Innovation is bigger than just technology writes Carol Realini
It is bigger than just one bank.
Innovation is about reinventing – business models, products, and services.
In banking, just like in Apple’s world, transformative technology will come from multiple actors working in a collaborative ecosystem to deliver value to the customers.
Banking needs to shift from toxic and protective, to open and collaborative.
The design of how banking is done needs to change to promote innovation, not inhibit it.
Technology is changing rapidly, and it is getting more prolific and more powerful.
Banks need to keep up and lead.
Steve Jobs imagined a world where all your personal music was available to the customer on a simple, beautiful personal device.
He moved mountains in the digital content and mobile world to deliver on that vision. He was ruthless in his commitment to product excellence and delighting customers.
At the same time he understood, probably through his big failure in the PC era, that the ultimate success of Apple would require a larger ecosystem. So he worked hard to design, evangelize and perfect that ecosystem. His legacy is a world where not only digital music, but almost any application you can think of, can be downloaded to a connected Apple device. Now others are following his lead. He changed the world – and we are all better for it.
For banks to do this, they have to have a culture of Steve Jobs-like innovation within the banking industry.
Banks spend too much on proprietary infrastructure that is increasingly rigid.
And yet some simple but powerful opportunities, like simpler account structures or small depositor products, are left untouched.
In 2011 American Banker gave Jane Thompson, the recently retired head of financial product at Wal-Mart, the award for most innovative banker. Think about it: despite tens of thousands of talented people working in America’s vast banking industry, American Banker, that stalwart voice of big banking, had to look to a consumer retail chain for leadership in disruptive innovation.[i] This should be a wake-up call to all the superbanks that their bloated innovation budgets are not translating into value for the average customer.
The shift to consumer-centric innovation is essential to lift banks from their rapid decline. Talented people won’t continue to work for banks if the banks don’t encourage change.
And application companies won’t bet their future partnerships with banks if the banks don’t stop inhibiting innovators and start supporting them.
Carol Realini is the author of BankRUPT.
And for more on applying innovation to banking and indeed to conservative businesses everywhere, check out Kosta Peric's thoughts.
[i] Aspan, Maria (2011) Banking the Unbanked, Looking for Company [Online] Available from: http://www.americanbanker.com/specialreports/176_13/best-in-banking-innovator-of-the-year-thompson-1044486-1.html [Accessed, 9 March 2012]