Trying to sell your payments solution to Nedbank is no easy thing. While the banks gets between 10 and 15 requests from startups a month, it turns down most of these.
Chris Wood, Nedbank executive of emerging payments, strategy and regulation, says he takes a hardline on deciding which ideas to go with and which to turn down.
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“My motto has definitely become ‘I choose what to say no to, long before I choose what to say yes to’. If we said yes to every idea, we’d have so many competing things going on that our customers would lose track of what services we actually provide,” says Wood.
My motto has definitely become ‘I choose what to say no to, long before I choose what to say yes to, says Nedbank head
So what then can startups do to ensure their idea is more likely to be one of those that the bank is keen on? Ventureburn finds out more from Wood.
Ventureburn: What are some important tips for startups looking to approach Nedbank with their idea for an app, widget or platform? What should they prepare or think about beforehand about their idea to the company?
Chris Wood: When startups pitch their ideas, it is always a good place to start to consider what else is out in the market that might be solving a similar problem. If there is, what is different about the solution they are proposing and how will it elevate the customer’s experience to the next level or allow them to do something they couldn’t do before.
In essence, have they done their homework and thought about what their proposed solution will do for both the bank and the customer?
Most importantly, what is the complexity to make use of the service and what will it cost? I often see ideas that are neat in isolation, but don’t have any application in a broader ecosystem or where the startup doesn’t actually have an understanding of the complexities of the financial services industry, either technically or from a regulatory perspective.
VB: What channels should they go through and what kinds of things should they have prepared and got in order before approaching the bank with their ideas?
CW: Ideas typically come into the bank through multiple channels, so there is no one specific entry point and that’s okay. It’s impossible for the bank to be plugged into every potential conversation or idea out in the market, so as long as it finds its way to the right people inside the bank, via the initial contact point (and it typically does) then it will get the right audience and a favourable or negative response.
It really helps if the team doing the pitch has some form of information that can be shared ahead of time, before a potential face-to- face meeting so that the person inside the bank has an idea of what is being pitched and can formulate some questions in preparation.
VB: What is the process one usually follows when one is trying to sell a product or service to the bank? Who does it all have to pass through there, usually?
CW: It’s not hard wired. Sometimes an idea can come from a conversation held in the gym or at a braai and then via the internal network inside the bank the person who first had the chat will find their way to a subject matter expert or product owner. This can take some time if that bank employee isn’t sure of who to go to, but I do find that it usually gets to the right person in the end.
As such, there isn’t a platform or direct channel where all ideas might flow, but that would be hard to control in any large organisation.
There are certain platforms, for example the Nedbank LaunchLab incubator in Stellenbosch where businesses may have more direct access with Nedbank as we have a relationship there.
In terms of what the idea needs to pass through, the general consensus is that a decision on whether to proceed or not is made in the face-to-face meeting based on the quality of the idea, the potential and the complexity of making it work in the market.
VB: How can startups improve the way they deal with corporates? Are there certain things that make them look more professional?
CW: I don’t know that we should want startups to look and feel like corporates, the basis of their differentiation is that they aren’t a carbon copy of large company engines. I think the aspect that elevates them the most is how much they know about their chosen subject and how they translate these ideas into something that can be executed.
I am a firm believer that an impressive entrepreneur, one with passion and capability, is still better than a polished idea. At least the entrepreneur we can work with, the idea might be something that has been done many times before.
VB: What are some common mistakes you see startups that want to sell tech products or services to the bank make?
CW: They have grand plans based on what they see as a market need, but haven’t really understood the customer need or even who the customer might be. I also think there is an expectation that all startups are scaleable and that isn’t the case.
Investment in good ideas often comes down to whether or not these ideas can sell themselves and get usage or activation without a hard sell. Most startups I see still require lots of heavy lifting inside the bank or in an ecosystem that isn’t actually looking for more complexity or friction.
VB: How many pitches do you currently get from startups per month on average and what kinds of services and products are they usually pitching?
CW: Easily 10 to 15. Because of my role in payment innovation, everything nowadays requires a sort of payment integration in order to make money or allow transactions to happen. This means that I see everything from retailer apps to “payment network disruptors” and everything in between.
My motto has definitely become “I choose what to say no to, long before I choose what to say yes to”. If we said yes to every idea, we’d have so many competing things going on that our customers would lose track of what services we actually provide.
VB: What kinds of (innovative) services and products is the bank looking for?
CW: Ideas that challenge us on how we operate and make us think more deeply about what our customers might need.
We are very aware that the world of banking and financial services is ripe for disruption, but it’s going to be a handful of key things that changes what, for many, already works, rather than lots and lots of disparate apps and services that require the customer to subscribe to these and use a fruit salad of applications to achieve what they should be able to do through one platform.
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