10 Big, Hairy Innovation Ideas from Bank Innovation 2014, Continued
6. The Numbers Game
Often, at an event like Bank Innovation 2014, a theme presents itself in little more than a soundbite. That soundbite for this year’s conference was: “The future of banking is transaction volume.”
This seemingly innocuous line from Kosta Peric, deputy director for financial services at the Bill & Melinda Gates Foundation, has deep-seated implications. Tweets with this line were among the most retweeted during and after the conference.
What Peric is saying is that so many of the service-related presumptions bankers have might be false, and so many of the startups that are focused on “payments” might be clued in to something many bankers are not: that commodification can only be overcome (by “overcome” I mean its revenue can be replaced) through volume, not service.
Kosta is also expressing the notion that perhaps commodification will never be counterbalanced. A commodified banking industry is a banking industry reliant on transaction value, not transaction quality. That, too, is a soundbite worth hearing.
We highlight Kosta’s observation, because it deserves deep awareness on the part of bankers. If transaction-driven banking is coming, are you prepared for it?
7. The Jack Bauer of the Bank
Much has been made about the strictures of banking organizations, how difficult it is to break down the walls of inertia. Some have suggested that it is simply impossible to truly innovate from within an existing bank. Better to look externally to a venture like Simple for your innovation.
Or you can hire Jack Bauer.
No, not the actual Jack Bauer of “24” fame, but someone who by sheer force of will can initiate change and disruption, who can take dead aim at the fixtures of banking past and attempt to “blow them up” (but, perhaps, does not also possess Bauer’s affinity for torturing suspected terrorists).
This Jack Bauer of Banking was deemed to be someone much like Michael Dooijes, who is both head of innovation at Rabobank and at the same time chief executive officer of MyOrder, a startup owned by the Dutch bank. Dooijes, who participated in a fireside chat at Bank Innovation 2014, is nothing short of a bank breaker. He will, on some occasions, operate rogue, without full knowledge of the bank’s board of directors, such as when he wanted MyOrder to build a mobile point-of-sale payments offering. Rather, than get approval for it, he had the MyOrder team simply build it. And the team did just that. He told the Rabo board about it only after the fact.
Under it all, however, Dooijes maintains a profound loyalty to the bank. He simply believes that the strictures of the bank prevent it from doing what it must, which includes opening its banking platform to allow for integration into other ventures’ offerings and reducing the bottleneck of red tape that prevents the bank from creating truly innovative products for its consumers. All it needs is a little Jack Bauer and the job will get done. In Dooijes’s case, that is what is happening at Rabobank. Perhaps you should add a Bauer to make things happen within your organization, too.
8. Culture of Incubation
Thousands of fintech startups are currently at various stages of development. Some might revolutionize banking. Many will not.
They are not enough of them.
Not only are there too few fintech startups, but the environment for breeding them is not good enough, either. What we mean by that is, the underlying infrastructure that develops fintech startups in the United States does not do a good enough job of springing forth valuable new ventures. The culprit: a culture of innovation.
Yes, there are incubators. Yes, there are accelerators. Yes, there are venture capitalists at every tier of the investment hierarchy.
But there is not the “culture of incubation” in financial services, at least not in the US. That culture appears to be more prevalent in Europe, and Europe generally still remains ahead of the US in banking innovation today.
A culture of innovation is a culture of mentorship, sharing, collaboration, and exploration. To a large degree, you do not see US bankers — or US banks, for that matter — embrace that kind of culture. There is an opportunity to do just that, and bankers should seize it.
9. The Longer Range Vision
“The visionary lies to himself, the liar only to others,” Friedrich Nietzsche once said. Those are painful words for a banking innovator.
The truth is Nietzsche is talking about another type of visionary entirely. What a banking innovator does is push to see how today’s technology will logically evolve over time. This equally painful endeavor is in too-short supply today.
Miranda Hill, vice president, product management manager, at Wells Fargo & Co., explains that product managers are too focused on “what needs to get out in two to three years.” This short-ranged vision restricts the ability to create real breakthrough innovations.
“We have to think five to six years out,” Hill said at Bank Innovation 2014. “We ask them to reimagine what banking could be like, what digital interactions could be in the store, at the ATM, etc.”
Wells Fargo actively works on its product managers to think with a longer view. They are imbued not with deadlines for deliverables, but with the opportunity to explore what is possible. Hill says the effort continues to pay off for the bank.
“There isn’t any limitation, as long as we align what we are doing with the innovation trends,” she said.
Nietzsche might even agree with that.
10. I See What You See
They aren’t called Glassholes for nothing. They walk around with those Google Glasses on like they are so important that they need to be hooked in to the internet every single second of every single day. You want to smack ‘em.
But wait one moment. Dial back the “what on earth can those be useful for” attitude. Wearables, in fact, have potentially important ramifications for banking, and they are more practical than you might have thought.
Call it the “I see what you see” use case. Google Glass and other eyeglass wearables allow for the sharing of views. If I wear Google Glass, for example, I can show you exactly what I am seeing, in real time, or I can share with you a “view” of something I want you to see. Think about the implications of this for customer service, training, and technical support, to name a few. A tech support agent can literally “show” the customer how to fix or use something, again in real time.
Brent Blum, the wearable technology practice lead at Accenture Technology Labs, explained at Bank Innovation 2014 that wearable use cases are only now starting to develop. Epson, for example, will soon release a smart glasses called the Moverio BT-200, which offers a complete overlay of imaging on top of whatever it is the user is looking at. This compares to Google Glass, which only allows for data to be seen by looking up and to the right. What additional uses for customer service or training can be developed with the smart glasses offers complete overlay of data? Could a service rep, for example, let a customer “see” a guide to using a device or technology? Could a loan customer “show” a banker his tax returns as part of an underwriting process?
Remember, wearables are remarkably new, really gaining attention just in the last year. Only the mind’s eye (sorry for the pun) will limit how wearables might be deployed for financial services.
