The Academic Who Lives In The Real World

March 31, 2017 • By TAB team

This week we speak to Peter Sands, former Global CEO of Standard Chartered and Crowdsurfer investor, about his career, crowd finance, and investing in Crowdsurfer.

Peter Sands is former Global CEO of Standard Chartered, credited for an immense period of growth at the universal British bank during his stewardship, and for driving the bank’s great success in emerging and international markets. He’s also recognised as being responsible for steering the bank successfully through the financial crisis of 2007/08, during which time he played a key role in devising the UK government's bank bailout plan.

The son of a naval officer and an artist, Sands graduated from Brasenose College, Oxford, and as a Harkness scholar from Harvard. He now splits his time between Europe and the United States, where he is Senior Fellow at Harvard Kennedy School. He is also an investor in Crowdsurfer and a prolific writer and academic.

When in London, he lives with his novelist wife, Betsy Tobin, in Highbury, north London, which is also home to his football club, Arsenal, where he holds a season ticket.

Peter, how did you first come to hear about Crowdsurfer?

Mustard Seed introduced me to Emily Mackay, Crowdsurfer’s CEO. I immediately knew she was bright and driven and that the company was full of smart people.

Have you always had an interest in crowd finance?

I’ve always been intrigued by trying to solve the fragmentation in crowdfunding. I think it’s a huge challenge, and there is a huge prize for the company that overcomes that challenge.

And that led you to choose to invest in Crowdsurfer?

Yes, that and the fact that I always like to invest in companies that offer a distinct proposition, with a clear point of differentiation. I think Crowdsurfer are undertaking something truly unique with their mission to provide transparency through data for the entire crowd finance community. That really stood out. Having been involved with the company for a short time, I see great things ahead for both Crowdsurfer and the sector as a whole.

As an academic and a market participant with experience in developed and emerging markets, do you have any concerns about the development of crowd finance?

One thing we still don’t really know is what happens when things go wrong in crowd finance. We are yet to see the effects of a downward economic cycle. Will the business model cope? Is there sufficient government policy and regulation in place? Only time will tell, but with the right approach to regulation and oversight, and with increased transparency delivered by companies like Crowdsurfer, I expect the industry to flourish.

Where do you see opportunities?

Crowd finance in developing countries and emerging economies offers huge opportunities, but also pitfalls. Microfinance is a good example – we need to understand the risks involved on both sides of the balance sheet. As with any new market, we must be careful. Inevitably, there are some ‘suspect’ organisations and issues to overcome in the sector.

I see crowd finance as part of the ongoing disintermediation of capital markets, with technology replacing more traditional forms of workflow. In the wake of the financial crisis, some areas of traditional finance are no longer working as well as they once did, and crowd finance products can offer a timely, viable and cost effective alternative. For example, crowd finance could solve the problems faced by smaller firms seeking to raise capital via equity and debt financing.

Aside from your work with Mustard Seed and Crowdsurfer, what keeps you occupied?

A whole host of projects and roles, a lot of them in fintech, on both sides of the Atlantic.

You’re a Senior Fellow at Harvard Kennedy School. That must be a great honour.

It was a privilege to be invited by Larry Summers (President Emeritus of Harvard) to take up that position. Harvard is an inspiring place, with very bright people collaborating in an enormously stimulating environment. At Harvard, I’m able to bring ‘real world’ experience to bear in an academic environment, in a reversal of how I began my career. Too often there’s a disconnect between academics and market practitioners. I hope my expertise can bridge that gap.

What’s the focus of your work at Harvard?

Projects with a real-world impact, such the economics of global health, market regulation, and financial crime. I’m interested in combining academic work with policy. A recent example is a project I completed – titled Making it Harder for the Bad Guys – that outlined a strategy to remove high denomination bank notes from the financial system, in order to disrupt the perpetrators of terrorism, tax evasion and financial crime.

You’ve had a long, distinguished career, Peter. What was the plan when starting out?

I must admit, I never really had a plan! After studying at Oxford I started at the Foreign Office, but soon realised I had a better grasp of numbers than languages, so thought it best to move into business. So, I did a Masters in Public Administration at Harvard. I was tempted to go on and do a PhD, but thought it was time to get a job. I started at McKinsey and ended up as a Senior Partner, before moving to Standard Chartered to become Group Finance Director in 2002. Little of this was planned. My strategy throughout has been to take advantage of opportunities as they come along.

Your background and career has been really varied, combining academia with practical real world applications. How has this influenced your worldview today?

I’ve always had a fascination for doing and learning as many different things as possible. Good people and good leaders in organisations, regardless of sector or size, should be as rounded and multi-faceted as possible. I also moved around a lot as a child, living in Malaysia, Singapore and Canada. I think the variety of my childhood and education has really helped me along the way.

It sounds like you don’t have much time away from work. What do you do to relax?

Well, I love to ski when I can, but my home life blurs with my work life. For example, I’m a bit involved in my wife’s independent bookshop, Ink@84, in Highbury, North London. Last year we created an independent film club linked to the bookshop, calledFilm@84, funded by a Kickstarter campaign. It was great to get first-hand experience of crowd funding from the perspective of a small company.

Further Reading: Articles written by Peter Sands

Making it Harder for the Bad Guys: The Case for Eliminating High Denomination Notes

Making the Positive case for Immigration to the UK

Assessing the Economic Risks of Pandemics

The Neglected Dimension of Global Security – A Framework for countering Infectious Disease Threats

Is Banking heading for its Spotify Moment

Rethinking Operational Risk Capital Requirements