BANKING THE INNOVATORS: SILICON VALLEY BANK CEO GREG BECKER
BANKING THE INNOVATORS: SILICON VALLEY BANK CEO GREG BECKER
February 24, 2020
Silicon Valley got its name in 1971, in the title of an article by electronic news reporter Don Hoefler, who had heard it at a business lunch. The valley -- originally the southern part of the San Francisco Bay Area -- was becoming the cradle of global technology innovation driven by the invention of transistors and chips made of silicon -- the 14th element on the Periodic Table.
These companies were introducing not only new technology, but also new business models, enabled by the concurrent emergence of a new breed of venture capital firm. They needed a new kind of bank. About a decade later, one was founded to serve them.
We met on a sunny day at their offices on Sand Hill Road in Menlo Park. The building is unique among banks, that I know of, in having a lobby wall displaying wines from their specialty financing group that serves vineyards and wineries. SVB’s market includes a wide spectrum of tech sectors, including health care, space technology, and AI. Greg and I had a wide-ranging conversation about innovation in general, and fintech innovation in particular, in the US and around the world.
A theme of our talk was Greg’s insight that fintech has shifted from its early focus on supporting large industries to, today, disrupting them. He thinks -- and I agree -- that their innovation is now forcing financial companies of all types and sizes to deeply rethink their traditional business models. He also thinks the industry should assume that Big Tech will enter financial services on a larger scale. While he thinks some banks won’t successfully make the tech shift, he is confident that many will, and he believes, as I do, that both providers and consumers will be better for it.
SVB is a global business. Greg talks about how innovation is coming faster internationally than in the US -- he cites China as an example -- which means that SVB needs to be in touch with trends in the innovation hotspots worldwide. In addition, he notes that SVB’s US customers tend to expand internationally at an earlier stage than non-tech companies do, further reinforcing the need for global reach.
Greg is optimistic about tech, including the power of fintech to drive down costs and therefore open financial access to nearly everyone -- he cites the book, How the Poor Can Save Capitalism by John Hope Bryant. He says adding AI to anything is like putting it on steroids, making everything much more interesting and powerful. At the same time, he shares his thinking on what we should worry about, including the ethics and impacts of AI and medical technology.
We talked about regulatory trends, including which countries are creating welcoming environments for innovation -- he mentions the UK, Israel, and China and has an update on India. He talks about the regulatory challenges ahead as fintech reshapes finance, and offers some advice for US regulators, including on privacy.
He also offers both business and regulatory advice for startups, based on his many years of seeing success and failure.
Greg Becker has been a champion of the innovation economy since he joined Silicon Valley Bank in 1993 as a banker to fast-growing technology companies. Today, he is the CEO of the world’s only bank dedicated to the innovation sector around the world.
Silicon Valley Bank’s mission is to help increase the probability of its innovative clients’ success globally. Under Greg’s leadership, Silicon Valley Bank’s growth rate has continued to outpace other banks. SVB has been named one of the best banks in America, one of the fastest-growing public companies in the U.S., and one of the best places to work. SVB is also an advocate for entrepreneurs, their investors and corporates in the innovation sector internationally. In 2018, SVB joined the S&P 500 and became a member of the Bloomberg Gender Equality Index. Greg has been recognized as a top influencer in global finance by Worth Magazine and was named the #1 bank CEO for midcap banks by Institutional Investor Magazine.
In 2018, Greg was elected to the Federal Reserve Bank of San Francisco as a Class A Director. He is a member of the Executive Council of TechNet and the Silicon Valley Leadership Group (SVLG), where he was the Chairman from 2014-2017. Greg was also a member of the U.S. Department of Commerce’s Digital Economy Board of Advisors from 2016-2017.
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If you haven’t already, be sure to check out my recent thought-provoking conversations with two heads of US bank regulatory agencies: Comptroller of the Currency, Joseph Otting, and FDIC Chairman Jelena McWilliams. Coming up, we have a show with Jeff Dyer about his book, Innovation Capital and we have a conversation with Ellison Anne Williams of Enveil. We have a fascinating discussion with David Reiling, CEO of Sunrise Banks, and also one with Sarah Willis of the Metlife Foundation and Allie Burns, CEO of the nonprofit Village Capital. We have a very interesting conversation with Sharmir Karkal and Angela Wilson of Sila. And I know you’ll enjoy my discussion with Albert Forkner, State Banking Commissioner of Wyoming, about their efforts to make Wyoming the US hub of crypto finance.
