Bankers: The Power Duo Driving Bank Venture Units Forward

Some banks like the idea of external venture capitalists leading their venture businesses, but banker-led units are more likely to cement their inherent advantage. When Thailand’s KBank invested in southeast Asia’s top ride-hailing platform, Grab, it disclosed that one of the primary aims was to harness data on the financial profiles of taxi drivers and users to customize services.
This collaboration has led to a co-branded credit card for Grab users – a good example of the potential that venture capital (VC) and bank collaboration can hold. Many smart banks have set up venture units to act as a radar for tech trends and as bridges to fintech prowess. But who should run these units? A venture capitalist parachuting into a bank may bring a wealth of investment experience, but they often lack a detailed operational understanding of the bank and its legacy systems.
A banker may not have the deal-sourcing acumen associated with a venture fund. “The venture arm will typically, at HSBC’s case, only invest where there is a business synergy,” explains Vivek Ramachandran, HSBC’s head of global trade and receivables finance. “I will not invest in a fintech solution or one of our ventures unless there is a business unit also involved,” agrees Alex Manson, who heads SC Ventures at Standard Chartered, having formerly led global transaction banking at the firm.