Innovation in a Pandemic: Financial Services
In my previous article, we discussed some of the principles applied by small and medium businesses to innovate and pivot their businesses during the pandemic. Today, we will take a look at the financial industry, specifically large corporations, and understand how they can leverage those innovation principles.
It is important to note that large financial institutions have monthly requirements (e.g. monthly close process, regulatory related requirements and reports, etc.) which need to be completed accurately and delivered on time, even in a pandemic and lockdown situation. As such, during a crisis some innovative initiatives and change projects have to be paused while the company ensures teams have the necessary technology equipment, correct user access and ongoing support to perform and deliver key BAU and regulatory activities.
It can be argued that large financial institutions should also prioritize innovation and adaptability to new markets during the pandemic. Not innovating and supporting clients may lead to lower retention of existing customers (as individuals switch to digital banks and digital propositions) and lost opportunity of new markets/customers, most notably freelancers and small business owners in this climate.
In order to ensure innovation in such large organisations while balancing BAU activities, the following principles currently being leveraged by smaller organisations should be applied:
Principle 1 — Identify new gaps in the market
Large corporations should maintain an in-house innovation team fully separated from BAU teams with independent reporting lines, processes and budgets for faster decision making.
The main goal of the innovation team should be to test new ideas and quickly roll out Minimum Viable Products (MVPs), obtaining customer feedback and iterating accordingly.
Principle 2 — Innovate and Pivot
Two main routes used by small businesses can be directly leveraged by large financial institutions:
Digitisation of old business
During lockdown it is essential that financial institutions nail the digital experience, from onboarding new customers, to opening of join accounts and access to loans.
Website and apps will be the first point of contact for customers and should provide a slick and easy experience to customers. Limiting the number of people that need to call customer services and freeing up the lines for older and non-technology savvy individuals.
Additionally, innovative customer support should be sought to engage the millennial audience, e.g. online customer support on demand via chats in their apps and other support labs which can be MVPs tested within a small community before rolling out further.
Partnerships
Large Financial institutions should leverage the power of partnering with fintechs, other large corporations and regulators to support customers affected by the crisis.
Although the UK government have provided a rescue buoy, through credits and loans to small businesses and self-employed workers, there is a need to support execution and create a quick process to collect historic data. Small fintechs and medium size companies will have “out of the box” solutions that can support the execution while large corporations will have the customer scalability.
Principle 3 — Leverage Social Media and Community channels
One of the main differences between small and medium businesses vs large corporations is the leverage of social media and community channels.
Now that a big percentage of the population is at home and on their phones, it is the right time to make the shift to digital communication and update the customers on ongoing initiatives. Some platforms to consider are:
Podcasts
Twitter, LinkedIn
Charities, Community media
Own App / Website (include a community blog)
Note that bigger corporations will have strict rules to what is disclosed online to preserve confidential and customer information.
Principles 4 and 5 — Implement with speed and have the courage to fail
Two of the most important principles in Innovation are sometimes difficult to implement in large corporations due to regulatory requirements, the web of old systems half interconnected and confidentially concerns.
Large corporations should ensure innovation and new products are launched with speed and are rapidly iterated on (post launch) based on customer feedback.
Additionally, institutions should stop initiatives that are not supporting customer experience, learn from the experience and move on to new propositions.
In order to shield the wider customer base, new propositions and innovations should be launched in a “lab” environment for a smaller community that are technology savvy and willing to test new products and provide honest feedback.
Please note that although the lens applied to this article is that of innovation in a pandemic, all these principles should be applied on an ongoing basis. Innovation should be lived on a daily basis and not only in a crisis environment.
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This is a personal blog. Any views or opinions represented in this blog are personal and belong solely to the blog owner and do not represent those of people, institutions or organisations that the owner may or may not be associated with in professional or personal capacity, unless explicitly stated.