Disruption has finally come to the business banking sector. Innovative startups — even mature companies that have become tech enabled — can now access lower-cost, streamlined banking services and loans through a new digital bank.
Since the financial recession, fintech startups have been changing the lending landscape for small businesses. However, business banking has not kept up. Except for Grasshopper Bank, named after Admiral Grace Hopper, who helped develop the software on which banking is based.
"Traditional banks, limited by antiquated and burdensome legacy systems, are less equipped to meet the needs of early-stage companies," Erwin said."Their business models and infrastructure do not position them to provide products and services for today's digital entrepreneur at affordable prices, or to take advantage of new technologies around data, security, and user-friendly access.
Raising money is always a challenge, especially in an anti-start-up bank environment. At first, investors did not understand the opportunity to invest in a venture bank or why a bank would spend so much money on its tech capabilities. However, Erwin knows a thing or two about the needs of the start-up and innovation economy. She was part of the founding team at Square 1 Bank, which was sold in 2015.
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