KB SmartSolutions helps Komerční banka build financial services of the future

Tomáš Michálek, StartUp Scout at KB SmartSolutions

Last week Olena Gryniuk talked to Tomas Michalek, StartUp Scout at KB SmartSolutions in the Czech Republic, on how Komerční banka cooperates with fintechs. Read the full conversation below:

Olena Gryniuk: What is the main activity of the KB SmartSolutions? What is your potential?

Tomas Michalek: To build the bank of the future, it is necessary to learn how to cooperate with fintechs and start-ups in a closer way than is actually usual for corporations. And that is the mission of KB SmartSolutions. Our role is to interconnect the best characteristics from the two seemingly inhomogenous forms of business – the corporate world of the bank and the world of fintechs and start-ups. 

We try to do this as smoothly as possible. In the first place, we meet the people from the bank, and we ask them what their pain points are, what impedes them to accomplish their goals, and what they miss to be able to solve various needs of our clients. Based on these discussions, we search for potential partners. We plan to make investments in their products by developing their business model to make it mature enough for our clients. Or we can also create a distribution partnership with them. There is quite a full scale of possible cooperation scenarios.  

On the other hand, KB SmartSolutions also provides help to internal start-ups. 

Members of the KB SmartSolutions team working on a internal start-up with the authors of start-up ideas

OG: You mentioned internal start-ups, please tell us more about how does this work in Komerční banka?

TM: KB SmartSolutions, under the patronage of Komerční banka’s top management, gives all its employees a chance to submit an idea for a start-up. Such an idea shall support the bank’s current business activities and improve, complement, or somehow develop its existing products or services provided to clients.

Thus, the internal start-up provides specific security (or, in other words, protection) from the bank. This is something that an external start-up (arising on the market) does not have. To say so, the internal start-ups can evolve under the wings of the bank.

So as do they have at their disposal the bank’s know-how, managerial experience, and full support from the members of KB SmartSolutions during the seed and the incubation phase. On the other hand, we logically require a significant level of involvement in the building of the start-up, the very much same level of self-reliance, a willingness to develop the idea, and a motivation to provide the best solution possible.

OG: Who are these „courageous partners” that you are looking for?

TM: To be able to accomplish our mission and really be able to build the bank of the future, we need to find those fintechs, start-ups or companies that have great ideas, courageous goals and can provide so-called „smart solutions.” Even in our best effort, we are not able to discover that solely on our own. Fintechs are not our competitors, but in most cases, our natural allies.

We focus on fintechs and start-ups in various development phases – from those relatively (well-) established, which already offer the second generation of their product, to those younger ones but already at the beginning of their growth phase. We do not zero in on neither start-ups in their incubation „seed” phase nor big fintechs with the value of tens of millions of euros.

OG: How many people work in the KB SmartSolutions?

TM: From its establishment at the beginning of 2019, the KB SmartSolutions increased to nine employees in a number. This includes positions in the field of scouting, company Development, or communication.

The company works under the management of two directors – Patrik Nový and Jiří Přibyl. Patrik is responsible for the business, liaison with the market, and development of business models of cooperation. Jiří, on the other hand, is more oriented on the company’s financial and operational part. However, KB SmartSolutions is also kind of a start-up and, therefore, everybody has to do what is actually needed.

OG: What does your everyday job look like? Is it different now in times of remote work?

TM: As of the content looks our everyday job very similar to the situation before COVID-19. Though the way in which we organize within the team has changed. With colleagues from the KB SmartSolutions and Komerční banka, we do not see each other daily, so the social connection has slightly faded away. We can only hear each other via Skype (as switching on the video is rarely) or mobile phone. In some cases, this may be a bit inconvenient as personal contact is something natural and also in business. The most influenced activity in this situation would be the KB SmartSolutions scouting activities. Although, even in this area, we try new ways of working and keep it going.

On the other hand, we in KB SmartSolutions find it quite fortunate to be able to perform our activities in the actual situation and still be able to create value for the bank. 

OG: How do you scout for the fintechs/startups? What the areas/challengers solutions for which you are searching now? What the priorities right now?

TM: When scouting for new fintechs and start-ups, we use our partner’s network and available online start-up databases. As a member of Komerční banka Group and the Societé Generale Group, we have at our disposal the network available. These two areas together provide us with a pretty vast list of fintechs and start-ups for possible cooperation.

Moreover, there are a few of them that come to us through a reference or thanks to some form of promotion.

In respect of our priorities, we focus on building an ecosystem of services for SB/SMEs and sustainable development and green start-ups. One of our priorities is connected to COVID-19, as we are really trying to help our clients to work it out and get out of this situation even stronger than before. 

OG: Can you share some success cases of the joint implementation of the startup and Komercni banka?

TM: We are already actively working on various cases, i.e., having a serious discussion with multiple startups and entities regarding the forms of cooperation. Unfortunately, we still cannot talk about most of them due to negotiation reasons. However, we can reveal that these are from the AUM (Assets Under Management), services for SME business or crowdfunding, or renewable energy. But these are not the only areas of business we are looking at.

OG: What would you name the main preconditions, both from the bank’s side and startup’s side, to make the implementation of common solution possible and successful?

TM: Firstly, we need to find a value to both entities and their clients. On the bank side, business units have to recognize the importance of cooperation and allocate appropriate resources. Startups are usually very keen on cooperating with large corporations like banks, but they also need to understand how their partner is working and operating their business. And this is closely connected with a necessary level of motivation on both sides, which can result in some form of cooperation model.

OG: How do you cooperate with business lines inside the bank? In particular, with the SME business line? Who initiates the need for the solution/challenge? 

TM: We can say that in this area, both parties are the initiators. As already mentioned above, we regularly meet with the people from the bank, especially tribe leaders, discuss their pain points, their needs to be fulfilled, and the issues to be solved. 

Using this information, we search for potential partners.

Sometimes, it occurs in the opposite way when we spot something interesting and bring the idea to the respective business unit. Our job is to be here for our clients. We are always glad when startups and fintechs with interesting ideas contact us so we can talk to them and discuss their solution. All the information about KB SmartSolutions and also the contact information can be found on our website https://www.kbsmart.cz/en/.


Tomas Michalek will be speaking during Annual CEE SME Banking Club Conference 2020 on November 25. Register to attend now!