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Keep Calm and Innovate

Friday’s blog was all about bank innovation labs and structures. A serious and committed undertaking this time around, with many experimentations and proofs of concept taking place, especially around blockchain. Great.

The thing is that as I walk into these hallowed places of bank sponsored creation, it feels like a very formal version of a FinTech start-up. The Innovation Team are allowed to dress down every day, and wear jeans and sneakers. The Innovation Team are allowed to tweet and facebook whilst their colleagues are all firewalled out. The Innovation Team get to hang with the hipsters to soak up their vibes and then bring those creative juices into the bank and share.

I’m not criticising this – it’s pretty cool to be honest – but I do get a feeling a little like the Labs in MI5 in the Bond film. Bond deals with serious stuff like killing people but whenever he goes and sees Q, he finds this quirky space full of mad professors doing fun things that help you kill more effectively.


This is the challenge for any bank as articulated well by our friend Kosta Peric who wrote the Castle and the Sandbox whilst running Innotribe at SWIFT. Banks love the idea of innovation but struggle with the link between the innovations and the operations. To get over the Castle wall is hard, and this is where I see a shift that has to take place and that I’ve blogged about many times.

The Innovation Wall is the block between the business and the future. The Innovation Wall is the bank’s antibodies desperately trying to obliterate the innovation virus. The innovation virus creates risk and banks do not want risk. Hence why they follow rather than lead.

There’s nothing wrong with following except that the open sourcing of finance demands more change than a project. Banks that are delegating their FinTech innovation to the Digital Team are going to fail. This is because the Innovation Team with their sneakers and beards are going to get pissed off fast. If all you ever do is come up with great ideas that never get implemented, it becomes disappointing. If all you ever do is show your boss the next generation bank to receive an Oh yes, very good, keep calm and innovated it becomes disillusioning. If all you ever do is generate discussion, it becomes desperate.

Innovation and transformation are at the heart of banking today. Banks have to reimagine themselves from proprietary controllers of the end-to-end structure of manufacturing, processing and delivery to ones that are open sourced and able to integrate anywhere with anyone at anytime. The Open Sourced Bank offers all processing and product through APIs, apps and analytics and can adapt and be agile fast through cloud and blockchain. The Open Sourced Bank is the ValueWeb integrator, taking all pieces of product and processing and integrating and aggregating to give the ultimate user experience.

These banks need leadership to adapt from offices and branches to software and servers. They need leadership to rebuild the bank from oppressing paper to processing data. This is not a project that can be delegated to a function, but a transformation that needs to be led from the top. That is why the Innovation Wall will stop many banks from achieving their digital dreams, because the leaders need to jump over the wall first to prove that there are no barriers to change. Most leaders are quite comfortable sitting behind the wall. Hence, they like the fact that they have their Lab with Q, sitting in the basement experimenting but lo betide the experimentation team messing with the core business operations. Let’s just keep this behind the Wall OK?

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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