Strategy

3 Ways to Drive Finance Innovation in 2019


by Ross Feldman

Emerging technologies will drive solutions that go to the heart of some of the biggest challenges facing organizations today. But where do companies wanting to implement these solutions even begin?

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There’s a popular clich√© I hear a lot in business, which states that life’s not about ideas, but about making ideas happen. When I think about innovation in business – and when I seek to inspire my team to solve challenges – I often invoke that saying to drive home the point that we can ideate, and brainstorm solutions and initiatives, but it means nothing if we don’t also focus on bringing these ideas to life.

To me, innovation means being able to think creatively, brainstorm solutions, and develop the tactical development and implementation of those solutions. Aside from a pep talk, there are three main areas that financial organizations need to focus on in 2019 when looking to drive innovation and the execution of ideas. 

1. Focus on the customer 

When thinking about innovation, it's about being able to be relevant in customer's lives. What does the customer need and what are some of their pain points? Often, the key is solving those pain points before the customer even realizes there's a stumbling block – not waiting for them to raise a hand and say they need something or report a problem – thereby improving their experience so that's it's positive right out of the gate with no hiccups. The focus should be on perpetual motion – always trying to advance – and constantly striving to improve your relationship with your customer, making things better, more innovative, more customer-centric, more transactional, more economical, and more relevant for them.

2. Partner with innovators 

The financial services industry is already quite innovative. It's one of the biggest users of technology, consulting, and outsourcing for specific expertise. However, one thing that can slow innovation is the norms of the industry demand caution. Bankers are trained to ask for the business case, the model, and a risk assessment, etc. That's all completely appropriate because they're protecting customers, the institution, reputation, and shareholders – which is critically important. But sometimes that means that solutions developed in-house take a long time because of those checks and balances. So, doing it in-house may not always be the most effective way to go about it. While your organization excels at serving customers with traditional financial products and services, you might be best served by partnering with a best-of-breed innovator because they do X, Y, or Z exceptionally well. 

When you pair that with your spirit of innovation - your desire to be an emerging player - you bolt that on to your framework of doing things in a very disciplined, rigorous, safe, and secure manner, and you end up with a very good outcome. If you find and invest in the right emergent leaders, you can get yourself to the market much faster.

3. You don’t always need to swing for the fences 

When talking about innovation, there's often a tendency to want to find "the next big idea," but base hits are good too. Often, the biggest bang for the buck solutions are smaller ones that automate busywork, find efficiencies, and boost productivity. I call it "intrinsic innovation." It's not always about product or service innovation. Very often it's process innovation. It's like taking an out of shape body and eating better and exercising. You're doing process improvements to make the machine work better. 

One of the original benefits of mobile apps and websites – aside from improving customer choice with an omnichannel experience – was they significantly cut the number of trips to brick-and-mortar facilities and phone calls to live service representatives. Those transactions went from costing dollars to cents. In institutions with thousands - or even millions - of customers, that quickly added up to major money. It was product innovation, but also process innovation, and so a win in all check boxes.

If you take that example and look at back-office functions - analyze them for potential artificial intelligence and robotics solutions – you will find more process innovation base hits that add up to significant savings. Work like statements, mail room, and proofreading are all things that can be done faster with technology that doesn't get bored, take coffee breaks, or call in sick. How much money is lost to downtime caused by technical problems? Solutions using AI and automation fix tech problems and automatically keep everyone working smoothly. You get lower cost, more efficiency, and more productivity.

I worked for a manager once whose favorite phrase was "How might we….?" meaning how might we solve a problem we haven't realized is a problem yet. The more that kind of thinking you do, the more it becomes part of your DNA and your appetite for finding other ways to automate and save grows.

Emerging technologies and services will drive solutions that go to the heart of some of the biggest challenges facing organizations today. But what exactly are these solutions? How have they already led to bottom-line results? And where do companies wanting to implement these solutions even begin?  

As innovation and digital transformation changes – and in some cases disrupts – the financial sector, the main mission for large institutions remains the same. Reputation boils down to keeping the customer safe by preventing their money from being stolen and their data secure and private.

Customers want to be in control of their money and how they transact with the organization. They demand to be able to access everything very quickly, but in a secure way. For example, checking interest rates and their credit rating from their phone while sitting in front of a salesman trying to sell them a new car.

When brainstorming and prioritizing potential innovations, winning intuitions will focus on the customer, partner with promising startups, and consider small wins equally with the potentially big ones.

Ross Feldman, Vice President of Strategic Initiatives at CompuCom.