December, 2019 - Fiduciam

As many entrepreneurs and SMEs discover to their despair, it has become difficult to count on the traditional banks when they need a loan for a new project or to expand their business. Traditional banks across Europe continue to reduce their commercial loan books as a result of the Basel III rules. A check-the-box culture, a sharp reduction in number of relationship managers and lengthy and unwieldly loan application processes make it increasingly difficult for many entrepreneurs and SMEs to rely on traditional bank finance. This void is being filled by a number of alternative lenders, such as Fiduciam. 2019 has been a good year for Fiduciam. We continued our rapid expansion by hiring 25 additional staff members. Our loan book surpassed €260 million in size and monthly production has been increasing rapidly through the year. October was a record month with over €51.7 million of new loans provided to entrepreneurs and their enterprises. In 2019 we also successfully expanded into Germany by opening an office in Frankfurt and we closed our first Scottish loan.

We are looking forward to an even more successful 2020 and wish all our clients a happy and prosperous new year.

The world of finance and corporate culture are not always the best partners, as I have been able to witness extensively during my city career. There is the culture of greed, but greed is a biological imperative and not really culture. During my days at Merrill Lynch the board wanted to define a clear culture and launched the “five principles”, I still remember them by heart: client focus, respect for the individual, teamwork, responsible citizenship and integrity. But as the synthetic CDO debacle demonstrated during the financial crisis, these principles did not mean a lot to a number of Merrill Lynch employees and managers. Had they done, Merrill Lynch would still be around as a successful independent firm.

For a corporate culture to be successful, it cannot just be a declaration, it needs to be embraced by all employees and be part of the DNA of a company. It pulls employees together behind a mission, brings meaning to their work, gives them a sense of belonging, allows them to take pride in their jobs and motivates them. This in turn leads to better performance and more satisfied clients, as research has shown over and over.

In the financial services industry, the importance of corporate culture goes well beyond this, as it keeps a check on the biological imperative we are all born with: greed. Financial services and greed are like fuel and fire. Therefore, corporate culture has a very important role to play here, to channel this biological imperative into something constructive and sustainable.

In this respect too much focus tends to be on rules and policies. These can easily be circumvented and rarely deal with all situations in our complex world. I am of the strong belief that for risk management to be successful, corporate culture is much more important than rules. Yet it beggars belief that most of the focus of regulators and bank managers still tends to be on the latter, whilst largely neglecting the former. The financial crisis did not happen because of a lack of regulation, it happened because too much reliance was placed on regulation and nobody cared about the corporate culture of financial institutions.

It is the role of management to install a corporate culture, it does not grow simply by itself. Therefore it is crucial for each manager to live the corporate culture day in, day out. Just proclaiming a few principles does not make a lot of difference, as the Merrill Lynch example shows.

The corporate culture I try to embody every day at Fiduciam is one of diligence, integrity, hard work and fairness, in an environment that is diverse, young, pleasant and ambitious. No policy can ever replicate the benefits such culture brings and, most importantly, such strong culture is the necessary foundation for our rapid growth as a successful marketplace lender.