Innovation. Culture. Innovation Culture. Chief Innovation Officer. Officer to Chiefly Innovate. Labs, hack-athlons, incubators, accelerators, internal teams on innovation weekends and shinny furniture.
I’ve been turning a number of these topics in my head lately having heard many a bankers excitedly announce they are about to embark onto yet another “Culture Change Program” that promises to have at a minimum a shinny Innovation Lab at the end of the organisational rainbow.
The “innovation imperative” – do we really have to?
Every time a speaker at one of our FinTech conferences says “Innovation doesn’t happen once a year but is a state of mind and an iterative every day process” we cheer and re-tweet and praise the organisation they come from as if that’s news to anyone in banking. The truth is that the impulse to innovate has nothing to do with banking, in any industry from consumer goods to landscaping any professional worth their salt knows they have to “keep it moving” in terms of ideas, ethos, passion and novelty to stay ahead of the curve. We’re no different in that sense, but where we are special, is where we have to admit banking has nothing to do with the rails and everything to do with the technology and in technology the rhythm of innovation is draconic without a doubt.
If the FMCG industry gets a bit complacent on innovation and never changes the shape of a bottle or never invents a new way to make us think it doesn’t have sugar, do you think consumers will stop drinking Coke or worst off veer straight to Pepsi if they do those things instead? Unlikely. If a Barclays consumer honestly believes that HSBC gives them the kind of Sci-Fi experience mBank gives their consumers as of this month will they keep banking with Barclays? Irrational banking loyalty aside, very unlikely.
Digital banking consumers are fickle technology consumers and they expect their bank experience to give them as much value, information and excitement as their sleuth of ever changing smart phone apps. Every digital banker out there feels this instinctively, no doubt about it. It’s an instinct that is sometimes harder to explain to stuffy BoDs of big mammoth banks, yes, but the reason you see yet another Chief Innovation Officer appointed or yet another Transformation Project and yet another Accelerator and yet another Lab springing about is because the Innovate-today-or-die message is coming through.
Should Innovation be DNA or Process?
The questions that are now raising are interesting and legitimate: do we need the people in charge of just this? Do we need the shinny furniture labs? Do we get these things to showcase or to contain? Are we isolating all operational parts from getting a DNA innovation make-over by cocooning innovation in these enclaves of hip&trend?
Some banks have a Chief Innovation Officer whose only day-to-day mandate is to innovate. Some have a Chief Innovation Officer whose mandate is to make the organisation internalise innovation. Some have both. Who’s right? Why are these people even needed if we all agree on the “keep it moving” imperative?
I don’t have an answer, no one does. There are no financial organisations we can use as an example. “Here’s how Bank X has consistently been innovating and wow-ed its consumers for the past 30 years and it’s in their DNA to keep doing so” said no one, ever. We can blame it on how new it all is to us, after all, there were no channels to innovate in a few years ago, and before that banks were in the Coke business not in the technology business.
Innovate every-day or on Mondays?
We tend to believe innovation is all about creating juices flowing, new unheard-of ideas coming to us in a stroke of genius and outsmarting the competition with a shocking new move and we’re even willing to admit that these wow moments will only come to us in disciplined sit-down-and-innovate dedicated times.
It’s counterintuitive that we’d have to set aside time to have a spark of genius but we are all in banks and in FinTech running against a gruelling operational clock so it’s not strange and it’s likely a sane practice worthy of incorporating into any company’s DNA – having a certain day a week or week a month when all that’s being done, is to think out of the box before this becomes second nature.
“Why don’t you go innovate there? We have a business to run over here”
Banks are busy and most of their busy is putting out fires to keep the status quo. There’s no denying it that COOs and CTOs and other Os know full well they need to innovate and think of new business models and find the next best thing for the consumer to love them, but they are swamped just making sure the pipes are working, the data stays safe (-ish:), the Abac machines keep crunching interest rates, the Fortran systems keep plugged in, the regulation watchdog is happy enough and that the branches have pens that are well secured to the desks.
Leaving the office on a Monday to create user personas and evaluate how Bitcoin will change the world of banking sounds like new age hippie chatter they could do without and who can blame them? Which is why they still treat the Chief Innovation Officer and his team of folding bikers as the mad scientists better confined to the exposed brick lab and only really deal with their new finds when absolutely necessary. Finding a way to let innovation sip through the fabric of the organisation to the most staunch of the busy operatives is a clear challenge and why we have to hear about “culture changes”.
Maybe a position banks should look into is the Innovation Delivery Officer. Someone to take what the CIO prepared in the lab and make sure it makes sense and fits easily into the COO’s schedule and less of what the Lab guys uncovered in incubators and POCed becomes a dusty set of storyboards.
Beating the Drum
It’s no secret we are all fans of mBank. Be it their brilliance in rethinking online and mobile or their smarts about the video channel and recently the virtual branch. They’re the Apple of the banking industry. They didn’t think of having enriched, filtered through PFM transactional data that customers can find meaningful context and value in first, but they executed it better than anyone. They were not the first to think of P2P by a long mile, but theirs’ works flawlessly without the pseudo-wallet pieces other competitors are struggling to piece together.
In 2013 they won Finovate NYC with their video channel. The FinTech world was aghast. One could do banking by talking to a human from elsewhere – the Cadillac of virtual branches. Many a banks went home and begged their BODs for money to get just that. Did any of them point at Nationwide who was doing the same thing on mortgages with Cisco? No, it’s doubtful anyone much even knew that was happening, because the scope of their PR was incomparably smaller.
Modesty doesn’t have a place in innovation. The old Producers quote of “If you got it, flaunt it” should be every Innovator’s motto because the loud noise will only help consumers find and use it.
The Innovation in Banking winning formula – Draconic pace, time set aside, designated dudes and loud drums
Maybe if we did all this – recognised banking is about technology so the pace of innovation is necessarily draconic; that we need to set aside time to innovate before it will become second nature to do so; that we need to appoint people mandated to think about it, not so that we isolate the process, but so that they keep us all honest and on task; and if we recognised good innovation deserves loud drums, maybe, just maybe innovation would be closer to our DNA in digital banking than not and the consumer would have their shinny SciFi valuable changes as often as they liked.