By combining banking, technology and innovation, SC Ventures, Standard Chartered’s innovation, investment and ventures arm, is creating new business models that are solving treasury’s most pressing challenges.
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Set up four years ago, SC Ventures is Standard Chartered’s business unit that promotes innovation, invests in disruptive financial technology and explores alternative business models. It has already incubated over thirty ventures across a number of themes, with ten ventures up and running. One of the high conviction themes is SMEs and World Trade where SC Ventures is creating an ecosystem of ventures. One such venture is Olea, a Singapore-based trade finance origination and distribution platform. The other is SOLV, a B2B digital commerce venture in India that also provides small and medium enterprises access to financing and yet another is TASConnect a bank agnostic supply chain finance platform that unlocks significant value for organisations.
“SC Ventures is distinct from other Corporate Venture Capital (CVC) arms as it brings together an innovation lab, investment fund and venture building under one umbrella,” explains Gurdeep Singh Kohli, one of the founding members of SC Ventures at Standard Chartered, based in the UK. “The venture building arm is creating an ecosystem of business models with partners across six themes and across markets; the investment fund balances the strategic and financial objectives by taking minority investments in FinTechs we have worked with and helps them scale, and the innovation lab has capabilities such as the Fintech Bridge and the Intrapreneurship programme which we are now offering as a service to clients.”
The team has built a diversified portfolio of ventures and investments across six key themes (digital banking and lifestyle; SMEs and world trade; online economy and payments; digital assets; sustainability and inclusion and capabilities as-a-service) all woven together by a keen purpose. “Our aim is to rewire the DNA in banking and be a force for good by fulfilling society’s expectation of banking and finance,” says Kohli.
The work of SC Ventures is particularly timely now. It is at the nexus of technology changing the role not just of banking but also corporate treasury and how companies interact with their banks. The unit also seeks out solutions to corporate challenges in today’s macro environment, like pressure on real-time payments and financing and increasing liquidity costs as governments unwind Quantitative Easing (QE). “Corporates are also facing disruption in supply chains, leading to the need to both ensure the resilience of their supply chains and integrate Environmental, Social, and Governance (ESG) practices,” says Singapore-based Amelia Ng, CEO at Olea, a trade finance platform formed as a joint venture between Standard Charted and Linklogis, a supply chain finance technology provider in China.
Partnership is a key tenet of SC Ventures’ model, be it with clients or FinTechs. Most of the ventures either already have or will be built with a strategic partner.
Northern Trust partnered with Standard Chartered to launch Zodia Custody, an institutional grade custody solution for digital assets. Lenovo is the first anchor client and co-creation partner for TASConnect and more recently, SBI Holdings of Japan became a strategic partner and investor in SOLV.
Partnering with FinTech’s has yielded some of the most exciting innovations, in a process where SC Ventures strives for end-to-end engagement. It begins with scouting for solutions, doing a proof of concept and culminating in investment and helping those companies scale. “FinTech bridge is an open platform where close to 2,500 FinTechs have registered to date and where the bank and its clients can post business challenges,” explains Kohli. “The skills are complementary. FinTechs bring new technology, a culture of experimentation, efficiency, and a forward-looking view of the world, while Standard Chartered has institutional knowledge of banking, an understanding of client pain-points and the ability to build secure, bank-grade infrastructure as well as deep institutional relationships.”
Olea illustrates this partnership mindset. The platform offers trade finance to businesses, particularly SMEs and provides an opportunity to invest in trade finance for institutional investors who are keen to tap an asset class less correlated with bonds and equities. Olea combines the two through technology, enabling deal origination, payment services, data value creation and risk management.
Olea’s active promotion of sustainable economic development and inclusion in underserved markets also reflects ESG integration in SC Ventures’ companies. “Emerging markets in Asia are a very fertile ground for origination of suitable ESG or impact assets given the agenda for energy transition and financial inclusion,” explains Ng. “The pressure on treasurers and CFOs of corporations to provide appropriate ESG metrics on their supply chains will be relentless in the years to come. This is a complex topic and an area where technology and data analytics will be of considerable help.”
The new companies emerging from SC Ventures offer treasury solutions across securities services to payments, supply chain, trade finance and FX. Scaling innovative solutions takes time because of the complexity, bank-grade security, and high governance standards, but Kohli and Ng are also convinced that it is one of the most exciting areas of financial services. “This is a space for FinTechs, clients and banks to really collaborate given the complimentary skills. It combines the power of innovation and experimenting with institutional knowledge and scale,” concludes Kohli.