Banks Must Push the Innovation Envelope
There are several good reasons why banking innovation lags the drive and imagination of other industries. I won't go into those. Banking innovation has always operated within a restricted area, but of late, it has also become less remarkable. With most banks having access to similar technology, creative ideas are easily copied, leaving very little advantage for the first mover. The result is uniform, incremental and contemporaneous change across the industry.
So, my question is, is this really innovation? When was the last time we saw something which revolutionised the face of the industry or at least set a bank apart?
Thankfully, I'm not the only one asking these questions. Lately, there is evidence of some banks taking bold steps towards 'true' innovation. Some quick examples - Amex's tie up with Zynga allowing card reward points to be exchanged for virtual goods in the latter's online games and Standard Chartered Bank's eight minute service pledge for in-branch transactions, which if broken, yields a contribution from the Bank to charity. These banks are breaking the traditional boundaries of innovation which was limited to channels or products, to bring creative ideas to the customer domain. I am optimistic that this is only the beginning.
So, what could other banks still trapped within the old innovation framework do to expand their horizons?
• Enjoy being challenged. Create a cultural shift of encouraging rather than resisting change and new ideas.
• Pursue diversity. Hiring people with different skills and backgrounds creates variety in thinking.
• Strike a theme. Know where you will innovate and where you will not. Beware of herd mentality.
• Keep it simple, so that everyone can understand and get involved.
• Be prepared to fail, and have a Plan B in place.
