Interview: Innovation in banking with Matthias Häne, Head CSX at Credit Suisse.

This interview is part of our Expert Interview Series

We have conducted a series of interviews to gather learnings and points of view from top management’s perspective on the state of innovation in banking. Those findings, among other analysis, predictions and upcoming business opportunities, are part of our “Financial Services 2021 Innovation Report” which will be released this summer.

Subscribe to get notified once it’s out.

This interview is part of our Expert Interview Series

We have conducted a series of interviews to gather learnings and points of view from top management’s perspective on the state of innovation in banking. Those findings, among other analysis, predictions and upcoming business opportunities, are part of our “Financial Services 2021 Innovation Report” which will be released this summer.

Subscribe to get notified once it’s out.

What does innovation mean for you?

Innovation to me means being creative, developing new things, pushing forward and evolving. Being innovative seems like a natural basic need for humans in general. Humans have it in their blood to create, to experiment and to find new ways of doing things. In the end, that’s what has brought us this far as a civilization.

And do you think only humans have it in their blood or companies as well? Is it the same or is there a difference?

Innovation is at the centre of every business. But as soon as an organization and processes are built around a functioning business model it becomes very hard to change anything. All effort is then primarily directed at doing the same thing better, faster or cheaper. But as time goes on and the world changes, companies need to adapt fundamentally in order to survive. In some companies, there’s a multitude of limitations that prevent employees from being really innovative. But there are, fortunately, also more and more companies realizing that in a complex world their employees’ creativity is essential to be successful on the market. 

What is the last innovation in which you have been involved?

CSX, which is the new digital product suite in our bank. The basic idea was to bring together the best of what neo banks, the digital challengers in the market bring to the table and the best of what an incumbent such as Credit Suisse has to offer. Client centricity, ease of use and the great design of fintech combined with the expertise, experience and the broad product shelf of a universal bank. CSX is not just an app, it’s a new brand, a new business model, a lab for new ways of working and thinking and therefore at the core of the digital transformation of Credit Suisse.

Are there new customer pain points or new customer needs emerging in 2021?

The basic client needs remain the same. Clients expect products and services that really give them value and they want to interact in a way that suits their habits. These habits have strongly shifted towards digital channels. The pandemic has given the general trend to digital adoption an additional boost. The financial industry was rather late at starting its digital transformation but now things are happening quickly.

How are you identifying emerging opportunities or customer pain points worth exploring?

It’s essential that companies take a clear outside-in perspective and directly involve clients into product development. The journey always starts with the client. Based on effective listening and specific questioning, client needs and pain points are identified. In an iterative test-and-learn approach a solution gets developed that offers the best product-market fit. Prototyping and client feedback are absolutely fundamental in this process. With CSX we involved hundreds of clients in the product development process and that really helped to create better value for our clients.

Do you use a specific methodology for customer co-creation?

The methodology that is used within the bank is based on Design Thinking and the Lean Start-up approach. This means that the ideation process starts with the client and we aim at first testing the market with a basic product version (most valuable product, MVP) that is launched within a feasible time frame. We have a dedicated user experience team that is in the lead of the co-creation process. And unlike my experience in other companies, this team and the findings and insights it provides are heard and have real impact.

Which do you think are these important ingredients to make innovation work as a company?

I have mentioned the methodological framework. But that alone is not sufficient. The key to innovation is mindset and culture. These need to be based on client centricity, flexibility, openness and a true entrepreneurial spirit. I’m quite surprised of how far Credit Suisse has already come in that process. Of course, you still get confronted with the silos and the occasional narrow-minded thinking. But the fact, that in these cases it already feels out of place, shows that the organization as a whole is on the right track.

What do you think are the biggest hurdles that companies face when it comes to innovation?

As mentioned, it is quite often the prevailing inside-out perspective and the lack of client centricity that hinders innovation. From my experience it seems that the bigger the company the stronger the tendency for self-absorption. Innovation comes from problem solving. And if I do not fulfil my clients’ needs, the market will not be interested in my solutions. In order to know these needs, I have to truly understand my clients. I have recently learned the term client obsession. And it is true, as long as you are obsessed with your clients you will always stay relevant as a company. 

Is there any digital product that did catch your attention recently?

I just bought myself a MASCHINE MK3. It’s a sampling machine to make music. One of the main features is that it offers 16 tactile buttons that can get programmed with different beats. And it’s really easy to use because you can simulate a drum set just by pushing your fingers on the buttons. It looks a bit like a children’s toy but that is actually the beauty of the concept. It is so simple and it is perfectly bringing together the digital and the haptic world.

Which company in the financial service sector do you consider as an innovation benchmark?

I am particularly impressed by the story of Stripe. When they started in 2010 they realized that accepting payments was a main technical hurdle for each aspiring e-commerce business. Their vision was to make this process as easy as possible and they fully focused on developers as target group. They quickly got traction in the market and continuously kept innovating by listening and learning from their customers. This constant strive for innovation has now gained them a record valuation of almost a $100 billion.

Additionally, I’d have to mention the neobanks that have penetrated the Swiss market in the last couple of years. They have successfully shown clients that banking does not have to necessarily be as complicated. They are gaining substantial market share in Switzerland – partly without doing any marketing – and they are still the benchmark when it comes to ease of use and feature scope within digital banking.

Is there a company that comes to your mind, where you think ‘Damn, they are constantly pushing innovations?

Spotify. Just the way they reinvented the whole music industry is fascinating. They kept constantly pushing the product and successfully expanded to new markets. Notably, they did not do that out of Silicon Valley but are based in Stockholm. It’s a nice example that shows that also European companies can be globally successful in the digital space.

Is there any book or article or podcast or video on innovation that you would recommend to a new colleague?

“The Age of Agile” by Stephen Denning. What I like about the book is that it shows how the transformation to an agile company is done on a big scale also for incumbent companies.

Special thanks to Matthias Häne for his insights on this Interview
This interview is part of our Expert Interview Series

We have conducted a series of interviews to gather learnings and points of view from top management’s perspective on the state of innovation in banking. Those findings, among other analysis, predictions and upcoming business opportunities, are part of our “Financial Services 2021 Innovation Report” which will be released this summer.

Subscribe to get notified once it’s out.

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