Of all the startups you could be building, why banking?
If I had a nickel for every time I was asked this question…. 💰💰💰
To be fair, it’s a totally legitimate question. I didn’t major in Finance. I deliberately stayed away from banking recruitment while in university. The banking system is rarely a topic I bring up in conversation. So point taken: Why banking?
Ironically, it’s not about banking at all. It’s about what banking allows people and businesses to do. It’s about empowerment. Banking, done right, can make it easier for small and medium businesses (SMBs) to face the challenges of staying afloat and to ultimately thrive. So rather than be a source of stress, banking can be a remedy for it.
Why now? The last decade has seen the emergence of new technologies, business models, and customer behaviours that have opened the door for banks to serve customers well like never before. Getting this right is a fight worth fighting. Big banks, small banks, startup banks, and anybody serving banks; we all have a role to play in improving the lives of those working in SMBs.
There is no need to hide the obvious — helping SMBs is good business. Yet, it also serves a noble purpose. There are millions of women and men whose small and medium businesses power our economy — they are responsible for nearly 65% of global GDP and employ over 90% of the world’s workforce. Here in Canada, those figures are lower, but still very meaningful (over 40% of our GDP and nearly 50% of the workforce). Yet it takes bravery to build a business — the risk is high and the reward is never guaranteed.
We need SMBs to succeed. They play a critical role we too often take for granted. They provide goods and services in the swankiest streets of our big cities, but also on the dusty roads of our countryside. They nurture the next generation of female and minority business leaders. They provide opportunities for immigrants to start over. They are one of our best shots at reversing the widening income inequality gap that has emerged over the past few decades. And yet the heroes of the SMB sector rarely make it to the cover of Fortune when they succeed. Rather, they make it to retirement in one piece, and almost certainly with battle wounds to spare.
So why banking? Because over the last few decades, it has become increasingly harder for banks to remain their client’s financial champion. Some have even abdicated the role altogether. Only the great ones haven’t. The pain SMBs have in interacting with their finances and their banks shows that we need more great banks in our world, as odd as that may sound if you say it out loud (try it: it gets you excited and confused at the same time).
This is the third post of a series entitled The chronicles of an entrepreneur, a window into the real story behind Eytan, his team, and the building of NorthOne, a digital banking startup focused on helping SMB’s.
Read the previous instalments, The Chronicles of an Entrepreneur : Act 1, Scene 1 and Am I the right driver for this car?