If you’re looking for ways to transform your institution in the coming year, there’s certainly no shortage of banking innovation ideas. Topping that list is finding creative talent that can hopefully help you develop the “next big thing” in banking that will give you a competitive edge.
Unfortunately, banks have a big hurdle to get past if they want to have any hope of attracting the kind of innovators they’re looking for – and it’s the very fact that they’re a bank.
Let’s be honest, when you think about the types of companies that exhibit revolutionary innovation, banks don’t even crack the top 25 list, let alone the top 10. It’s a serious image problem that brings to mind those Mac vs. PC ads that started in 2006 or so. Stodgy business man in a respectable grey suit standing next to a cool young techy in a hoodie and trainers – no question who is the bank in that comparison. This image problem presents a serious impediment to attracting the kind of visionary talent your institution needs in order to transform.
That being said, here are five of the most common mistakes banks make when trying to attract innovators….
- Not understanding what innovators want in a banking partner
Building a culture of innovation requires starting from the right place, namely understanding who you are and innovating within that context. All too often, banks don’t have a solid understanding of what role they want to play in their customers’ lives or what kind of innovation they’re seeking – put simply they think in terms of historical product rather than future service. Lack of vision is a basic oversight that’s a huge turn off for innovators who won’t be able to help you if you can’t provide them with even a basic roadmap of where you want to go.
- Lack of approved funding and a change mandate
While the concept of innovation might be amorphous, the output is not. As such, a potential innovator will gauge your institution’s seriousness by the size of your budget and having the appropriate approvals in place. Be forewarned, bean bag chairs and ping pong tables alone do not constitute enticement.
- Poorly designed roles and unclear processes
How banks historically function is antithetical to the business of innovation. Potential innovation partners will have little to no tolerance for huge teams of bank staff being involved, particularly if they drag out projects and complicate the process. Success will require lean teams and a very streamlined focus from assessment to rollout, with banks handling the banking side of things, leaving the innovators to the creativity.
- Aging technology that doesn’t support business goals
If your banking systems are held together with gaffer tape and the fervent prayers of IT, you stand very little chance of engaging a good innovation partner. Their job is to take your bank into the next century, not drag it into this one. Get your technological act together first and make sure you have the systems in place to support your goals.
- Unrealistic timelines that aren’t tied to customer need
Innovation doesn’t happen overnight, but it definitely has a shelf life. A true innovator will want to deliver timely solutions designed to solve your customers’ challenges. Inflating timelines and bogging processes down in heaps of red tape is a surefire way to send any good partner running for the hills. Understand the challenges of your customers and create realistic, fluff-proof timelines that will ensure you deliver the type of customer service-based solutions you want your institution to be known for.
There is no better time than now to commit to becoming a more innovative financial institution. Your customers are waiting, so you shouldn’t be. But before you seek out an innovation partner, first make sure you’re the kind of partner they’d like to work with as well.