Technology startups: A different type of banking customer

SME Banking
29/03/2023 Article
profile picture of Fatih Öğün

Fatih Öğün

Akbank

Head of Strategy

Startup companies are occupying headlines in many different industry verticals. In industries like financial services, telecommunications, technology and energy, startups are at the forefront in disrupting their given industries and/or adjacent industries. There are myriad reasons for this: small and nimble organizations, quick decision making, ability to test and fail, capability to initiate activities with small-size financing options, and the ability to test uncharted waters much better than large companies are willing to do. They are the product of an age where ‘the fast fish eats the slow fish’ rather than ‘the big fish eats the small fish’.

Looking from this perspective, it is also important to note that these attributes make startup companies a special group of customers in banking industry. The reason we are using the term ‘special group’ is that although the basic needs of startup companies are similar to other companies, the format of these needs are different. When we look at the structure of startup companies, whether they are early-stage or late-stage, they are young companies with a very limited financial history and in many cases, they do not have physical collateral to be used in different financial instruments. Despite their potential, this lack of historical view makes the financing decisions and options difficult from the banking perspective. In addition, it is harder to predict the future performance of the startup compared to conventional businesses, which operate in well-defined industry boundaries including hundreds or thousands of similar companies. 

Want to keep reading?

Create a web account to get access to more insights

Related news & insights

ESG
24/06/2024 Interview

Further Insights: The future of food – Addressing overconsumption and health

The way we produce food and the way we eat poses serious problems in terms of sustainable development and public...

Digital Reinvention
24/06/2024 News

Commonwealth Bank of Australia launches CommBank Smart Health for Pharmacies

Developed in collaboration with Scrypt Ventures, this innovative omni-channel solution aims to enhance how patients pay for their medications and...

SME Banking
23/06/2024 News

Commonwealth Bank of Australia introduces loyalty program for businesses

The Commonwealth Bank of Australia (CBA), a leading force in the Australian banking sector, has unveiled an array of innovative...

SME Banking
20/06/2024 News

Societe Generale to sell subsidiary Shine to Ageras

This strategic move is part of Societe Generale's effort to streamline its operations and concentrate on its core retail banking...

SME Banking
18/06/2024 News

Brex launches new digital banking products for startups

These enhancements aim to provide greater saving flexibility and higher yields for startups. Partnering with Column N.A., Member FDIC, Brex...

Insurance
17/06/2024 Article

Qorus Reinvent Forum 10 key takeaways

The Qorus Insurance Reinvent Forum in Lisbon was an eye-opener. Simon Cashmore, a long-time collaborator with the Qorus content team,...

16/06/2024 News

BNP Paribas and BPCE announce strategic partnership in payments

The collaboration aims to create a state-of-the-art payment processor to streamline card payments for cardholders and merchants.

SME Banking
16/06/2024 News

Trustly launches AI-powered recurring payments to boost European subscription economy

Trustly, a global leader in open banking payments, has unveiled its AI-powered recurring payments solution, set to revolutionize how merchants...