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.
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This interview is part of our Expert Interview Series
What does innovation mean to you?
What forms could innovation take? Could it be a new business model, a venture, or can it also be a reorganization of a process?
Innovation starts at the culture level. Let me give you an example: At DKB we identify ourselves by a strong hands-on mentality. This mindset has been our heritage and helped us executing on bold ideas in the past, for example to become Germany’s first online direct bank. Today, we see that processes are of great importance to use that strength systematically. In fact, two years ago we designed a new strategy and innovation process. First, we conducted a great deal of analysis. We spoke with stakeholders and to the executive board to get the big picture. Also, we talked to customers and to employees, which we added to the analysis. We identified key topics and eventually defined a high-level strategic impact direction which we shared with various units in the bank asking: (1) how can we translate the strategic topics into the unit’s reality, (2) what pain points do we expect, (3) what are our strengths, (4) where can we still improve. Going through this process, we addressed the need for transparency through intense communication. Ultimately, we significantly changed our culture of collaboration.
If you look at the market of financial services, is there any innovation focus you see in the next 12 months? Is there any topic, where you believe, your industry should dive into?
What’s important is to identify what are the pain points of customers and what added value we can offer. An example is the lending business. On the one hand, you get a loan based on hard facts, such as credit scorings. On the other hand, it’s important to consider how easy it is to get the money into our customers’ hands and how good the user experience is during the process – in terms of quick approval, time to money, and automation. DKB recently launched a fully automated private loan, which is a great step towards user experience. But for me, the question regarding 2021 is deciding which loan products should become automated in a useful and convenient way. It’s about taking the best decisions to innovate our core business.
How do you approach the exploration of customer pain points? Do you have a process, a methodology? Also, what is the best way to determine when automation makes sense and when personal relationships are more important?
What do you think are the successful ingredients for a company?
What are the biggest hurdles that companies face when it comes to innovation?
The battle for resources and making decisions on where to allocate them. Startups do not have that problem.
They identify a single innovation focus and immerse themselves 100% in it.
Startups also seem to have much less to worry about.
Exactly. They continuously develop cool little features. As a large organization, you manage everything simultaneously while still keeping an eye on what should be developed, what do these products do, how many of our resources should we invest in these ‘smaller pieces of the business puzzle. The recognition for the need to invest in smaller innovations is something that has become apparent only recently. I think that often, expectations towards innovation are too big because we always think of innovation as something super powerful and we lose sight of smaller steps.
We agreed over ten years ago that for us innovation happens everywhere. But, we still face the challenge to innovate even on smaller initiatives because there’s always the question of where we should allocate key resources. It’s not always about budgets but also allocating know-how and competencies. Being able to prioritize is very important.
Is there any digital product that has caught your attention recently?
In Financial Services, is there any competitive product or service that made you a little envious that your organization did not launch something similar?
Do you have a video, a podcast, a book, or an article that you would recommend to peers?
Special thanks to Markus Höhne for joining us on this Interview
Innovation in Financial Services - subscribe to receive our 2021 report
We have recently surveyed 148 business leaders working in the financial services sector to find out all about the state of innovation in disruptive times.
Subscribe the receive the first copy of the report once it’s released (Q3 2021)
What will you learn about:
- Catalysts and drivers of pushing innovation initiatives in large financial institutions.
- The playgrounds that are most explored when considering innovation as a growth engine for the organization.
- Resources and tools that are most applied in financial services innovation projects.
- The biggest hurdles to jump and barriers to breakdown in achieving meaningful outcomes that the organisation is counting on.
Bonus content: The industries considered as most in danger of disruption, detailed survey results and methodology in the appendix.