Other parts of this series:
In my previous post, I discussed why the Digital ID Enabler role might be a good card to play for banks. This week I’ll look more closely at the Innovation Playmaker role—another of the five roles banks should consider in their efforts to remain relevant in a GAFA (Google, Apple, Facebook and Amazon) world.
Banks have a love-hate relationship with innovation. They’re not always able to understand it, make it work or draw the maximum benefit from it. But innovation is critical to the industry, even as it disrupts existing business models, and it’s significant not only to a bank but also to its customers for its transformative power.
For banks that choose to embrace the Innovation Playmaker role, a set of questions arise:
- How do I generate ideas that are truly innovative?
- When I find the next great idea, how do I make it real?
- How much should I invest in innovation?
- Who should own innovation?
- How should I structure my business to be better at innovation?
To answer these questions, banks need to recognize that innovation comes in multiple flavors—and knowing where to focus is key. Banks can choose to innovate for themselves, identifying and harnessing innovation to improve the bank’s offerings and experience for its customers.
Alternatively or in addition, they might to choose to support idea-rich individuals or small- and medium-sized businesses, through the provision of financial services and assistance, from loans to bridge the funding gap, to finance and accounting services, or with advisory and professional services. Or they might choose to innovate for the wider ecosystem, harnessing innovation that is useful and can be monetized by partners and other organizations operating in the ecosystem.
Being successful at innovation means excelling in three key areas of value:
- Executing and accelerating great ideas. Innovation initiatives that leadership can invest in and commit to, faster product development and increased speed to market, and a more engaging and interactive relationship with the customer.
- Connecting with an ecosystem. A set of partners and relationships that complement the bank’s core business, greater awareness of what is happening in the market and with competitors, and new sources of investment and talent.
- Transforming the organization and culture. A more digitally savvy leadership; increased data quality, the confidence to manage new styles of working and running digital projects, and a more agile and entrepreneurial organization.
Whichever innovation path the Innovation Playmaker chooses, different vehicles are available to help it achieve its strategic goals, including investments, R&D groups, internal innovation groups, accelerators, incubators and venture capital funds. To succeed, banks must identify and focus on their innovation goals—and they must learn to adapt to a rapidly changing landscape.