Marshall Lux joins NGP Capital’s Advisor group to serve our US portfolio companies. We interviewed him about how 5G and connectivity technologies enable operational efficiencies in different verticals, with a special focus on the financial industry.
Over the past few years, NGP Capital has been carefully selecting a group of external advisors to work with our portfolio companies on specific projects ranging from operations to strategy to marketing and more. Marshall Lux has been a financial services consultant and practitioner for over 35 years, as a senior partner at McKinsey and most recently, at BCG, where he continues to be an active advisor. He has also served as Chief Risk Officer at Chase, where he worked with consumer financial products.
Currently based in NYC, Marshall teaches, writes, serves on a number of boards, and advises financial technology companies. He is already working with portfolio companies SecurityScorecard and Workfusion. In addition to the work with our portfolio, Marshall will help NGP Capital explore investment opportunities in technologies that enable operational disruption, with particular emphasis on the digitalization of financial services. He will explore new technologies that can potentially revolutionize what can be done in a bank, insurance company, or trading house.
Marshall believes that we are relatively early on in the digitalization of financial services.
“The potential is huge, and there are a lot of people getting into it, but most only very lightly. Part of the problem, and something I can help with, is translating the issues of a small FinTech company to, say, a large bank with 600K people.“
Over the years, Marshall has developed a reputation in the VC community as someone who can accelerate growth in portfolio companies, which fits very well with NGP Capital’s investment model.
“One of things that interested me about NGP Capital is the concentration on themes as opposed to just looking at individual technologies or markets. I think that’s a very interesting way to find opportunities and think about them, putting them into a larger context.”
Marshall recognizes that current COVID-19 pandemic and associated economic downturn are causing a whole new set of challenges for growth-stage financial services companies.
“We’re on the cusp of a financial services revolution. I do expect that things will change. For example, how many people will go back into bank branches? What will the role of bank branches be, going forward? People are being routed to online channels for everything, and they are getting used to it. There will probably be no coming back from that. The COVID-19 pandemic has basically accelerated the move toward digitalization – it’s on the same path it was on before, just happening faster because consumers have accepted it and banks can afford it.”
"The COVID-19 pandemic has basically accelerated the move toward digitalization – it’s on the same path it was on before, just happening faster because consumers have accepted it and banks can afford it.”
Marshall thinks that, compared to some other industries, the effects of the pandemic on financial services will be relatively subtle, and that there are a number of opportunities for FinTech companies to have a positive impact.
“The pandemic has exposed a great deal of social inequality, and FinTech companies are out there focusing on newly exposed needs in a number of areas – the subprime market, poor neighborhoods, rural areas, students, the military, immigrants – for less expensive services, better algorithms, and better ways of working. The good news is that FinTech companies are attacking every aspect of financial services, working to bring the world closer together.”
Marshall serves on the boards of financial and information technology companies, as well as advising private equity groups and not-for-profits. He believes that networking – spending quality time talking to CEOs, founders, and the lions of the industry – is the best way to learn what’s really going on in an industry.
“There are probably 10,000 articles out there right now about banking and digitalization, and yes, they can help you learn about the markets and technologies. But if you really want to get to the cutting edge, you need to make friends in the industry and spend time talking to the experts in the field and the CEOs and founders on the front lines. I pride myself on having a very broad network of contacts, and I never say no to meeting and talking with someone new. You never know who may have the next unique idea or a new take on a problem that revolutionizes the way we do business.”
We welcome Marshall to our global NGP Capital team and look forward to the work he will do, both with our investing team and our portfolio companies.