Innovation in Financial Services alive and kicking
The Dutch Accenture Innovation Awards, Amsterdam at the Congress centre RAI, November 2011. 5 sectors – consumers products & Agri, Health & Public services, Energy, Media Communication High tech and last but not least Finance – were challenged to come up with innovative projects. In total Accenture received more than 1200 projects! Let us take a look at Finance. For me an exciting universe even now in these stormy times where sector, resources, strategies and policies are questioned.
‘And the winner is….’, I love events when they can surprise me. And this event did! Oh yes. The sector is alive. When it comes to numbers of submitted projects a bit less alive than the others sectors, but still! 151 contributions. Observation: 20% of the projects came from big banks/Insurance Companies. 80% from small companies and start-ups. Surprising? No I don’t think so. Big financial companies are still lacking a bit openness and flexibility. Innovation is still a bit contradictory to the nature of the business. But things are changing. A good example are ING Netherlands (won the public Prize) and AEGON (one of the 7 award nominees).
Innovation. What’s in a word? I think that one of the two key elements for success in innovation is (1) to start with a good and clear definition of what innovation is standing for. Innovation does appear in different shapes and forms. Sometimes it leads to confusing and to misunderstanding. And that is why sometimes innovative ideas disappear, are badly managed or overruled. When it is clear, to all, what the word ‘innovation’ includes, it will facilitate innovation processes and management. Problem is that there is No correct univocal and clear definition. It is a multi-dimensional challenge. For some Innovation is making things better and about ways to improve business. For others (f.i. Wouter Koetzier, Accenture) innovation is about ‘Game changers’, looking to projects, processes, problems from a different angle…others, like Boris Veldhuijzen van Zanten (serial ‘successful’ entrepreneur) do refer to innovation as the capability to take risk, to try, to blunder… Innovation is a creative way to deal with crises and problems… I like them all because they are all right and all are compatible. In an attempt to find the ultimate definition let me introduce this modest one: Innovation is a multi layered concept to be shaped by the company that wants to improve its own reality in a fundamental and sustainable way. In other words, yes innovation is about ‘change to make things better’. And (2) next to do is to answer the following question “For whom, who will be better off with that innovative project…? The company, the employee, the customer, the stakeholders…. I have to say, of all projects presented at the Accenture event, the answer was not always clear to me.
But back to the projects. What was remarkable to me? Lot of innovations were inspired by or related to investments, stock & share handling. A lot of concepts were technology or process driven. Little were really consumer centric. A few were really beyond imagination. Barend van Doorn (Accenture) gave an overview of the most remarkable recurring themes across the innovation concepts. Let’s take look and reflect a little.
(1)Insight & transparency. More and more the market is looking for open, more tangible and transparent business models (in terms costing, processes, benchmarks, …). Quite some projects are proof of this trend; f.i. Ophen (The award winner) and tom (one of the seven award nominees). Ophen is an online asset management tool ‘at a very low cost, with a high degree of transparency’. ‘tom’ is an initiative that enables best execution of retail transactions for its clients”.
(2) Speed and Convenience. Besides ING, Moneybird is a good example of how convenience and speed are combined within one platform. Banks and insurance companies are really challenged on this aspect and are still underperforming. As ‘the ease to open an account in 20 minutes’ is perceived as thé innovation 2011 by the Public… it says enough no?
(3) Mobile-Mobile, Mobile… a big part of the innovation concepts were mobile apps or mobile app related. One of my favorites is the AEGON Mobile app. Why? Those are really smart apps (from ‘checking the social and financial value of a neighborhood’… to ‘just take a picture of the invoice to have money transferred to your account within 24h’). And I must confess, I like the idea very much as it was the only one who very active referred to the customer. Those apps are built upon consumer generated insights. Inspiration was found in active discussion with the customers.
(4) Social media and social platforms are becoming key in the new finance era. Crowd funding, niche fundraising… are becoming more and more prominent. An important signal to the market, as those initiatives also can/will result in the cutting out of the middleman. I embrace those innovations and do hope they give the energy and inspiration to the big banks to think in the same way. In the Netherlands but also across the world quite some examples are available (http://www.geldvoorelkaar.nl, http://www.voordekunst.nl, http://peerbackers.com, http://www.crowdfunder.co.uk…). In the competition share2start was an outstanding concept that ended up in the Top 7. The innovation of share2start is twofold; it has a very specific focus upon innovative sustainable projects and it not only (help) to finance these projects. It also supports and guides the innovate entrepreneurs from the very beginning to the conception phase (partners to work with, communication and PR…). And good news for those who want to earn their place in heaven, already you can be a (business) Angel from 25 euros J
It is important to underline and to not forget that these trends are the result of what the customer of the 21th century is all about. The customer today is open, constructive, connected, savvy and empowered. He wants to go your way, he wants to support you. But he does not take things for granted anymore. ‘Top-down thinking’ is passé. Just ‘Saying’ is not enough. Co-create, Interact and Proof, are three of the most crucial challenges the Finance sector is facing for upcoming years.
To (almost) end, I would like to talk about Cloud4Banking – Jaccoo (also nominated for the award). That is, to me, a real Cool innovation. Oh yes, Coolness and Finance can fit. JACCOO is a cloud based platform for cash management. It is virtual paybank, across banks, around the globe. It is clear that usage of cloud computing for these purposes does have enormous advantages. But at the other hand it is really all in the virtual intangible world. Wondering if the sector and the customer are ready to take such a huge step.
Remember I said in the beginning, I like events that are capable to surprise me or to excite me. As an InSites dude and empowered consumer ambassador, as believer in the power of conversations, it was heartwarming to see that some innovation concepts are heading towards the active participation of the crowd. But to my feeling, finance is still too much focused on process improvement only. Technology driven innovation is important but it is crucial to include and to engage the customer to the fullest because servicing him is our ultimate goal. We are lost with our customers! Engagement is about involvement. Involvement results in a higher degree of brand identification and affinity. And that’s were it finally is all about.
Good to know. InSites Consulting is, beside NYSE Euronext, active partner of Accenture for the BeLuX Financial services Innovation Awards 2012. In February 2012 the winner will be announced and celebrated. Find out more or keep updated via the award website.