Relying on our vast experience in negotiating with the financial system, we have the idea that the banking sector has two very different ways of working with companies:
• On the one hand, a more classic approach to functioning, where everything takes a long time – 3 or 4 months is not too long to get financing – with hierarchical and very centralized structures.
• On the other hand, an approach – less frequent, as far as we can see – in which by finding the right person within the bank, a more agile vision is achieved. When approving the financing, we have a quicker decision, and the same in refusing it. We try, for our part, to keep this type of banks close by.
In this analysis, we set aside two realities – outliers, let’s say – on the one hand, mortgage credit (private individuals), which for us translates into a certain schizophrenia of commercial aggressiveness. On the other hand, loans associated to public/mutual guarantees, where obtaining financing is easier, given that the banks’ risk is shared with third parties.
Although we must know how to work with all the banks, we still have a profoundly critical view of this issue and it seems to us that it would be good for the banking supervisor to establish more demanding standards on this issue, encouraging more agile decision-making processes that are compatible with the sec. XXI.
We have newspapers and social media full of cheap talk of machine learning and artificial intelligence, but the reality of those who support medium-sized organizations is sometimes exasperating.
The slowness and bureaucracy in the decision-making processes of public and private organizations is one of the core problems (along with public expenditure totally out of step with how much the economy can pay) that our common democratic experience has not yet managed to resolve. We will have to solve this one day and 2022 would not be too soon. By the way, if it weren’t asking too much, maybe we could give priority to a sector that represents 15% of GDP and is one of the biggest exporters.
Perhaps we must make consensual within the decision-makers’ heads, a 6th sense: the Sense of Urgency. It’s just that a euro is a euro, but it’s worth less if it only comes in a year.
Happy New Year!
Luís Barbosa
Financial Architect
ABC Sustainable Luxury Hospitality