The banks most successful at creating break-through innovations aren’t one-shot wonders; they’re reshaping their organizations to cultivate and sustain employees and their ideas for creating new sources of revenue and customer loyalty year after year. That’s certainly been the experience of bankers whose institutions were winners in past iterations of the BAI-Infosys Finacle Global Banking Innovation Awards, which is accepting nominations for its 2015 program until April 15.
Such innovation typically involves motivating and focusing employees with the creation of innovation teams, learning centers, contests and office space dedicated to innovations that give customers access to financial products and services anytime, anywhere. There’s also a new emphasis on paying attention to customers and how they use technology in their everyday lives.
The financial services industry today “is dealing with a very informed, very connected, very sophisticated consumer,” says Vikas Gupta, the Americas chief for Infosys Finacle. “Across the globe, wherever we go, we find that customers want to deal with their financial institutions on a real-time basis. Customers have high expectations from banks and those expectations continue to rise.”
“I Have an Idea”
Istanbul, Turkey-based DenizBank A.S., the 2014 winner of the “Most Innovative Bank of the Year” award, adopted “Digital Deniz” as its tagline at its annual strategy meeting last year to emphasize its commitment to technology. Two years earlier, CEO Hakan Ates and the bank’s board had agreed that “banking and technology can no longer be thought of separately,” says Gurhan Cam, senior vice president of the Digital Generation Banking Group.
The bank established that group as a separate business unit to focus efforts on retail and other business lines while encouraging employees to suggest innovations with a Web platform called “I have an idea!” The board informs upper management about emerging digital trends with an annual meeting called the “Digital Camp;” employees are taught about technology in banking at the bank’s “Deniz Academy.” Before launching products and services, members of the digital banking team travel to Silicon Valley and seek input from startup firms, according to Cam.
Deniz Bank’s innovations include the fastPay mobile wallet that enables users (including non-customers) to transfer money between mobile phones, withdraw cash from ATMs without a card and make purchases in stores.
“The Innovative Hive” is the source of fresh ideas from employees of Sydney, Australia-based St. George Bank. Its parent company, Westpac Group, opened the $4 million innovation center in the bank’s old headquarters building south of Sydney last year to test new products. St. George Bank’s MoneyMeter, an application that allows customers to view their account balances on a smartphone, was a finalist in the 2013 “Product and Service Innovation” category.
“Often, the vision starts with the CEO and chief information officer and is then shared with our employees,” says Travis Tyler, head of mobile at St. George Bank. A team of innovators assesses the feasibility of ideas and then tests them in the market. “We do not shy away from those innovations that don’t succeed and we ensure that we learn quickly and adapt in our next iteration.”
Hana Bank kicked off the year with Chairman Kim Jung-tai telling 10,000 employees that “2015 will be the year of innovation,” building upon the launch of products including Hana N Wallet, a smartphone-based e-wallet, and One Click Mortgage, an online mortgage tool, that helped the Seoul, Korea-based bank win the “Disruptive Innovation in Banking” award in 2013.
Hana Bank encourages ideas from employees with its “Innovator of the Month” contest, giving prizes in areas such as business processes and marketing. The contest has buy-in from top management, which evaluates and awards the prizes to employees, according to Simon Park, senior manager in the bank’s Retail Business Department. Top management also supports “Hana Innovator,” an informal group of 120 employee volunteers that organizes innovation festivals and camps for co-workers.
Cincinnati-based Fifth Third Bancorp fulfilled its corporate pledge to be “the curious bank” in creating the Homeowner Reemployment Program, the 2014 award winner in the “Innovation in Societal and Community Impact” category. After bank employees noticed “many of our mortgage customers falling behind on their mortgages because of job loss, we decided that instead of modifying their loan terms, we would tackle the actual issue and help them get reemployed,” says Larry Magnesen, senior vice president and director of corporate communications.
“We are not afraid to pilot programs and to commit to those that are working,” says Magnesen, explaining that the Homeowner Reemployment Program started with a pilot program in 2012 that found new jobs for four in 10 participants within six months. FifthThird partners on the program with NextJob, a nationwide reemployment services provider, in providing personalized job coaching, online training and weekly webinars.
Alior Bank S.A. of Warsaw, Poland, was a 2013 finalist in the “Channel Innovation” category with an online process that enables customers to make purchases, apply for installment credit to pay for them and receive a decision and funds within 90 seconds. The speed of those transactions illustrates the “start-up spirit” of the Internet bank organized six years ago, says Katarzyna Rybicka, head of the strategic projects department.
She says that CEO Wojciech Sobieraj holds impromptu meetings with employees to talk about technology and its impact on banking. Members of the innovation team help project leaders from the formation of ideas to market entry. “New ideas are collected and reviewed quickly, procedures are limited, cross-department teams are formed offhand and time to market (for new products and services) is usually extremely short,” says Rybicka.
At Tatra banka S.A. of Bratislava, Slovakia, innovation originates from employees using existing technology who see ways to improve products and services for themselves and customers. “There are no specific innovation teams,” says Marina Masarova, a bank spokeswoman. “Each employee is supported to come up with an innovative service, process, product or feature.”
As an example, Tatra banka’s Voice Biometrics, a 2014 finalist in the “Channel Innovation” category, saved time for both employees and customers by reducing from 90 to 30 seconds the authentication and verification of customers calling the contact center. “There is a client in the center of all of our efforts,” Masarova says. “We are not developing innovations just to be innovative.”
Mr. Burritt is a contributing writer to BAI Banking Strategies based in Greensboro, N.C.