How does your bank innovate?


Does your bank have a sandbox?

An incubator for experiments?

A place where failure is allowed?

Then how do you innovate?

I’ve been researching several fintech and banking topics for an upcoming presentation around opportunities beyond our typical product, service, and technology stack. We’re discussing banking’s value paradigm and how we could conjure innovative paths that drive both new sources of revenue and new types of client value.

Here are some of the things I am addressing. What is banking going to look like in 2020? What will impact our traditional model of financial service delivery? What type of new services or opportunities are being delivered by alternative providers today? How could we leverage alternative financial business models and how could they impact future revenue generation?

If you had to pivot the traditional banking business model, what would that look like? What are the primary ways banking is being disrupted – what are the key areas of vulnerability?

Those sorts of things.

The topics discussed might end up ranging from simpler consumer market expressions, like the power of social data and influence on conversion across related verticals, leveraging changing demographics in our marketplace and how attitudinal shifts impact traditional product positioning, along with likely coverage of low-hanging fruit (and personal pet-peeves) around under-utilized portions of online and mobile channels (including suggestions to improve PFM, deals, mobile transaction capabilities), lost opportunities across mobile payments and proximity based rewards, and how we better leverage transactional payment ‘big data’ in new ways to offer expansive client value.

My field for topic discovery is still fairly open, so I welcome your feedback on your vision of banking’s future. Where will we derive future revenue from, and how does that revenue pie look different than today?

Or are we already firmly planted in a multibranded-multi-channel-banking world? Some great dialogue related to this comes from Chris Skinner’s the Multibranded Bank and Brett King’s the Economist Debate on Are Bank Branches Obsolete?

One topic I am digging into is really intriguing to me.

It’s leveraging on what Innotribe’s Peter Vander Auwera calls the Digital Asset Grid or DAG. DAG presents the idea that as the banking model evolves, people will look to leverage the trust they hold in financial institutions (and related infrastructures) to evolve from the protection of monetary (and in many cases physical) assets and the facilitation of payment transactions, to a much deeper level of protections for every aspect of our digital lives.

The premise is that we offer our personal (and business) information too freely – and corporations are leveraging (and making large sums of money on) the information we share. Consumers (and businesses for that matter) should have a stake in not only the protection of this shared data, but in the revenue associated with it. In essence, start valuing what is currently devalued. At the heart of the DAG concept, is the ability to better (or ideally completely) control ones digital assets.

Can a secure, bank-built network enter into this Digital Asset Grid equation and offer value to all parties? Conceptually, I find the idea fascinating, and am reviewing several paths where this makes sense from a revenue standpoint. But DAG will serious investment and a huge amount of faith to become reality.

What’s more interesting about DAG is that Innotribe plans to walk through their business model next month in Belfast.

I’ll dig into this in future posts, but for now, get familiar with this topic because I think it holds some promise for banking beyond 2020.

First, view the excellent post from Kosta Peric, Co-Founder of Innotribe, the innovation arm of Swift (Society for Worldwide Interbank Financial Telecommunication): The Castle And The Sandbox: How To Innovate In Established Companies

Next, watch the video below that includes an introduction of the concept of DAG, along with the challenge of innovation.

This video comes from the TEDxNewWallStreet-FinOlympics presentation by Peter Vander Auwera (aka @petervan), Innovation Leader at SWIFT. In this video, Peter discusses a story about babies as a metaphor for ideas, sandboxes for experimentation for financial institutions.


Here are some related posts around the concepts of innovation in banking, Digital Asset Grid, and more:

What Banks Can Learn From Silent Movies…And The Titanic

A Global Exchange For Personal Data

“Global Data Banking”: Are the Banks Really Ready?

How Banks Might Transform Their Businesses and The Future of The Internet

Who Do You Trust More with Your Data: Facebook or a Bank?

In finance, facebook is just a phase we’re going through

Banks should follow Google’s approach to privacy

Digital Asset Grid Concept

Our traditional banking model is being disrupted because of many factors, including a) key industry players underestimate (or worse taking a blind eye to) the changes to core revenue areas within the business model, b) our inflexible infrastructure makes us less able to quickly capitalize on recent shifts in consumer and business behavior (as well as the flexibility needed in this new era of changing demographics, new economic realities and regulatory environment) and c) our lack of champions make it nearly impossible to achieve scale and derive return on even the simplest of innovative applications.

In order to facilitate long term change, we need a sandbox to innovate, we need to be able to learn from failures, and take on additional risks to see which new planks with the traditional model may stick.

Take some time to watch more industry players discuss innovation, and how it’s often necessary to pivot your business model to succeed.

Scott Anthony tells #NBASG12 how companies need to confront transformation (below)



Read Reid Hoffman On PayPal’s Pivoted Path To Success Watch the video.

As always, let me know your thoughts…here or through twitter.

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