prefers to reduce the risk of direct employment in the early stages of venture building, it is preferred that the engineering work is facilitated by SC Venture’s partner ecosystem and thus provide the platform with options.

SC Ventures has worked with reputable names as part of its broader partner ecosystem, including companies cited by Neumann, such as Zühlke, Hi Mum! Said Dad, NESS Digital Engineering and FPT Software. These partners do not compete for the job, but rather find that they collaborate with SC Ventures, and even each other, on provocative, innovative ideas.

“Zühlke is a very special type of innovation partner – in that we really look to them for high quality and high caliber expertise to bring sustainable innovation to market success. We work together to design, build and launch next generation solutions such as digital banking with Mox in Hong Kong and the new Trust Bank in Singapore. Working with partners like Zühlke has enabled us to deliver effective value quickly and operate on a large scale. ” says Neumann.

In his reference to Ventures, Neumann shares their differentiating strengths and abilities. He points out that SC Ventures’ portfolio companies range from the technically intricate crypto storage solution Zodia Custody, a high-performance supply chain platform, TASConnect, to retail as a mobile-first Shoal.

“Shoal, our commitment to retail customers investing exclusively in green and sustainable projects, had considerable complexity. We engaged Hello Mom! Dad said about strategy, design and delivery of a superior platform. They partnered with us to take a rough idea of ​​a PowerPoint slide to a successful market launch.From digital banking to this retail platform, they always prioritize the customer experience, says Neumann.

He adds that SC Ventures is looking at our construction partners to help not only access the best talent, but also take their input into solutions for these new technology-enabled business models. For example, the robustness of TASConnect in financing USD 7 billion in supplier invoices during the first 12 months.

“It enables us to operationalize faster and deliver a more effective minimum viable product, MVP – as our first milestone. As a result, what I have found is that we have moved away from a traditional supplier engagement model and prioritize partnerships. This makes that we can work with individuals placed by our partners who have the right attitude and show commitment. As Forrester Research describes it, we have gone from product to results-oriented commitment. “

Bold to take on new opportunities

The company’s CVC covers several activities across investment funds, internal venture building, fintech engagement and intrapreneurship, and distinguishes it from industry colleagues. Neumann feels that it is the sum of the parts that gives SC Ventures a unique strategic advantage.

“It is unlikely to perform just one of these activities independently, to achieve our expected results. Would we come across good venture ideas without the insight of our intrapreneurs? Would we identify superior investment opportunities if our efforts did not seek out new technology partners? We believe that through synergies across our activities, we have a greater chance of success, Neumann explains.

Gaining the lead in the industry allows CVC to look deeper into tokenization and push more interest in cryptocurrencies, which in their unregulated states are currently receiving great interest.

“We see much more innovation in the tokenization area. Going far beyond cryptocurrencies, but really into institutional custody, tokenized assets and security token assets. This can also be the transfer of traditional fund products and anchored settlement processes to distributed ledgers, where we become more involved in new blockchain projects – be it non-fungible tokens, fiat-supported stable coins or return generation in DeFi, explains Neumann.

“However, what we value first and foremost is that these ideas must be rooted in plausible business models. They can not be vague or just dreams; our efforts must show that they can create value – by valuation, revenue or both,” he explains.

Finally, Neumann mentions that the next year for SC Ventures is primarily about scaling the portfolio of ventures. Unlike many other CVCs that look after the needs of their parent companies, SC Ventures prioritizes making money from innovation development in their individually developed fintech subsidiaries.