These startups were role models for "Bad Banks"

These startups were role models for "Bad Banks"
Bankers are very frustrated. "Let's face it, investment banking is dead," says Adam, one of the protagonists in the second season of "Bad Banks". "We are on a sinking ship." If you believe the makers of the series on the financial world, then Frankfurt am Main was yesterday. If you want to determine the banking business of tomorrow, you have to go to Berlin. To the fintechs, the startups from the financial sector. Or as Adam puts it: "In Berlin you are building the hot incubator and we are waiting here for the sinking."

It's not out of thin air. There are now almost 300 financial start-ups in Berlin - more than in Frankfurt am Main, Hamburg and Munich combined. Like the bank in the series, investors have recognized this in reality. Since 2012, venture capitalists have invested almost five billion euros in Berlin's fintechs.

That is probably why the creators of the series were inspired by the capital. Screenwriter Oliver Kienle visited the Berlin fintech incubator Finleap for research purposes, for example. Over the past six years, 17 financial start-ups have been created under his roof alone - from the account change service to his own bank for start-ups. Anyone visiting Finleap will discover some details that have made it into the series.

There is the free cereal in the kitchen, there is yoga during the lunch break, table football and table tennis, and herbs and vegetables grow on the roof in summer. Also in the series, the founders do sports in the office and help themselves at the snack bar. "This is a bit clichéd, but it corresponds to reality," says Finleap spokeswoman Ina Froehner.
However, there are two differences. Finleap emerged from the start-up scene, so behind it there is no bank unlike in the series. And: With “Bad Banks”, the incubator is located in a futuristic building, which you won't find in Berlin. The exterior scenes were recorded in Luxembourg, where the cube belongs to the university and is used as an event space for concerts. The headquarters of Finleap, on the other hand, looks almost unspectacular - and its history is significant: the Berlin bank had its headquarters for a long time in the bulky 1950s high-rise building on Hardenbergstrasse. When it went down, the founders moved in.

"No one will go to the bank in the future"
Because, as in the series, the banking world is in a state of flux in reality. Money houses reacted to digitization later than other industries. Most customers are already using their smartphones for their banking transactions, and they rarely come to the branch. "In the future, no one will go to the bank to open his account," says "Bad Banks", the former head of the investment department, who takes over a startup after a detour to prison. He thinks bank branches are "fucking old school" - "everyone has their account on their cell phone".

This is one of the reasons why some bankers turn around in the series as in real life. At “Bad Banks”, the founder of the start-up Greenwallet is a former investment banker who switched sides. He previously had a career at Goldman Sachs - just like Erik Podzuweit in reality. Before he built the Fintech Scalable Capital, he also worked at Goldman Sachs: first two years in London, then five in Frankfurt, where his boss was Jörg Kukies - today State Secretary in the Federal Ministry of Finance.

But Podzuweit was drawn to the start-up scene instead of politics. “I've seen new business models emerge on the Internet. I wanted to be there, ”he says. After a stopover at Westwing, an online furniture retailer, he founded Scalable Capital in 2014 with colleagues.
Like the start-ups in the series, this is a roboadvisor. If savers deposit their money with him, the computer will automatically invest it depending on the risk tolerance. Or as founders explain in the series: "If you want to invest your money, you no longer have to trust a vulture of bankers who only wants to rip you off, but an algorithm."

Investors trust the algorithm instead of the banker
In fact, several such roboadvisors have emerged in Germany in recent years. Around 20 are currently on the market. But will they survive? "All roboadvisors have the same problem," says main character Jana in "Bad Banks". "There are too many and they are almost identical." Their forecast: They will cannibalize each other in the next few years. Scalable Capital founder Podzuweit thinks this is a good analysis. "A handful of the 20 roboadvisors will survive," he says. "But those who do have a real chance to change the market.

The Hamburg start-up Tomorrow is still owned by the founders and should remain so. Like the flagship fintech in the series, it focuses on sustainable finances. The creators have developed a “green” account for the smartphone. They invest their customers' savings in a green bond, for example in wind energy and energy-efficient buildings. "We want to make sustainable finances fit for the masses and contemporary," says co-founder Jakob Berndt.
He and his colleagues are currently benefiting from the climate protests. Even Larry Fink, the head of the world's largest wealth management company, Blackrock, has announced that he intends to focus more on sustainable investment in the future. In the series Jana says: "The topic of sustainability works in the food industry, it works for electricity providers and it will also work in the financial sector."

The office in the series: black walls and techno music
Berndt, the founder of Tomorrow, has already looked at “Bad Banks” with his colleagues and discovered common ground. Tomorrow, for example, is also based in a backyard - but on Sankt Pauli instead of in Kreuzberg as in the series. In addition, her office looks more normal. "We don't have black-painted walls and we don't have techno music all day," says Berndt.
In his opinion, the series makers have also exaggerated in other points. In “Bad Banks”, for example, nothing works without the “Lead Engineer”, the top programmer. Berndt, on the other hand, says: “We have 15 employees who share responsibility.” It is also unrealistic that a fintech will be offering its service worldwide overnight. The regulatory requirements are far too strict for this, and the banking market abroad simply works differently than in Germany.

The Berlin smartphone bank N26 also experienced this. From it, the makers of the series have copied the name for the second start-up: Fin21. The original N26 is now active in 26 countries. But the expansion dragged on. For example, the founders had to postpone their start in the USA several times because they do not have their own banking license for the American market and were therefore dependent on a cooperation partner. Berliners are also said to have found it difficult to find staff in the United States.

Start-ups like banks vie for developers
All founders suffer from the lack - especially of developers. This is also addressed in “Bad Banks”. Out of necessity, the start-up in the series therefore hires a horde of developers in Ukraine and entrusts them with their sensitive data without checking. Scalable Capital founder Podzuweit says: "This is unthinkable, especially in the financial sector." In addition, it was no longer easy to find developers even in Eastern Europe. "The market is swept clean there too," he says. For this reason, Podzuweit is increasingly recruiting developers in South America for his roboadvisor: in Brazil, Argentina and Colombia.

This is another reason why banks seek proximity to fintechs. "Young companies attract very good tech talents that the institutions cannot address at all," says Finleap boss Ramin Niroumand.
That is why banks, like the ones in the series, have long since launched programs that seek proximity to fintechs. For example, Commerzbank founded the so-called Mainincubator in 2013 and is currently involved in 17 start-ups. Deutsche Bank, in turn, operates five Innovation Labs in Berlin, London, New York, Palo Alto and Singapore, whose employees keep in touch with founders to use their technologies in the group if necessary.

For example, a US start-up helped the bank to automatically update data with the help of artificial intelligence in wealth management - a job that previously had to be done manually. The bank calculates that in the past five years it has had contact with 3,600 startups in one way or another via the laboratories alone.

Even with "Bad Banks", the bankers have recognized that you can't do without the fintechs. This becomes clear in the first episode when the CEO visits the honeycomb-like incubator where the founders work. "Impressive," he says. "Whether we like it or not, that's the future of banking."