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It ain’t what you do

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I was asked at a conference the other day: “so what do you think about a banks’ Innovation Department?”

The question threw me a little, so I asked what they meant.

“Well, do you think banks should have an Innovation Division?”

I replied that divisions divide, and that innovation should be encouraged everywhere.

“Ah, so you think innovation should be more of a cultural thing then?”

At this point, I wondered where the conversation was going.

“What about Customer Experience?” they continued.

“What about it?” I replied.

“Well, do you think a bank should have a Customer Experience Division to focus on the customer experience?”

The conversation was starting to get painful.

“No”, I said. “Everyone works for the customer. That’s who pays everyone’s salaries. So, everyone should have the customer in mind.”

“Ah, so you think the Customer Experience thing is part of a bank’s culture then”, they said.

At this point, the pontificator in me came out.

“Look”, I said. “If you go to any FinTech start-up they don’t even think about these questions. They just get on and do it. The focus on customer is inbuilt into every new joiner of the firm. The focus on getting things better through constant innovation is inbuilt into every new joiner. They just think that way.”

“Interesting”, my interrogator said. And then thought about it a while, before coming back with: “so we want to turn our bank into a 120,000 people start-up. How do we do that?”

I smiled inwardly at the idea of a large old bank with 120,000 people being a start-up.

“Where did you get the idea that your bank could be a 120,000 people start-up?” I asked.

“From DBS”, the Singapore bank that many discuss as a leading digital bank.

“I thought so”, I said. It’s a nice line. “The thing is that every institution has a culture created by the leadership down. It’s very hard to change a culture, and the culture of most big banks – like yours – is that this culture aims to avoid risk, drive costs to the lowest they can be, follow the competition and focus upon selling products through channels to customers.”

“OK”, my friend affirmed.

“Well, I don’t see how a bank can be a thousands of employees’ start-up when they have that ingrained culture. You cannot take risks, so you cannot innovate; you focus on the competition rather than the customer; you try to maximise the amount you take from the customer by getting them to serve themselves, and so minimise costs; and the bottom line is that you are pushing products at them through channels, rather than giving them amazing experiences through journeys.”

Oh dear, that pontification button was well pressed.

“Ah, but that’s what we are trying to change. And we thought we could do it through an innovation division partnered with a Customer Experience division”, he said. “But you’re saying that’s wrong?”

“What I’m saying is that DBS created their digital drive by walking the walk and having all the leadership team explaining one-on-one what digital means and trying to shift their mentality from 24,000 people focused on risk and product to 24,000 people focused on innovation and customer. That’s why they call themselves a 24,000-person start-up. In this context they, along with most FinTech start-ups, have a culture focused upon innovation and customer. That has to be led from the top. However, innovation around customer happens in two ways. First, from the ground up. Who knows the customer best?” I asked him.

“Urmmm, the relationship manager?” he replied.

“Yes, but not just RMs but anyone in a customer-facing role. The people engaging customers all day, every day, will know the innovation opportunities for the existing services. Then you have a second method to innovate, which is hire people to ask stupid questions.”

“What like having an innovation department?” he offered.

“Not really. It’s more the case that there are no stupid questions, just stupid answers. So, you want people who can look at the existing operations and get under the skin of them. Ideally, these people should have no idea why you do what you do the way you do it. That way they can look at what you do and the way you do it, and ask you why you do it that way.”

This is starting to sound like an old song.

“I’m not really following”, he said.

“Well, I’ll give you an example”, and thought for a minute. “There was a company I was consulting with and looking at their business processes. In one department, I noticed that a file was moved for account openings around various stages and often would sit a desk for a few days untouched. The whole onboarding process took five to ten days, with three to five of those days having the file sit doing nothing. I asked the head of the department: ‘why do files go to this desk?’ She replied that this was their foreign persons due diligence desk, after a series of dumb questions from me. I then asked why no one was at the desk. She told me that it was because they don’t take on board foreign or overseas clients anymore …”

I paused for a breath, thinking I was done.

“And …” my banking friend asked, waiting forthe punch line.

“Well, they only did things this way because they always had done things this way, even though it made no sense to do it this way anymore. It was only because no one had come in and asked the dumb question about why the file was sitting on a desk for days, that we discovered the flaw in the process.”

“Aha!” he agreed.

“So, what you’re saying is that we need to change the culture from risk and product focus to innovation and customer focus?”

“Yes”, I made clear.

“And that we need to be clear that innovation comes from the ground up, so the leaders must create an innovation culture around customer from the ground up?”

“Yes”, by Jove, I think he’s got it.

“And that we should also get people walking around asking stupid questions about why we do things the way we do it.”

“Exactly”, I beamed.

“Ye gods Chris. My bank would never allow that to happen.”

And at this point, he walked away.

Ah well, it was worth a try.

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, 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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