Craig Guillot
Craig Guillot Jul 30, 2018

Welcome to the U.S. of I: American banks and the unstoppable state of innovation

As U.S. banks and financial services companies seek new innovations to enhance their products and services, many are looking to the global market for inspiration.

The 2018 BAI Global Innovation Awards recognize industry leaders and showcase how financial services leaders deliver new value to employees and customers. The innovations presented by this year’s finalists run the gamut from an artificial intelligence-enabled consumer application, to a maternity program for bank workers, to a cross-border credit score platform.

Many of the most successful U.S. innovators take their cues from abroad, says Guillermo Fabian Tolosa, CIO of ICBC Argentina and Innovation Circle judge. The examples range from the universal adoption of mobile payments in China (the world headquarters of ICBC) to open banking in Europe.

“Nowadays it is important for any bank around the world, not only U.S. banks, to have a global perspective in innovation because the new competitors—‘bigtechs’ and fintechs—are born and grow very fast globally,” Tolosa says.

Banks are also embracing new ways to tap their data through machine learning driven by predictive analytics, says Steve Monaghan, Chairman and CEO of GenLife and an Innovation Circle judge. The finalists applied technology and innovation to real customer problems rather than simply for the sake of it.

“In the next 10years we’ll see intelligence become pervasive, with customers having far greater control over their data through blockchain and realizing their financial potential through intelligent agents,” Monaghan says. “This will make banking universal.”

Bank of America: Erica speaks volumes

A finalist in the Innovation in Customer Experience category, Bank of America recently surpassed one million users on Erica, the first widely-available virtual assistant in financial services. Leveraging artificial intelligence, Erica uses natural language to serve customers, who easily interact with her by type, text or talk. Customers can also search for narrowly-defined transactions, such as purchases from a certain retailer or above a certain dollar amount.

“Listening to feedback we asked how we could personalize it at scale and deliver to our 65 million customers in a way that feels personalized to them,” says Michelle Moore, Bank of America’s head of digital banking.

And while Bank of America serves the U.S. market, its teams often look globally for innovation clues. “We pay attention to trends everywhere because there’s always an opportunity to learn something,” says Moore, who will be speaking at BAI Beacon. “You want to be aware of what’s going on regardless of where it’s happening.”

The birth of Fifth Third’s Maternity Concierge

Financial service organizations are also innovating to serve their own employees. In a tight U.S. job market, banks feel more pressure than ever to attract top talent. Workaholic cultures are giving way to environments that honor a work-life balance, and as an innovative measure for pregnant employees and working mothers, Fifth Third Bank developed the Maternity Concierge. The program earned Fifth Third finalist status in Human Capital Innovation.

Chief Administrative Officer Teresa Tanner listened to employees and found that new mothers also needed post-maternity leave support on returning to work. Tanner noted women in senior leadership positions who took maternity leave were more than twice as likely to leave the company within the next year. “If you want different results, you need to do something different,” Tanner says. “The conversation must move beyond maternity leave.”

Fifth Third Bank interviewed pregnant women and new moms to better understand their needs and created a personalized onboarding program with two full-time concierge members and a steering committee to meet monthly. The program includes free breast milk shipping during business travel, an additional four weeks paid time off, grocery shopping assistance and research into day care options. More than 300 women have used the program since its February 2017 launch.

“I couldn’t continue to work without the Maternity Concierge program,” says Fifth Third branch manager Kate Ockerman. “With 10-month-old twins and a 2-year-old, I’m always juggling. This lets me concentrate on work when I’m at work and home when I’m at home,”

Nova Credit: Reports without borders

Innovation of course knows no global boundaries but it may surprise you to learn that consumers on the move are driving a new wave of breakthroughs to meet their demands for seamless international banking.

In the U.S., first- and second-generation immigrants from the UK, Russia and the Netherlands founded Nova Credit in 2016 as the world’s first cross-border consumer reporting agency. The company is a Global Innovation Award finalist for Disruptive Innovation in Financial Services. The founders sought to build a solution for immigrants they say are often “shut out” of financial systems in their newly adopted countries.

Even with credit histories in their home countries, many must start from scratch in the U.S. to build credit through Experian, TransUnion and Equifax. Nova sources data from the world’s top credit bureaus to offer a verifiable, transparent credit system that’s portable across international boundaries. 

“As technology-based mobility and capital flows continue to progress, large global opportunities for U.S. companies remain to be seized,” says Collin Galster, Nova’s head of financial services and based in San Francisco.

Nova Credit sets an example for the investment in technologies that make data more “bank-ready” and convert it into competitive advantage. Galster adds that banks must also find ways to accelerate their internal processes to integrate new services for an increasingly global base.

“As the majority of U.S. population growth stems from immigration, banks have to increasingly find solutions around financial inclusion,” Galster says. The endgame is “to build a world where we can service all financial services needs across populations.”

Which, if you think about it, is an appropriate bellwether for global innovation as a whole.

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Craig Guillot is a business writer who specializes in retail and finance. His work has appeared in such publications as the Wall Street Journal, CNBC.com, Bankrate.com and Better Investing.

Learn more about the BAI Global Innovation Awards and our finalists. 

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