Incremental Banking Innovation: Taking Small Steps towards Sustainability
There’s no reason to change a winning formula. Incremental innovation can be quite effective in altering products, processes and channels to cater to environmental and market demands as well as support internal objectives. For instance, some banks have responded to increased cost consciousness among their customers by launching incremental innovation to bring down user charges. At the same time, others have innovated on their mortgage products, making them simpler and more transparent in order to comply with regulatory mandates as well as restore consumer trust. Direct Banking, which until now was an incremental channel innovation, is becoming pivotal to market entry strategy.
I am convinced, innovation must enable banks to become more agile and efficient, while enhancing their potential to grow, manage diversity and create value for stakeholders. A key aspect of incremental innovation is that banks powered by modern core systems can implement it quickly, at relatively low cost, with a clear line of sight to future return on investment. This is the time to push home that advantage.
Comments
I hope you are not suggesting that Banks go down the route of 'continuous improvement' to deliver incremental, sustainable outcomes. This might work for 'follower' banks but if a bank wants to create and manage an 'industry control point' then it still needs to manage disruptive innovation while still balancing sustainability.
Posted by: GoSo | October 28, 2009 11:37 AM
Thanks GoSO, for your comment!
I believe this is not an ‘either-or’ situation. While all banks cannot be ‘disruptive in innovation’, it can work to the bank’s advantage to develop an innovation culture within the organization, by focusing on incremental innovation that forms a launch pad for bigger innovation. It could pave the path for banks to march onwards and progress from being followers to achieving leadership stature. There is merit in investing in and developing the innovation culture until it becomes a part of the organization DNA, as in 3M, Apple or Google. Once there, even incremental innovation can be ground-breaking from a utilization point of view.
Posted by: Rajashekara V Maiya | October 29, 2009 06:13 AM
Agree with you M. The real challenge is how to motivate employees - all ranks - to make creative thinking part and parcel of their everyday work. I am a strong believer in the idea that if a Bank or for that matter any company can create the environment for creative thinking it will bring out the best in many. I still remember the talk by Semper and his 7-day weekend approach. While a bit extreme in his approach I do believe he got the idea right.
Posted by: GoSo | November 1, 2009 02:36 PM
There certainly is the need to ‘create a platform and a forum’ for creative thinking and nurture an appropriate culture in the organization that seeks to thrive on innovation. The innovation culture itself must be planned and implemented in an organized manner. There must be optional or compulsory contribution by each and every employee in their respective work area on matters like how to improve productivity, efficiency, how to grow (organically or in-organically), new product launches, how to beat competition and so on. A reward and recognition mechanism, put in place, will make sure that contributions are properly recognized. In many cases, it can also be integral to the KRA of specific roles and groups within the organization to ensure that focus and commitment is sustained from a long-term perspective.
Posted by: Rajashekara V Maiya | November 3, 2009 03:28 AM