Some of the most important elements of successful corporate innovation are: culture shift, a dedicated innovation entity that is supported by executive leadership and willingness to test new ideas on behalf/in partnership with the customer.
These concepts have slowly been gaining traction in the banking industry as businesses are discovering a lack of innovation is dangerous in an age when consumer demands are as high as they have ever been.
One particular bank that has gone all in on this is Citibank. The company launched Citi Fintech in 2015, a separate piece of the organization that has its own leader and runs parallel to the core business, all in the name of innovating on behalf of its customers.
Seeking out problems in your industry and solving problems with original tools and resources for the benefit of customers is key to any innovation effort. A large company looking to transform into an innovative company must have buy-in and support from leadership even if it is considered a separate entity. That entity also must have its own leader, and for Citi Fintech that leader is Yolande Piazza, the CEO of Citi Fintech, which employs 400 people and has global reach.
Piazza stressed how important a culture shift was to get Citi Fintech up and running. Citi Fintech knew it needed to take the basics of banking (deposits and investments) and question how it could “bring it together in a way that’s simple and easy to use.” To do this, as Piazza stated, it created “the right balance of really strong talent that know how to operate within the bank, but then as we hired in, we actually deliberately didn’t want people that had banking experience. What we wanted was people who had a passion to change people’s experience with money.”
“It’s so personal so if you come in with a true desire to create a different experience and solve some of the problems that you experience, your friends or family members experience, you start to get just a different culture naturally.” – Yolande Piazza
Part of the reason Citi developed a fintech division is that it takes pride in its agile operating model. Today’s businesses must evolve at faster rates. No approach to at least incremental improvement is a dangerous one. By creating an environment of continuous transformation, like Citi is involved in, and not relying entirely on the “old way,” companies can create a more sustainable model for the future.
A willingness to test new ideas and products, and be OK with failing in those efforts is part of that. Citi scans thousands of startups each year, for example, and has taken an equity position in several. Citi Fintech also is currently running something called a Canvas platform, which invites Citi customers to test products and services. If those products don’t resonate then they are shut down. If the testers like the products then they are built out.
“a beta-testing community that’s just one example of this shift. It calls upon customers to join the conversation and take a hands-on approach to the development of features, experiences, and products tailored to their lifestyle — for both work and play. For example, a couple of the projects currently in the works via the platform include a line of credit that will give freelance workers faster access to working capital, as well as a tool that pairs daily physical activity with spending habits.”
With so many experiments, failure is inevitable, and something that shouldn’t be frightening, but welcomed. As Piazza explained:
“We believe in celebrating failures in Citi Fintech, we actually give out a bottle of Prosecco if people come in and own their failures on a weekly basis. All they have to do is say what did they learn from it so that we get people comfortable stepping outside of the norm.”
In today’s digital world, large companies must be willing to disrupt their own business models. This continues to happen across the banking industry and it takes a certain amount of creativeness and willingness to test limits for a company to sustain itself in the future.