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From Discovery to Delivery: Making Product Innovation Accessible in Banking

From Discovery to Delivery: Making Product Innovation Accessible in Banking 3

From Discovery to Delivery: Making Product Innovation Accessible in Banking 4By Gareth Miller, Principal Consultant, Financial Services at Endava

The Bank of England (BoE) celebrated 25 years of independence last month. At the time, it was a bold move which gave it the power to make decisions on interest rates and control inflation free from direct Treasury intervention. The consequence has been a monumental shift across the whole sector in how money is created, transferred, stored and owned.

A major part of this has been down to the BoE having the freedom to expand its focus to fostering innovation and fintech, giving the Bank a role in the phenomenal growth in digitisation. The rise of everything from cryptocurrency to blockchain and Open Banking has opened a multitude of opportunities for businesses in banking and capital markets, and a necessity to pivot at lightning speed to market changes has now completely redefined the landscape.

Beyond developing new services and applications for new generations of customers, organisations can now deploy technology to drive differentiation and embed purpose within the company, with everything from climate finance innovation to supporting communities by bridging financial inclusion gaps.

However, the escalating war for technology talent has meant that even relatively straightforward digital upgrades can be too much to take on, let alone full product innovation. The stark need for speed and agility when implementing new products is very much at odds with capabilities and organisational decision-making frameworks – the industry can’t delay the deployment of new technologies and services, but finding the people power and clearing the path to make it happen fast enough is challenging.

Banks also need to know that investment in product innovation is approached in the right way. Many have fallen victim to delayed, fragmented, or failed transformations, and they can’t afford to follow suit. It begs the question of how you innovate: can the sector keep evolving at pace in a practical way to secure a competitive edge?

Exploring New Financial Frontiers

There isn’t a one-size-fits-all answer to product innovation. There are, however, key considerations and pragmatic approaches to delivering change. For instance, innovation should broaden horizons, offering options rather than limiting potential with ready-made solutions. Defined by the company’s unique ecosystem, change should be approached in a highly iterative, incremental nature. In doing so, the risks of failure dramatically drop and there are substantially more opportunities to course correct in line with new data or market events. Because when iterative developments succeed, companies can accrue the benefits and keep evolving to the next step of innovation.

But before change can be identified and then realised continuously, banks first need to gain a comprehensive knowledge of the innovation context, the end customer persona, their challenges and expectations. Distilling the business vision for innovation into actionable goals should be an endeavour that’s focused, value led, viewed through a product lens and designed to delight the end user – all of which can be determined through a discovery process.

Driving Differentiation with the Discovery Process

Integral to this process is bringing both technical and non-technical subject matter experts on board to open up a comprehensive view of the product vision. Stakeholders throughout the company can offer new perspectives, bring valuable learnings from their wider experience, and ask key questions to map the product to the business’s proposition and processes.

Senior leaders have to be willing to have tough, uncomfortable conversations with colleagues, partners and even customers and be brutally honest about the problems with current products and services. Taking a nonconformist attitude, the first step is identifying technologies, processes and cultures that have previously been seen as unchangeable and then understanding whether these elements need to be evolved.

Thinking holistically at the early stages of technology acceleration is key throughout deployment. Despite the fact that the product being developing is specific and focused, the data it generates needs to work for the entire firm. Innovation can’t be carried out in isolation – it has to be usable across the organisation’s departments and evolve to ensure the product’s output can be built on meaningfully. That’s because using competing technologies to view the data across the organisation means you’re missing out on its full value and power.

Evaluating the Entire Technology Estate

The discovery phase cannot stop at identifying the product vision. A deep dive into the business’s legacy estate is essential to achieving change and assuring value delivery. Innovative products only move as fast as their slowest piece and as such, assessing the full system architecture already in place removes barriers to implementation later down the line. This analysis may surface the need for elements of the estate to be modernised as part of the product but, through modernising alongside product innovation, businesses can build-in the ability to scale and update the product as required.

By assessing existing digital capabilities for infrastructure, data and delivery agility, firms can uncover the right implementation options right away, stripping away constraints to delivering the product on-time and effectively. From knowing where they stand with everything from the system’s interoperability to its automation capabilities, organisations can move towards flexible foundations. Once these are in place, they can create a catalyst for product innovation, often accelerating delivery roadmaps from months to weeks.

Bridging the Technology Skills Gap

Achieving competitive delivery requires agility, but those in banking and capital markets are often time poor. Experience in delivery is often also limited – even the most successful CIOs/CTOs and in house delivery teams will only use their own experience to draw on and the hunt for technology talent in the sector continues to be a struggle. It’s reported that 60 to 65 percent of engineers in a typical traditional bank fall into novice or advanced-beginner categories, with their roles focused on administrative tasks and low-value operations as opposed to writing code and undertaking value generation activities. It is important, too, to involve change professionals from the earliest stages; even the best technical teams will suffer under a poor set-up.

This makes co-value creation central to competitive success. In other words, leveraging partners, spreading risk, harnessing a wealth of knowledge from outside sources and learnings from different markets – commonly referred to as Open Innovation. What’s more, bringing in new agents not only takes the weight of deployment off the firm’s shoulders at the delivery stage, but partners can also help foster new thinking in the discovery phase.

Delivering Ongoing Banking Innovation, On Time

Innovation is a journey with multiple milestones and partners must be present – be it at ideation, design concept, prototyping, piloting, or anywhere in-between. It’s an iterative process, requiring a forward-looking mindset but demanding reactive and adaptive work patterns and specialist competencies to handle the entire product innovation cycle. Assessing partners against wider set of productivity criteria, as opposed to just pricing, will enable businesses to create the most effective and flexible roadmap for digital acceleration and ultimate value realisation.

Competitiveness relies on delivering innovative products on time – products that make a real difference. Not just once, but continuously as the market evolves. A focused, value-led approach from conception to implementation will see banking and capital markets businesses through to more sustainable digital practices. By embedding innovation as iterative and perpetual, rather than by launching ambitious, expensive, multi-year transformation initiatives, the sector will see meaningful progress from a step-by-step, ongoing approach to innovation.

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