BANKING ON SCIENCE - The life sciences industry has seen a lot of disruptions over the past few years, particularly related to acquisitions and increased regulatory scrutiny. According to a recent survey conducted by the Deloitte Center for Health Solutions, C-suite executives in the life sciences industry expect that "inflation, a choppy economy, ongoing supply chain disruptions, and competition for top talent" will shape their strategy for 2023.
However, these disruptions are also bringing an increase in start-ups involved in biotechnology, biopharmaceuticals, pharmaceuticals, medical devices, medical tools, and diagnostics. These companies must find the right kind of industry-leading banking partners to fund their endeavors, as innovations continue to fuel the industry. Here are the top three trends happening right now in life sciences banking that are setting the pace for 2023 and beyond.
1. Human Interaction
In the life sciences industry, there's no doubt that technological innovations are changing everything from how quickly you can move through R&D phases to the costs related to packaging and distributing the product. However, the need for human brainpower, creative problem solving, and networking hasn't changed. These things are just as important as they ever were in ensuring business growth and smart strategy moving forward.
That's why there are downsides for those in the life sciences when bankings close branches and replace human experts with AI chatbots. When you need a lender that knows the life sciences industry and is aware of the hurdles you jump through as a start-up innovator in the field, chatbots simply won't cut it.
There's also the difficulty that surrounds working with AI when it comes to problem solving. When there are complex situations that arise in the course of conducting day-to-day business operations, a chatbot won't be able to give you a sound solution to help you fix the issue. Nor will artificial intelligence be able to direct you on the best course of action to mitigate risk when things don't go as planned. That's why human interaction is critical for banking if you're in the life sciences.
2. Flexible Financing
Innovative start-ups and small businesses need flexible financing as they grow. In the early stages, significant capital is required for research and development while any revenue that is generated will be limited. Additionally, life sciences banking requires a unique timeline that includes regulatory approval and capital funding at the onset.
However, there are still bills to pay to keep the lights on and research going, such as employee salaries and other operational costs. This is when access to venture capital and investors will be crucial, so choosing to work with a lender who can grant you that access to different options for financing is a smart strategy.
3. Highly Specialized Advisory Services
The regulatory impact for businesses in the life sciences industry is important from day one of business operations and planning. When a service provider stays aware of these regulations and provides strategic guidance on how they will affect the bottom line of your enterprise throughout its various growth stages, you know that your company is in the right hands for financial services planning.
The Future of Life Sciences Banking
The future of banking is undoubtedly digital, but the future of life sciences banking isn't wrapped up into one word so easily. As AI-powered technology continues to disrupt the financial services industry with its virtual agents and disappearing brick-and-mortar branches, there are some services that simply can't be provided by a bot. Human experience and expertise, powered by a real network of experts and connections, will remain essential for the foreseeable future.