If this has happened to you – and it probably has – you know how frustrating it is: You have two close friends; both are smart, talented and at the top of their game. They’re remarkable individuals, but together they could be world-beaters. They’re a classic case of “one plus one equals three” … if only someone could connect them.

Yet, try as you might, you can’t manage to make the game-changing introduction. Your friends live in different cities or countries, or speak different languages, or are just too busy. Or all of the above.

The Forum, you see, has two friends of its own who should be connected but haven’t managed to do so. Connecting them is not inconsequential. Together they have the potential to create a revolution in streamlined business offerings and financial services around the world.

Allow me to introduce them, networkers of the world, in case you can help: You already know one of the Forum’s two friends: it’s the global financial services industry – the banks, insurers, card companies, credit providers and lenders that serve businesses around the world. The other friend is probably less familiar, at least by the nickname we’ve given it: We call it NGC, or next-generation company.

NGCs are a new breed of innovative, fast-growing companies with pioneering business models. They often get their start in one of the world’s rapidly developing economies by bringing needed products and services to unserved markets. But these companies quickly expand beyond their home markets because they are not shackled by legacy technologies, costly service platforms and traditional concepts of “the customer” that hinder many of their mainstream competitors.

The commercial vision propelling these NGCs has created sleek customer services, groundbreaking products and streamlined offerings that have invigorated competition globally. Many NGCs are quickly developing into sophisticated global players with increasingly sophisticated financial needs.

And there’s the rub. They need a little help from our other friend, the world’s financial services companies. Unfortunately, evidence shows that NGCs are little understood and often underserved by traditional financial players, who are missing out on a potentially huge and quickly growing market.

The reasons are understandable: The youth, dramatic growth and non-traditional business models of NGCs all contrast with the traditional structures, stability and measured pace of growth that financial services providers know and value. NGCs, being young, lack established relationships. Their risk, cash-flow and balance-sheet characteristics don’t match traditional credit benchmarks, and they often have few physical assets.

The problem and possible solutions need to be discussed. There are roles for financial providers, regulators, governments and, of course, NGCs themselves.

Please join the conversation. Help make this networked world a little more networked in a very big way.

Author: Isabella Reuttner is Associate Director, author of the Closing the Gaps: Financial Services Needs of Next-Generation Companies report and the Financial Development Report and Member of the World Economic Forum’s Global Agenda Council on Financing and Capital

 

Image: City workers make phone calls outside the London Stock Exchange REUTERS/Toby Melville